Florida International University Business Law Discussion Response

Respond to others’ comments or questions

Running head: LAW
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S Corporations
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S Corporations
An S corporation is an IRS tax framework business entity that is largely apart and
separates from the people who own it as a shareholder, thus limiting financial liability that is
encountered solely (Miller, 2021). Nevertheless, the limited liability does not offer immunity
from the litigation of a case such as the Chickasaw Club case since a tort is committed by the
Club’s employees regardless of it being free from taxes as a separate entity making the
shareholder liable for his taxes. Due to the fact that William Sharp is the principal owner and
shareholder of Chickasaw Club, he should therefore take the liability for the torts committed by
his employees at Chickasaw Club. In the court of law, the theory of lifting the corporate veil will
be used in order to make Sharp liable for the negligence of letting a drunk underage overdrink
and drive while intoxicated. Therefore, the court will make an exception of the limited liability
on Sharp to compensate for the Pursley’s stepfather’s damages which is the death of her
stepdaughter.
Failure to describe the corporation’s purpose for Chikasaw’s management structure will
lead to the perception of ignorance since it should be indicated under the state laws. Therefore,
Sharp will be held liable for the criminal negligence of his employees, but because he is the
owner of Chickasaw Club but will not be held responsible for Dancause. Credit extension to
regular patrons of Chickasaw is a customer care move that should not need to be included in the
articles of incorporation. This is because it is a usual activity of entities such as Chickasaw in
order to maintain a loyal clientele which with no doubt gives the corporation that mandate that is
dependent on the ownership structure (Miller, 2021). The court would classify Chickasaw Club
as a domestic entity on the basis that it was established and operated in Georgia. In addition, the
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Club’s ownership falls under Sharp, meaning that it could also be termed as a private corporation
since it is a closed S corporation.
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Reference
Miller, R. L. (2021). Business Law Today, Standard: Text & Summarized Cases. Cengage
Learning.