Corporate Shield Only Extends So Far

The notion that a corporate officer cannot hide behind their corporate shield when they have themselves committed a tort, was recently reaffirmed in Karasavas v. Gargano, 87 Mass. App. Ct. 1125, 31 N.E.3d 1191 (2015).

In this case, the Court reasoned that “because ‘[a] corporation is a creature of the law,’ which can only act through its agents, ‘a corporate officer cannot evade personal liability for a tort that he himself committed.’

Plainly, a corporation does not protect its officers / owners / shareholders from personal liability if that officer / owner / shareholder commits a tort that causes damages to another. Although not necessarily at issue in this case, the same applies to limited liability companies a well – a fact few people realize. This presents significant legal issues for single officer / shareholder corporations and single manager / member limited liability companies (“LLCs”).

The Business Attorneys at The Jacobs Law LLC advise clients of the potential personal liability that can be imposed on owners, shareholders, officers, managers and/or members of various registered entities and can assist and advise in methods of risk mitigation.

If you are looking to setup a business in Massachusetts, the Boston Business Lawyers at The Jacobs Law LLC can help! Contact us today at BUSINESS@THEJACOBSLAW.COM or 800-652-4783 or complete the form below and we will contact you as soon as possible.

YOUR ATTORNEYS FOR BUSINESS {STARTUPS, REGISTRATION, FORMATION}