Question #2:

You and a friend decide to start a custom landscaping business in New York. You both agree that your friend will be responsible for managing and running the business. After discussing this with your attorney and accountant, you and your friend incorporate the business and agree to be equal shareholders. You both designate yourselves co-Presidents of the firm.

On May 10, your friend mailed to the New York Secretary of State a document titled Articles of Incorporation in accordance with New Yorks Business Corporation Law. The document included the name of your corporation, Heavenly Gardens, Inc., the name and address of Heavenly Gardens Inc.s registered agent, and your friends name and address (as incorporator). Your friend signed the document and included a check to cover the filing fee.

On May 11, your friend, assuming that the articles of incorporation had been correctly filed and purporting to act on behalf of the corporation, entered into a one-year employment contract with Sally, who is hired to help install the custom gardening plants, shrubs, and trees your company grows and curates. Your friend signed the employment contract as President, Heavenly Gardens, Inc. and Sally signed immediately below. Sally began working the next day, and the first order was received, May 18, with several orders from different landowners in the queue.

On May 30, your friend received a letter from the New York Secretary of States office returning the articles of incorporation and her check. The letter stated that the articles, although received on May 15, had not been filed because they failed to include the number of authorized shares of Heavenly Gardens, Inc.

On receiving this letter, your friend immediately revised the articles by adding the number of authorized shares. On June 5, your friend mailed back the revised articles to the Secretary of States office, along with another check to cover the filing fee.

Also on June 5th, on the way to a fence installation, Sally rear ends another car while approaching a stop light, causing a relatively large tree and soil from the back of the truck to spill out on the street. This caused a chain reaction of two other cars colliding with one another, injuring those two drivers seriously.

The revised articles of incorporation were received and filed by the Secretary of States office on June 10.

Four months later, Heavenly Gardens, Inc. went out of business and Sallys employment was terminated.

1. When did Heavenly Gardens, Inc. come into existence? Explain fully.
2. Who, if anyone, is liable to Sally on the employment contract? Explain fully.
3. Who, if anyone, is liable to the injured drivers? Explain fully.