Cengage Learning. Chapter 33: Corporate Formation and Financing.
Cengage Learning. Chapter 33: Corporate Formation and Financing.
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Based on critical and analytical approach, my argument holds that a sole shareholder of an S corporation should avoid the liability for torts of their employees. The legal framework about an S corporation is categorical that it protects the sole shareholder based on the existing provisions like the corporate veil doctrine. The sole trader follows laid down state and federal regulations in operations of his or her business enterprise and cannot be liable when the business as a legal entity commits a violation that may necessitate further investigations.
The present criminal law mandates that a corporation should be held liable for the criminal actions and events of its employees and agents. While corporations may not be sued, they can pay fines and penalties (Miller, 2022). Sole shareholders in the case of an S corporation may be sued as a director if involved in actions that lead to commingling of personal interest and business operations as demonstrated in the case of William Sharp and the Chickasaw club.
The last aspect is that a corporation can be held liable for torts committed by those acting on its behalf like employees and officers while in the scope and course of their official duties and responsibilities (Miller, 2022). However, such can only happen when the court removes the corporate veil and institutes criminal proceedings for those involved in such acts that breach the requirements of the corporation, particularly articles of association.
Reference
Miller, R L. (2022). Business Law Today: The Essentials; Texts and Summarized Cases.
Cengage Learning. Chapter 33: Corporate Formation and Financing.
Requirements: 1 paragraph
PHD Business Law
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