Legal Question in Business Law in Pennsylvania


If an roofing business becomes inc. and they get sued what happens? especially if business doesnt own anything but tools and a junker work van. If not Inc. can sometouch the owners personal bank accounts if they wanted to?

Asked on 12/02/03, 4:58 pm

1 Answer from Attorneys

Gerry Elman Elman Technology Law, P.C.

Re: Sued

Well, that depends what the suit is all about and whether the owner was personally involved in the subject of the suit.

Let's consider what would happen if an employee is driving the vehicle and injures a pedestrian. The pedestrian would be entitled to sue both the driver (employee) and the employer, which here is a corporation. If the insurance proceeds aren't sufficient to pay the judgment, then the assets of the corporation could potentially be attached. If an attempt is made to "pierce the corporate veil" and attach the assets of the "owner," who presumably is an officer and shareholder, it is unlikely to succeed.

Now let's consider what happens when after a roofing job, the roof leaks so badly that it damages the building. And the "owner" in this case goes out on jobs and does the work. The fact of his personal participation is likely to make him personally liable anyway, if he were sued personally for negligence, and it is more likely that a judgment against the corporation could also be enforced against the "owner's" personal assets by piercing the corporate veil. It makes sense to buy insurance against that eventuality rather than to assume that having a "corporate" form of business would protect the "owner" from liability for his own negligence.

Read more
Answered on 12/03/03, 8:13 pm

Related Questions & Answers

More Business Law questions and answers in Pennsylvania