Failure To Follow Corporate Formalities – Fatal To Breach Of Contract Claim
Posted Oct 28, 2020
By Washington State Business and Real Estate Lawyer David C. Tingstad
No two closely held business are alike. In a corporate setting, following corporate formalities is critical for a host of reasons, including to maintain the separateness of the corporation from the shareholders. A recent Washington decision, Nelson v. Vetter, Inc., No. 80144-9-I, 2020 WL 6036825 (Wn. App. Oct. 12, 2020), reminds us of the need to comply with corporate formalities in a timely manner.
In 2001, Plaintiff Nelson became employed by defendant Vetter, Inc. (the “Company”) pursuant to a written employment contract. The contract provided that the Company would issue 15% of the stock in...Read More