Question

7. The stockholders of Ace Construction, Inc. are Barry and Larry. They appoint Tara to be the president and sole director of the corporation and to run it. Tara enteres into a contract with Filmore Flooring signing as “Tara, President of Ace Construction, Inc.” Who is responsible for the debt? 8. In the above example, who is the agent of the corporation and authorized to bind the corporation to debts?

Answer 1

7. Both Barry and Larry are responsible for the debt because they both are the owners of the company. They can have different people working in their company in different capacities but that doesn’t mean they have to bear the losses of the company because they enjoy the profit on their own. They can only fire Tara for her poor decision making.

8. Tara is responsible as the poor decision making and she bound the corporation to debts. Tara can be brought to legal procedures if Larry and Harry think that Tara has done some fraud thus causing the loss.