Asked by Grace Thomas on Jun 27, 2024
Verified
What do nonprofit corporations do with profits?
A) Distribute them to shareholders.
B) Distribute them to stockholders.
C) Provide services to members and reinvest in the business.
D) Sell them to stockholders.
E) Nonprofit corporations are not allowed to earn profits.
Nonprofit Corporations
Organizations that operate for charitable, educational, scientific, or public safety purposes without the intention of making profits for owners or shareholders.
Shareholders
Shareholders are individuals or entities that own one or more shares of stock in a corporation, giving them a claim on part of the corporation's assets and earnings.
Reinvest
To allocate earnings or profits back into a business, venture, or asset to potentially achieve further growth or gains.
- Absorb the critical concepts and legal bases of corporations, with emphasis on distinguishing between diverse corporate entities like C-corp, S-corp, and nonprofit organizations.
Verified Answer
GM
Gabriela MonserratJul 02, 2024
Final Answer :
C
Explanation :
Nonprofit corporations reinvest their profits back into the organization to further their mission, rather than distributing them to shareholders or stockholders. This can include providing services to members or investing in operational improvements, programs, or outreach efforts.
Learning Objectives
- Absorb the critical concepts and legal bases of corporations, with emphasis on distinguishing between diverse corporate entities like C-corp, S-corp, and nonprofit organizations.