After a Fruitful First Five Years, Serenity Stables, LLC (A

question 218

True/False

After a fruitful first five years, Serenity Stables, LLC (a retirement ranch for racehorses), thinks it may be able to attract donations from animal advocate groups and even the federal government if it becomes a nonprofit corporation. As its business advisor, you explain that as a nonprofit corporation, the owner(s) may earn a salary but the business should not seek after-tax profits.

---

Definitions:

Secured Creditors

Creditors who have a legal interest, or lien, in the debtor's assets or property as collateral for the debt, giving them a higher priority over unsecured creditors in case of default.

Preferential Payment

A payment made to a creditor before others in the context of bankruptcy, which often must be paid back if found to unfairly favor one creditor over others.

Bankruptcy Petition

A formal request filed by an individual or corporation declaring inability to pay debts, seeking relief through bankruptcy court.

Means Test

A financial analysis used to determine an individual's eligibility for certain types of social assistance or legal aid based on their income.