BUSS213 – Business Law & Ethics

Name: Marshall Walker.

Week 2: Reflection

Question 1:
The main point I found most important about business entities is the different types of liability that
each structure exposes its owners to. This is important to me because I am considering starting my
own business, and I want to make sure that I choose the right structure to protect my personal
assets.
For example, a sole proprietorship is the simplest form of business entity, but it also exposes the
owner to unlimited liability. This means that if the business is sued, the owner's personal assets,
such as their home and car, could be taken to satisfy the debt.
A limited liability company (LLC) offers more protection to its owners because the owners' liability
is limited to the amount of their investment in the business. This makes an LLC a good choice for
businesses that want to limit their liability.
Question 2:
A fiduciary relationship is a relationship of trust and confidence between two parties. In the context
of business, a fiduciary relationship exists between a business and its stakeholders. Stakeholders
include shareholders, creditors, employees, and customers.
The business owes a fiduciary duty to its stakeholders to act in their best interests. This means that
the business must be honest and transparent with its stakeholders, and it must not make decisions
that would harm their interests.
As a consumer, I benefit from the fiduciary relationship between businesses and their stakeholders.
This is because I can trust that businesses will act in my best interests when making decisions about
their products and services. For example, I can trust that a business will not sell me a product that is
defective or dangerous.