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.

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Definitions:

Actual Authority

The explicit power granted by a principal to an agent to act on their behalf.

Gratuitous Agent

An individual who acts on behalf of another without receiving any compensation or benefit, motivated by voluntary intent or relationship.

Duty of Loyalty

An obligation of an individual, such as a director of a company, to act in the best interests of the company or another person, without personal conflict.

Fiduciary

A person or organization that acts on behalf of another person or persons, putting their clients' interest ahead of their own, with a duty to preserve good faith and trust.