Wenjie recently made an aggressive investment in Fichera Corporation, a publicly

Question

Wenjie recently made an aggressive investment in Fichera Corporation, a publicly held C-corporation, by purchasing 9,000 shares of common stock. In an attempt to protect his investment and assure the profitability of the corporation, Wenjie has been negotiating what he considers to be favorable contracts for the corporation. With respect to Wenjie’s authority to enter into contracts on behalf of the corporation, which of the following is correct? A None of the answer choices is correct. B Wenjie has actual implied authority to contract on behalf of the corporation. C Wenjie has actual express authority to contract on behalf of the corporation. D Wenjie has apparent authority to contract on behalf of the corporation.

Explanation / Answer

When Wenjie has made an investment in Fichera Corporation, a publicly held C-corporation, by purchasing 9,000 shares of common stock. Wenjie’s authority to enter into contracts on behalf of the corporation would be

B. Wenjie has actual implied authority to contract on behalf of the corporation as Fichera Corporation intends to have a reasonable, necessary and customary authority as the shares are common stock. When Wenjie has purchased common stock, then its an implied contract.  

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