Professional Corporations. The defendant, Cohen, Stracher & ...

[berenicecastro]

Professional Corporations. The defendant, Cohen, Stracher & Bloom, P.C., a law firm organized as a professional corporation under New York law, entered into an agreement with the plaintiff, We're Associates Co, for the lease of office space located in Lake Success, New York. The lease was signed for the We're Associates by one of the partners of the plaintiff's company and for the defendant professional corporation by Paul J. Bloom, as vice president. Bloom and the other two defendants, Cohen and Stracher, were the sole officers, directors, and shareholders of the professional corporation. The corporation became delinquent in paying its rent, and the plaintiff brought an action to recover rents and other charges of approximately 9,000 alleged to be due and owing under the lease. The complaint was filed against the professional corporation and each individual shareholder of the corporation. The individual shareholders moved to dismiss the action against them individually. Will the court grant their motion? Discuss.

Question 2

In Yin v. J's Fashion Accessories, the court found that Yim was an agent for his company, Hosung, so was not liable for debts owed by Hosung, the principal.
 a. True
  b. False
  Indicate whether the statement is true or false

[anyusername12131]

Answer to Question 1

Professional corporations
Yes. The court held that the shareholders, as members of a professional corporation, could not be held individually liable for past due rent and granted their motion to dismiss the action against them individually. The court explained that a review of the applicable state law disclosed the legislature's clear intent to be that except for liability arising from the rendition of professional services, the members of professional corporations are to enjoy the same benefits of limited liability afforded to shareholders of any other form of corporation. Those benefits include insulation from ordinary corporate business debts. Liability for those corporate business debts is limited to the assets of the corporation.

Answer to Question 2

FALSE

[berenicecastro]

TYSM

[Viet Thy]

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