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.

Question

Quizplus · Accepted Answer

If Serenity Stables decides to change its form of business ownership to a nonprofit corporation, it will not seek personal profits for its owners. If the owner(s) works in the business, he/she can expect a salary. By law, the firm cannot distribute any additional income to owners. It must put all revenues and/or contributions back into the business.

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