S corporation is a lucrative entity and its liability protection is limited in that it does not grant immunity for every lawsuit. This is an example of a case in which immunity is not granted. Among the most outstanding characteristics of an S corporation is that the entity does not pay taxes. It is the shareholder that has the responsibility of filing taxes. Hanging on this fact, and that there is only one owner of the corporation, then it means that he or she is the business entity’s principal owner. Any kind of torts committed by the employees should, therefore, be his or her responsibility (Loucks, 2014). To support this fact, we can apply the ‘Respondent Superior Doctrine’ concept which states that there is no need for more details about a case to be provided whilst the existing facts already prove liability (Burns, 2010). The concept of ‘Respondent Superior Doctrine’ is defined by Barnes and American Law Institute (2001).
The shareholder can be relieved from liability in two events; the first is if there is an assumption of risk which may prove that the plaintiff knew that she would get herself in danger but willingly exposed herself to it (Feldman & Stain, 2009). The second event is if there is an intervening cause. This is if there is an act that is separate and that breaks the relationship between the defendant and the plaintiff (Hodgson, 2016). For instance, if the brakes of the vehicle became faulty. In these two cases, then the defendant may introduce the evidence which will prove any of them and that will retrieve him or her from liability.
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In a nutshell, the alluded facts are enough to convince one that he or she is liable for the torts committed while undertaking his or her duties. Because of this, the sole shareholder of an S corporation should not be able to avoid liability for the torts of his or her employees.
Reference
Barnes, A. M. C., & American Law Institute-American Bar Association Committee on Continuing Professional Education. (2001). Health care law desk reference . Philadelphia, PA: American Law Institute-American Bar Association, Committee on Continuing Professional Education.
Burns, J. J. (2010). Respondent Superior as an Affirmative Defense: How Employers Immunize Themselves from Direct Negligence Claims. Mich. L. Rev. , 109 , 657.
Feldman, E. A., & Stein, A. (2009). Assuming the risk: Tort law, policy, and politics on the slippery slope. DePaul L. Rev. , 59 , 259.
Hodgson, D. (2016). The law of intervening causation . Routledge.
Loucks, T. G. (2014). Travelers beware: Tort liability in the sharing economy. Wash. JL Tech. & Arts , 10 , 329.
