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1 The court could pierce the corporate veil to ensure that Sharp is solely liable for any damages. The evidence presented in this case is sufficient to support the decision by the court to pierce the corporate veil. In this case, the factor that would lead the court to pierce the corporate veil is that individual and corporate interests were commingled to the extent that this corporation had no separate identity (Miller 799). The fact that Sharp assumed the financial responsibilities of the corporation waived corporate rental payments and used corporate funds to pay employees and other expenses could result in the court piercing the corporate veil. Therefore, Sharp should be held personally liable for any damages.
2 Yes, the court could decide that Sharp was personally liable since the articles of incorporation failed to describe the purpose of the corporation or the structure of management. Corporations do not possess the automatic right to conduct their activities in other states except their state of incorporation (Miller, 788). The corporation must first get the certificate of authority allowing it to run business in a particular state.
3 Under criminal law, corporations might be held liable for any offenses committed by their employees (Jezierski). Although it is not possible to imprison corporations, they can be fined. Moreover, their agents can be fined for any criminal acts. Sharp violated the corporation’s bylaws. It can be argued that the extended credit enticed the deceased girl to regular patrons, or she was allowed into the club because of Sharps’ greed since he was not strict enough.
4 Chickasaw club is a domestic corporation because one of the requirements of an organization to have S corporation status is that the corporation should be a domestic corporation (Miller 768). Therefore, Chickasaw is a corporation incorporated by the state of Georgia.
Debate
I hold that the sole shareholder of an S corporation should not have the capacity to evade liability for torts by the employees. Since corporations can become liable for employee misconduct, sole shareholders should be careful about the people they hire and the way they monitor employees (Miller 787). Companies use special software to predict the behavior of employees and their conduct. Generally, tracking employees while they are working is legal. Therefore, in the case of Sharp, he was solely responsible for ensuring that employees’ conduct was monitored and making sure that the systems for checking patron IDs were tight. Therefore, employees should not be held liable in this case. It is only the sole shareholder who should be held responsible in this situation.
Work Cited
Jezierski, Crystal. “Corporate Liability in United States – Global Compliance News.” Global Compliance News, 2016, globalcompliancenews.com/white-collar-crime/corporate-liability-united-states/. Accessed on 14 May 2021.