Question

Joan, who is a massage therapist graduate, incorporated a massage type business with obe of her minor children as the shareholder. Michelle, who is also her best friend, is a regular client of which Joan had rendered massage services each month. Michelle paid Joan’s professional service thru her insurance benefits from her company. Michelle felt that she wants one more massage service and this time she used the insurance benefits of her son. Jake, and her son’s name as though the client of Joan. Joan issued a receipt in the name of Jake. Please comment on shareholder as minir. Can a minor shareholder acr as director as well? Please comment on legal issue with respect of using the insurance benefits of family member.

Answer 1

A minor can be a shareholder but not a director, due to the legal incapacity of minors to make binding decisions. Using another's insurance benefits without authorization is considered insurance fraud, which is illegal and could lead to legal action.

Step-by-step explanation:

The issue of a minor being a shareholder largely depends on the corporation laws of the specific jurisdiction. Generally, minors can be shareholders, but they cannot act as directors or have legal capacity to make decisions on behalf of the corporation until they reach the age of majority. This is because being a director involves entering into contracts and other legal obligations, which minors are typically not able to do.

The second issue at hand is the potential insurance fraud. It is illegal to use someone else's insurance benefits without proper authorization, as it constitutes fraud. By issuing a receipt in the name of Jake, when the service was rendered to Michelle, Joan has misrepresented the true recipient of the service to the insurance company. This could have legal repercussions for all parties involved.