Elaine and Roy are registered nurses. They want to start a home health agency, taking referrals from physicians and providing health care to homebound patients. They plan to be in business for 10 years.
Identify the reasons why incorporation is an effective idea for their business, the steps they must take to incorporate their business, and the steps they must take to dissolve the corporation once the 10 years has passed.
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, and predict the outcome of the suit against Tom.
Michael and Dwight decide to start up an online novelty mug store called "World's Best Mugs." Michael plans to be the boss of the company and will handle the inventory and distribution in his condo. Dwight is not planning on providing any of the funding for the store, but will be the lead salesman. Michael has contracted with Ryan to design mugs for the store. Unfortunately, Ryan is not very good at his job and spends most of his design time listening to his iPod he got for Christmas.