Which of the Following Statements About a Not-For-Profit Firm's Ownership

question 8

Multiple Choice

Which of the following statements about a not-for-profit firm's ownership is most correct?

• A) Not-for-profit firms are governed by a board of trustees whose members are elected by the community at large.
• B) The residual earnings (profits) of not-for-profit firms can be distributed to the firm's top managers.
• C) Not-for-profit firms are exempt from federal taxes, but they must pay state and local taxes, including property taxes.
• D) Upon liquidation of a not-for-profit firm, the proceeds from the sale of its assets are distributed, on a pro rata basis, to the firm's employees.
• E) None of the profits are used for private inurement.

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Definitions:

Mentoring

Assigns early-career employees as protégés to more senior ones.

Senior Person

An individual who holds a higher position or rank within an organization, often associated with greater experience or tenure.

Early-Career Employee

An individual who is in the initial stages of their professional journey, often seeking to gain experience and establish themselves in their chosen field.

Executive Socialisation

The process by which new executives learn the cultural and social norms of an organization.