Question

What best explains the term "lack of mutual agency" of a corporation

Answer 1

A corporation has separate legal entity. It means it can do business by its name. Since a corporation doesn’t have life, it depends on agents. Those agents are Board of directors, Managers, Managing directors, etc – they are hands of corporation for doing day-to-day activities like production, marketing, holding board meeting, etc. They are the only authorized persons of doing so.

Although, stockholders of a corporation are the owners but they don’t have such authorization of conducting works for the corporation. Therefore, they don’t have mutual agency or could be termed as “lack of mutual agency”.