BLAW 152 Canadian Business Law

Chapter 7

I strongly recommend reading 206 - 217, and 222-243 before starting questions 1-3.

1. Les has a business snowplowing. He has a single employee named Cameron who uses the businesss 2018 Ford Rapture with a snowplow outfitted on it. While plowing a driveway, Cameron negligently ran it into the side of the neighbour's house. The damage to the house and contents is extensive and will likely cost more than $100,000 to fix. Less only business asset is his Ford Rapture and his only personal asset is his 2020 Tesla Model S. In each of the following situations, explain if Les's personal Tesla Model S is at risk.

a) His business is run as a sole proprietor.

b) His business is run as a corporation.

c) Less business is run as a partnership with Cameron. Cameron has no assets of his own. Which of Less assets are at risk and why?

2. Les is the owner, manager, and director of the above corporation. He neglects to pay Cameron his employee wages. Is he personally liable?

See the BC government website.

3. Solomon has retired as a carpenter and started a new career getting into making intricate (and expensive) furniture. He works by commission (he doesn't have inventory, but customers request a thing be built specifically for him). Solomon's projects are becoming more and more time intensive, to the point where he hired an employee (a friend) and one of his sons, Jones, to do some of the work. Currently, both Solomon's friend and his son are part-time but the amount of work involved only seem to be increasing as their talents become known. Solomon hopes that one day his son Jones will carry on the business after he dies. The work has been done out of his garage but now he will be purchasing a small workshop. Solomon has taken the opportunity to ask you what form of business he should enter. Make and justify a recommendation to Solomon, choosing only one of the following:

A sole proprietor

A corporation

A partnership (with his son, Jones)

4. Valery is a senior manager and founder of a corporation. She says to Jamie, a director of the corporation, that she will recommend at the next board meeting that director compensation be increased on the condition that Jamie puts forward a recommendation that Valery's compensation be increased. Should Jamie agree to Valery's request?

See page 225 of the textbook.

5. Jenny is the operator of a cabinet-making shop. A supplier, Harjinder, comes to visit the shop. Jenny points to one of her cabinet makers and jokingly says, Thats Victoria. Shes the boss around here and makes all the important decisions! She is joking but Harjinder thinks she is serious. Victoria later calls Harjinder and says, Could you please send 500 boards of your finest cedar at 6pm tonight? We need it badly Harjinder says, No problem.

Harjinder drops off the cedar that night. Victoria steals all of it and leaves town, never to be seen again. Harjinder tries to collect from Jenny. Would a court force Jenny to pay Harjinder? Why or why not?

See pages 244 - 246 and this video.

6. Craig's Consulting Ltd. is a business incorporated in BC. On their signage and contracts they just have "Craig's Consulting" displayed. Are they entitled to the benefits of limited liability? Explain in 1 or 2 sentences.

See this blog.