Question

You decide to incorporate your bracelet business and get your mother and brother involved in the corporation. Your executive committee is made up of you as the president, your mother as the secretary, and your brother as the treasurer. The three of you are the key officers of the corporation, with you as the CEO, your mother as the head of HR, and your brother as the CFO. The Brady Business Friendship Bracelet (BBFB), Inc., conglomerate is ridiculously successful, earning the three key executives over $100,000 each in salary and bonuses. Before you begin operating, the BBFB decides to become an S Corp designation and to remain a closely held corporation. The corporation is sued in the state where it is incorporated. Every member of the board of directors is liable personally for the lawsuit.
True
False

Answer 1

False. Not every member of the board of directors is liable personally for the lawsuit. The business owner is the one who is held responsible and liable personally for the lawsuit. Though, the lawsuit typically hurts everyone involved depending on the depth of it because it could lead to company shut down which could cause many people to lose their lives.