Which of the following is a correct statement relating to the concept of mutual agency and the corporate form of business?
A)There is no mutual agency with the corporate form of business.
B)Mutual agency may or may not exist in a corporation,depending on the individual state law.
C)Mutual agency always exists in the corporate form of business.
D)Mutual agency may or may not exist in a corporation,depending on a vote by the shareholders.

Question

Quizplus · Accepted Answer

Mutual agency is a feature of partnerships and not corporations. In a partnership, all partners have mutual agency, meaning that each partner can enter into contracts and make decisions that bind the partnership as a whole. In contrast, in a corporation, only the board of directors has the power to make decisions and enter into contracts on behalf of the corporation. Shareholders have limited liability and are not involved in the day-to-day management of the corporation.

Which of the Following Is a Correct Statement Relating to the Concept