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April 24, 2014

Homework Help: business law

Posted by Bryan on Thursday, February 21, 2008 at 4:32pm.

CASE PROBLEM: Three brothers inherited a small paper-supply business from their father, who had operated the business as a sole proprietorship. The brothers decided to incorporate under the name Miwa Corp. and retained an attorney to draw up the necessary documents. The attorney drew up the papers and had the brothers sign them but neglected to send the application for a corporate charter to the secretary of state's office. The brothers assumed that all necessary legal work had been taken care of, and they proceeded to do business as Miwa Corp. One day, a Miwa Corp. employee was delivering a carton of paper supplies to one of Miwa's customers. On the way to the customer's office, the employee negligently ran a red light and caused a car accident. Harman, the driver of the other vehicle, was injured as a result and sued Miwa Corp. for damages. When Harman learned that no state charter had ever been issued to Miwa Corp., he sued each of the brothers personally for damages. Can the brothers avoid personal liability for the tort of their employee? Explain.

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