Which of the following statements is true of nonprofit corporations?

Question

Quizplus · Accepted Answer

Nonprofit corporations are prohibited from distributing dividends to members or shareholders because they are not formed for the purpose of generating profits. Instead, any excess revenue is reinvested back into the organization to further its mission. Members of nonprofit corporations also have limited liability, meaning their personal assets are not at risk if the organization faces legal or financial issues. Nonprofit corporations are also typically exempt from federal and state income taxes, and donors can take tax deductions for their contributions.

Which of the Following Statements Is True of Nonprofit Corporations