Rica, the president of XYZ Corporation was authorized by the Board of Directors of XYZ Corporation to obtain loan from ABC Bank and to sign documents in behalf of the corporation. Rica personally negotiated for the loan and got the loan at very low interest rates. Upon maturity of the loan, XYZ Corporation was unable to pay. Which statement is most accurate? a. Because Rica was personally acting in behalf of the Corporation, she can held personally liable b. If XYZ Corporation cannot pay, Rica can be held subsidiarily liable c. Rica, as President, cannot be personally held liable for the obligation of the corporation even though she signed all the loan documents, because the loan was authorized by the Board d. ABC Bank can choose as to who it wants to hold liable for the loan
Rica, the president of XYZ Corporation was authorized by the Board of Directors of XYZ Corporation to obtain loan from ABC Bank and to sign documents in behalf of the corporation. Rica personally negotiated for the loan and got the loan at very low interest rates. Upon maturity of the loan, XYZ Corporation was unable to pay. Which statement is most accurate? a. Because Rica was personally acting in behalf of the Corporation, she can held personally liable b. If XYZ Corporation cannot pay, Rica can be held subsidiarily liable c. Rica, as President, cannot be personally held liable for the obligation of the corporation even though she signed all the loan documents, because the loan was authorized by the Board d. ABC Bank can choose as to who it wants to hold liable for the loan
Chapter1: Comprehensive Cases
Section1.8: Livent, Inc.
Problem 6Q
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Rica, the president of XYZ Corporation was authorized by the Board of Directors of XYZ Corporation to obtain loan from ABC Bank and to sign documents in behalf of the corporation. Rica personally negotiated for the loan and got the loan at very low interest rates. Upon maturity of the loan, XYZ Corporation was unable to pay. Which statement is most accurate?
a. Because Rica was personally acting in behalf of the Corporation, she can held personally liable
b. If XYZ Corporation cannot pay, Rica can be held subsidiarily liable
c. Rica, as President, cannot be personally held liable for the obligation of the corporation even though she signed all the loan documents, because the loan was authorized by the Board
d. ABC Bank can choose as to who it wants to hold liable for the loan
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