True or false: Stockholders do not have the power to bind the corporation to contracts. This is referred to as lack of mutual agency.

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True or false: Stockholders do not have the power to bind the corporation to contracts. This is referred to as lack of mutual agency.

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Professer1shotgo Professer1shotgo · Answer 1

Professer1shotgo Professer1shotgo

Answer: This is true

Explanation: Trust me... got it wrong once and I don't want anyone else to get it wrong.

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Tundexigo Tundexigo · Answer 2

It is a true statement that the stockholders do not have the power to bind the corporation to contracts.

What is it called a lack of mutual agency?

A stockholder is said to have a lack of mutual agency because the corporation acts through its agents who are its officers and managers.

The stockholders are not the corporation's officers and managers and thus, do not have the power to bind the corporation to contracts.

Therefore, It is a true statement that the stockholders do not have the power to bind the corporation to contracts.