Incorporation and Dissolution of Nonprofits - Module 2 of 5

Question 1

Which of the following is a possible business form for a nonprofit?

Nonprofit corporation

Charitable trust

Unincorporated association

Any of these could work

Question 2

What is a charitable trust?

A trust that is also a charity

A trust that is established and must be maintain exclusively for the benefit of a valid charitable purpose.

A limited liability nonprofit that also collects donations.

A charity that collects money on behalf of a beneficiary

Question 3

What of the following is a disadvantage of an unincorporated association?

No separate existence or legal status

Individual members may be personally liable for debts incurred by the association

Financial institutions may be reluctant to lend money to an unincorporated association

All of these

Question 4

Which of the following is a benefit to incorporation?

Legal status for an organization as an individual that exists in perpetuity

Limitation of liability for members

The right of the corporation to hold property and sue

All of these

Question 5

What are articles of incorporation?

A document that includes a business plan for a nonprofit

A document filed with the secretary of state that includes basic information about an organization such as its address, name of incorporators and its registered agent, and its stated organizational purpose

A mission statement of an organization

A list of places in which the organization intends to do business

Question 6

What is a registered agent?

A person authorized to do business on behalf of an organization in another state.

The person that buys and sells property for an organization.

The president of an organization, or its corporate secretary.

A person designated by a business entity to receive legal correspondence on behalf of the entity within the state which the agent is located.

Question 7

What is the purpose of an annual meeting?

To create a social gathering for the board of directors.

To inform an organization’s stakeholders on the major events and decisions affecting an organization, often required by state law.

To have an annual trade show.

To start the fiscal year for the organization.

Question 8

What are bylaws?

The state laws that apply to a nonprofit organization

The internal rules and procedures that govern a nonprofit organization

A document written by human resources for the staff of an organization

The parliamentary procedures used at annual meetings of an organization.

Question 9

What is Private inurement?

Insurance for members of a nonprofit organization.

When nonprofit funds are used to benefit private individuals rather than the charitable purpose of the organization.

When public funds are used to pay private individuals.

When a nonprofit incorrectly labels an asset on its exempt organization tax return.

Question 10

On what IRS form do nonprofit organizations file their required tax return?

Form 1040EZ

Form 519

Form 990

All of these