LEGAL ENVIRONMENT OF BUSINESS

A. In sole proprietorship under small businesses, the proprietor receives all the profits. The
owner pays only personal tax. Owner is flexible to make their business decisions. The business
will collapse when the owner dies. There is limited capital to expand. The personal assets of the
owner are at risk

With limited liability business forms, members have limited liability. Profits are shared
among co-owners. There are no limitations on the number of members that form the business.
With its disadvantages, the statutes of the business are not uniform. It is harder to transfer
ownership. It can easily cease to exist.

With a corporation, it is easier to transfer ownership. Owners have limited personal

liability. Owners can easily raise funds for the expansion of the business. Corporations are
disadvantaged since there is a prolonged ownership acquisition process. Most corporations deal
with the problem of double taxation. It is expensive to form and operate a corporation.

B. Product liability is the area of law where product manufacturers, distributors, and sellers
are held accountable for the product's harm to the consumer (Cross and Miller 135). An example
of product liability is the case where William Greenman was injured when his Shopsmith
combination power tool threw off a piece of wood that struck him in the head. He sued the
manufacturer, claiming that he had followed the manufacturer's instructions and that the product
must be defective (Cross and Miller 138)..

 Hire an attorney. The first step is to search for the advice of a licensed attorney.
 File a complaint or pleading. Pleading informs both parties of each other's claims,
projects the facts, and points out the disputed questions involved in the case..
 Discovery. Discovery is having access to documents, records, and witnesses as
evidence.
 Trial. Many procedures and rules are governing the trial phase where the case is
being presided over.
 Verdict. A verdict is issued in favor of one party when the jury reaches a decision.

D. Duty-based ethics. This focuses on the duties of the corporation. It is based on the
standards of behaviors traditionally derived from religious authorities, philosophical reasoning,
or revealed truth.

Outcome-based ethics. This focuses on the consequences of action only not considering
the nature of the action, moral, or beliefs. It basically looks at the effect of a decision made in an
attempt to minimize harm and maximize benefit.
REFERENCE

Cross, Miller. "A legal environment business text and cases". Eleventh edition. Cengage,
2021, p 49-51, 135, 138.