Question

Ronald Hochberg is the President and sole Director and sole Shareholder of Diamond Auto Body & Repair, Inc., an Illinois corporation. Hochberg ordered and received auto parts form Hoskins Chevrolet. Hochberg paid all of the invoices from a checking account under the name of Diamond Auto Construction. Hoskins continued to send invoices to Diamond Auto Construction, until they accumulated to $40,000.00. When Hochberg was sued for the $40,000.00, he argued that he was not personally liable for the invoices, because the parts were ordered for Diamond Auto Body & Repair, Inc., and that he was only acting as an officer of the corporation. He testified that the corporation was doing business under the assumed name of Diamond Auto Construction. The evidence at trial showed that neither Hochberg nor Diamond Auto Body & Repair, Inc., had registered the assumed name with the Secretary of State as required by statute, nor otherwise indicated to Hoskins that they were dealing with a corporation.

Question (TRUE OR FALSE):

Ronald Hochberg is not personally liable for the debt, even though he failed to notify Hoskins that they were dealing with a corporation.

Subject: Business Law

Answer 1

False

In this case Diamond Auto construction is an assumed company, not registered. Records shows that Hochberg dealt Hoskins under assumed name called Diamond Auto Construction not a registered name.

So according to Illinois law, corporates can take assumed name if they are registered. Otherwise it make personally liable to the debts.

Here Hochberg is personally liable to pay the amount.

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