In a recent Pennsylvania court case, remodeler Anthony Surman was not only found guilty of scamming clients, but failed to follow corporate formalities, and as a result exposed his personal assets to potential forfeiture.
Attorneys Julie Goldstein and Ronald Williams, who specialize in representing contractors, authored a blog on the case, noting it as a unique learning opportunity.
“The contractor had registered a corporation ... but it was terminated prior to entering into the contract with the [clients],” she says. The homeowners’ complaint concerned a bathroom renovation, noting frequent timeline extensions, multiple requests for additional payment, and poor workmanship. “Basic law is that if you follow the formalities, your personal assets are protected. But a judgment against an individual means they can go after your personal assets.”
In order to be considered a legitimate corporation, businesses in Pennsylvania need to fulfill some basic requirements, or formalities, such as having a business bank account and keeping a set of books, among others. Surman’s failure to maintain his corporate identity exposed him as a liable individual under Pennsylvania’s Home Improvement Consumer Protection Act.