Agency relationship refers to a consensual relationship between two parties, where one person or entity authorizes the other to act on his, her or its behalf. Agency relationships exist as mutual agreements between individuals, small firms and large organizations. They establish a system of control and conduct where one party gives up control to the other, letting the second party make decisions and take actions.Know More
In an agency relationship, one party acts as the agent while the other assumes position of principal. The agent provides and performs services on behalf of the principal, with the principal's full knowledge and authorization. The agency and principal engage in a binding partnership, benefiting from each other's engagement in the relationship. Agency relationships function as fiduciary partnerships, giving the agency responsibility for acting in manners benefiting the principal.
Agents and principals may initiate agency relationships in several ways. These relationships primarily arise through contractual agreements. These agreements exist as written and legally binding documents outlining and enforcing, through signatures of all parties, terms of the contract. Ratification, which uses written or verbal verification, confirms the intent of principals for acting on behalf of agents. Relationships form through estoppel as well, which involves the discretion of a third party, and by operation of law, where courts and judges administer control.Learn more about Business Resources
Toll manufacturing occurs when one company processes goods or raw materials on behalf of another company through an agreement, according to BusinessDictionary. Toll manufacturing is also known as toll processing.Full Answer >
A matrix organization is a business or entity where project managers are arranged in a horizontal hierarchy and department heads are arranged vertically, notes BusinessDictionary.com. This structure describes the relationships between employees and determines seniority.Full Answer >
PCI compliance refers to compliance with the requirements of the Payment Card Industry Data Security Standard by any business entity that has a Merchant ID and processes credit cards from the major brands. PCI compliance standards are enforced by the payment brands, not the PCI council, and they apply to all organizations that handle cardholder data. A merchant typically deals with his merchant bank when implementing compliance requirements.Full Answer >
The "going concern" principle refers to the treatment of a business entity by auditors, assuming the business will remain operational for the foreseeable future. The auditors use this principle to defer the recognition of expenses to a later date.Full Answer >