The Legal Aspects of Entrepreneurship

Topics: Business, Management, Property Pages: 19 (6474 words) Published: October 27, 2012

GM 520 – Keller Graduate School of Business
Submitted and Copyrighted by: Carla J. Miller, Summer 2009

I. Introduction
Running a successful business can be very difficult without the right tools. As more and more people start or consider starting their own business, it is important that they understand the core steps that are required to launch successful ventures. These steps include spotting, assessing, selecting and executing opportunities presented.1 Business entrepreneurs must also have a thorough knowledge of the laws and statutes that pertain to the ownership and operation of their business, in order to maintain business operations in the long-term. Without this knowledge they are subject to fines, litigation, lawsuits and a host of other problems concerning employees, clients, vendors and other associates that can destroy their daily operations very quickly. Are online jobs the next big thing? As the U.S. economy continues to free-fall, millions of Americans are finding themselves without jobs, sufficient retirement or paychecks coming in. In March 2009 alone, the number of unemployed people increased by 694,000 to 13.2 million in the United States. Throughout history those on the cutting edge have adapted and prospered by knowing how to adapt to current economic climates, and this trend may once again be taking place on the internet.2 However, with the lack of precedents in the courts concerning some aspects of “Cyber-Business”, today’s entrepreneur must have additional knowledge in this area to protect themselves from unnecessary litigation. This paper will, hopefully, be a useful tool to budding entrepreneurs and help them make the necessary decisions to have a prosperous and successful business operation. Of course, a formal education would be the greatest tool for any entrepreneur to have to assure profitability and future business success. 1. 2.

A. What are business ethics and why should they matter to your new business? The purpose of having laws is to provide and identify remedies to maintain order in the society. Ethics consists of those unwritten rules we have developed for our interactions with each other. These unwritten rules govern us when we share resources or honor contracts. The Constitution of the United States, and the constitutions of countries around the world, define the laws and statutes that regulate businesses in the society. However, there are always loopholes and gaps in the laws that unscrupulous individuals will seek to use to their benefit or to harm others. Business ethics takes the customs and everyday practices of a society and leaves it up the morals, mores, principals of fairness and justices practiced by the owners and associates of business to act in a manner that is ethical or “right”. 3 B. What is a Business Tort and can I get whipped cream with that? When businesses or individuals do not follow ethical practices, usually a Business Tort is created (and no, you cannot get whipped cream, but you might get whipped in court or slapped with a huge lawsuit.) A tort is a private wrong. When a tort is committed, the party who was injured in entitled to collect compensation for damages from the wrongdoer for the private wrong. The three types of tort liability include intentional torts, negligence, and strict liability. Intentional torts are those that involve deliberate actions. Careless conduct or actions committed without thinking about the consequences of your actions, is the tort of negligence. Product liability is a form of strict liability, where a company can be held liable for injuries when a customer (or other client) has misused its product or service, because even the failure to provide adequate warnings on a product’s usage can result in strict liability. Businesses have a...
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