Question with Sample Answer—Corporate Powers.

Kora Nayenga and two business associates formed a corporation called Nayenga Corp. for the purpose of selling computer services. Kora, who owned 50 percent of the corporate shares, served as the corporation’s president. Kora wished to obtain a personal loan from his bank for $250,000, but the bank required the note to be cosigned by a third party. Kora cosigned the note in the name of the corporation.

Later, Kora defaulted on the note, and the bank sued the corporation for payment. The corporation asserted, as a defense, that Kora had exceeded his authority when he cosigned the note. Had he? Explain. (See pages 755–756.)

—For a sample answer to Question 29–2, go to Appendix G at the end of this text.