Question

Commonly, a nonprofit corporation's powers will be limited pursuant to which of the following?

• A purpose clause in its articles of incorporation
O A statement of existence in its articles of organization
O The majority vote of its common shareholders
• The majority vote of its preferred shareholders which one is the answer

Answer 1

A nonprofit corporation's powers are commonly limited by a purpose clause in its articles of incorporation, which outlines its mission and permissible activities. The correct answer is option a.

Step-by-step explanation:

Commonly, a nonprofit corporation's powers will be limited pursuant to a purpose clause in its articles of incorporation. This clause defines the specific activities and operations the nonprofit is authorized to engage in according to its mission and aims to ensure that the corporation's activities stay aligned with its intended non-commercial purposes. The other options such as a statement of existence, majority vote of common or preferred shareholders relate more to profit-driven corporations, where such votes often influence corporate decisions and policies.