Mark complied with all formation requirements for incorporating his taxicab business. He is the sole shareholder in the corporation. The corporation owns two automobiles that Mark frequently uses for his own personal use. In addition, he sometimes
deposits the money he takes in during the day into his personal checking account. One day, an employee of the company, while driving one of the company vehicles, accidentally hits a pedestrian in a crosswalk. The pedestrian sues both Mark and the taxi company for $100,000 . The corporate assets are only $32,000 . Is the corporation liable for the acts of its employee? Will Mark be personally liable under the facts? Explain.
Since the formalities of creating a corporation have been strictly complied with, there is no question that this is a de jure corporation. However, the corporate veil may be pierced and limited liability disregarded where the business has not been conducted in a corporate manner. Here, Mark is acting as though the cars and income are for his own personal use, and the courts are likely to require that he personally pay the injured party. Also, the corporation bears liability under respondeat superior for Mark's tort because it was committed in the course of his employment.
You might also like to view...
The initial step in the recording process is posting
a. True b. False Indicate whether the statement is true or false
The general duties clause is an_______.
A. employer right and employee responsibility B. employer and employee responsibility C. employee right and employer responsibility D. employer and employee right E. illegal concerted activity
A major weakness of a matrix organizational structure for project management occurs when:
A) The environment is dynamic. B) Resources are scarce and shared between functional responsibilities and the competing project. C) The number of human resource coordination meetings is considered. D) One considers the dual importance of project management and functional efficiency.
The Hope Scholarship Credit
A) is available for the first two-years of postsecondary education. B) may be taken along with the Lifetime Earning Credit in any given year. C) is available to all, regardless of income. D) may be claimed for only one student on a single family's return.