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What Are the Two Main Theories of Corporate Governance

question 35

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What are the two main theories of corporate governance?


Definitions:

Incorporation

The process of legally declaring a corporate entity to be separate from its owners, thereby providing limited liability and other benefits.

Capacity to Contract

The legal ability of an individual or entity to enter into a binding contract, having the necessary age, mental state, and authority.

Intoxicated

A state of impairment or being under the influence of alcohol or drugs, which can affect a person's physical and cognitive abilities.

Incapacity

A physical or mental condition that makes an individual unable to manage their own affairs or to understand the nature and effects of their actions.

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