Clara Is Planning to Incorporate a New Landscaping Company, "Evergreen

question 30

Multiple Choice

Clara is planning to incorporate a new landscaping company, "Evergreen and Growin'." She has held herself out as an agent for Evergreen and has contracted to buy a truck, tools, fertilizer, and seed and also has entered into a lease on behalf of Evergreen for an office.When she fails to get the loan from the bank, she cannot start the business, so she cancels all the contracts.What are the consequences?

• A)Clara can cancel all the contracts with no personal liability if she told them she was acting as an agent and expressly warranted that she would not be responsible.
• B)Clara may be held personally liable on the contracts because she misrepresented to third parties that she had authority to make contracts on behalf of a non-existent corporation.
• C)Since the company never existed, she gave no implied warranty.
• D)Clara will be held liable for the contracts only if she ever gets the loan.

Gain insights into the challenges and realities of loan acquisition for underprivileged groups in the US.

Recognize the magnitude of corporate and proprietorial profits in the national economy.

Master the concept of present value and how it is influenced by changes in interest rates and time.

Grasp the legislative impacts on payday lending and the consequences for borrowers.

---

Definitions:

Partnership Assets

Assets owned by a partnership that are used for carrying out its business activities.

Capital Balances

The amount of money that partners or owners have invested in a business, which may change over time with the addition of profits or the deduction of losses and withdrawals.

Income-Sharing

A strategy where income is distributed between stakeholders, partners, or employees based on an agreed-upon formula, often used to motivate and reward.

Net Income

The amount of profit remaining after all operating expenses, taxes, and interest are deducted from total revenue.