Mini Case-Study ANSWER NO 1 An agency relationship emerges when at least one person called principal hires another individual or association called an agent to perform and provide the services and then offers a primary leadership role of decision making to that appointed agent. A potential agency issue emerges at the point when the director of the firm possesses less than 100 percent of the company’s common stock, or the firm acquires. When you’re the only employee, and your cash puts resources in the business, you claim the 100 percent of the firm. As a solitary owner, you will work with the company to augment your welfare, with welfare estimated as expanded individual and personal wealth, more leisure or perquisites.
