Question

Marguerite starts a corporation. Her articles of incorporation specifically state that the corporation will work in the beauty products industry. Marguerite would like to take out a loan on the company's behalf. She:a. cannot, because borrowing is not an express power in the articles.b. can, because it is illegal to forbid the borrowing of money.c. can because of the implied powers of the corporation.d. cannot, because corporations cannot borrow money.

Answer 1

C. Can because of the implied powers of the corporation

Step-by-step explanation:

A charter defines the powers and specifies the legal rights of a corporation.

A corporate is considered a separate legal i.e different from it's owners. Charters provide corporations with the right to borrow from financial institutions. As a separate legal entity, a corporate can enter into contracts in it's own name and can sue and get sued in it's own name.

Apart from express powers provided in the charter, there are some implied powers, which allow a corporate to perform legal acts, targeted towards achievement of corporate goals and ensure efficient operations.

Thus, Marguerite in the given case can avail a loan for the corporate purpose, directed at achievement of it's objectives under the implied powers provided as per the charter.