Author Question: Mention the advantages and limitations of nonprofit (or not-for-profit) ... (Read 48 times)

saraeharris · **on:** Jul 14, 2018

Mention the advantages and limitations of nonprofit (or not-for-profit) corporations.

Question 2

According to the text, which of the following statements is false?
A) The sole proprietor is often the sole manager.
B) Many sole proprietors cannot afford to hire the help they need.
C) Potential employees often feel there is no room for advancement in a sole proprietorship.
D) When compared to larger businesses, the lure of employee benefits is one reason why people go to work for sole proprietorships.
E) The sole proprietor often finds it hard to keep competent employees.

mochi09 · **Reply #1 on:** Jul 14, 2018

Answer to Question 1

The following are the advantages of nonprofit corporations:
Earnings are exempt from federal and state income taxes.
Members and directors have limited liability.
Individuals who contribute money or property to the nonprofit can take a tax deduction, making it easier for these organizations to raise funds from donations.

The following are the disadvantages of nonprofit corporations:

It has members (who may pay dues) but cannot have stockholders.
It cannot distribute dividends to members.
It cannot contribute funds to a political campaign.
It must keep accurate records and file paperwork to document tax-exempt status.

Answer to Question 2

D