Reference no: EM131660677

Question: Corporate Status. Three brothers inherited a small paper supply business from their father, who had operated the business as a sole proprietorship. The brothers decided to incorporate under the name of Gomez Corp. and retained an attorney to draw up the necessary documents. The attorney drew up the papers and had the brothers sign them but neglected to file the articles of incorporation with the secretary of state's office. The brothers assumed that all necessary legal work had been completed, so they proceeded to do business as Gomez Corp. One day, a Gomez Corp. employee, while making a delivery to one of Gomez's customers, negligently ran a red light and caused an accident. Baxter, the driver of the other vehicle, was injured as a result and sued Gomez Corp. for damages. Baxter then learned that no state authorization had ever been issued to Gomez Corp., so he sued each of the brothers personally for damages. Can the brothers avoid personal liability for the tort of their employee? Explain.