Tom Inherited His Fathers Essay

264 Words2 Pages
Tom inherited his father’s landscaping business, and incorporated the business after he read an article in Lawn News, advising landscaping businesses to incorporate. Tom has been sued by a customer, whose prize rose bushes were accidentally damaged by a landscaper. Tom called his attorney, Hector, to represent him in the lawsuit. When Hector asked for the corporate minutes, Tom said, “What corporate minutes?” Hector advised Tom that his personal assets could be taken if he lost the suit, but Tom said, “No, don’t worry! I’m a corporation; I have no personal liability!” Is Tom correct? Identify and discuss the legal principle that would be applied by a court to resolve this issue. Based on your research, predict the outcome of the lawsuit against Tom. By understanding the definition of incorporated, we learn if Tom in this lawsuit can loss everything. According the legal dictionary an incorporated company is formed with the approval from the state in which the corporation is being formed. This corporation is an artificial person, that is someone who does not exist. The organization can sue and be sued, that is unless it is non-profit. A corporation can sell shares of stock if needed. An corporations liability is limited to its assects, so the owner or the shareholders are protected from personal claims unless they commit fraud. Now because Tom did not follow the law of an incorporation by having corporate minutes his company has commited fraud. The court will see a case of fraud and In my opinion will lose the lawsuit.

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