Claire opened Claire's Beauty Parlor in her home.She solicited funds to begin the business from Jack,who was led to believe that the business was incorporated.Claire had,in fact,never filed the papers.One day,Claire fell asleep while giving a customer a permanent and the solution caused her customer severe burns.The customer sued the Beauty Parlor for $500,000,an amount enormously in excess of the business assets.Under the RMBCA,what would be the result?

Question

Quizplus · Accepted Answer

Since the business was not actually incorporated and Jack was led to believe it was, only Claire, who was directly responsible for the incident and knew the business was not incorporated, would be personally liable. Jack, misled about the incorporation status, would not be held personally liable under the RMBCA (Revised Model Business Corporation Act) principles.

Claire Opened Claire's Beauty Parlor in Her Home