Joe and Josephine have started a plumbing business.The business is incorporated,but they have not invested any money in the business,which has only minimal assets.One day Josephine negligently damages a main pipe in a customer's home,causing the basement to flood and resulting in $20,000 in damages.The homeowner's only remedy is to sue the corporation,but because the corporation has no funds and only minimal assets,the homeowner will bear the loss.Joe and Josephine are personally shielded from liability due to the corporate protections the business entity affords them.

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The Answer of Joe and Josephine have started a plumbing business.The business is incorporated,but they have not invested any money in the business,which has only minimal assets.One day Josephine negligently damages a main pipe in a customer's home,causing the basement to flood and resulting in $20,000 in damages.The homeowner's only remedy is to sue the corporation,but because the corporation has no funds and only minimal assets,the homeowner will bear the loss.Joe and Josephine are personally shielded from liability due to the corporate protections the business entity affords them.

Joe and Josephine Have Started a Plumbing Business