Claire has been selling her famous cookies on her own to local bakeries.Her cookies are so popular that she needs to hire someone as an employee to help with the packaging and delivery.Claire has taken no formal steps regarding the form of business organization.Which of the following is true about Claire's situation?

Question

Quizplus · Accepted Answer

Claire has not taken any formal steps to organize her business, which means that her business is likely a sole proprietorship. As a sole proprietor, Claire is personally liable for any torts committed by her employee during the course of employment. This means that she will be vicariously liable for any damages resulting from the employee's actions. The other options are not correct because Claire can legally hire an employee without incorporating, the employee will not be a partner in the business, the employee will not be liable for Claire's torts, and Claire's liability is not limited to the value of the cookie business as a sole proprietor.

Claire Has Been Selling Her Famous Cookies on Her Own