CASE PROBLEHS-SHORT ESSAY ANSWERS: 1. A, B, and C plan to go into business toget

Question

CASE PROBLEHS-SHORT ESSAY ANSWERS: 1. A, B, and C plan to go into business together. A and B have limited assets. Cs very weal thy. Would it be advantageous for C to st upon a corporaton? Explain. 2. A bartender of an incorporated tavern egal ly sells liquor to a minor. The act is a crime under the state la. If the bartender is a non-owner, can the tavern be criminally prose- cuted for the 1 1egl sale? Explain. 3. A promoter contracts with B to engage B to manage tion upon its incorporation The directors of ABC Corporation refuse to accept the terms of the contract, and B refuses to be employed by ABC Corporation except on the terms of the contract with the promoter. What are B's rights? Explain.

Explanation / Answer

1. Yes. In addition to getting advantage of protection from liability and ability to attarct investments, C can exercise control on the execution power in proportion of his shares.

2. Yes. a corporation is liable for the conduct of its employees and can be prosecuted for the offence of employee.

3. The promoter is liable for the breach of contract with B, if there is a consideration between them. If there is no consideration, there is no valid contract. If the promoter has received any favour , either in kind or in cash, he is liable to B.

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