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GiftLaw Pro Home   >  Chapter 7 - Charitable Organizations  >  7.3 Charitable Governance  >  7.3.1 Charitable Corporate Formation and Management Issues  >  Basic Quiz

Basic Quiz - 7.3.1 Charitable Corporate Formation and Management Issues

1. The advantage of an unincorporated association is that its members are not personally liable for the obligations of the association.
           
2. Just like a charitable trust or unincorporated association, a corporation does not need to file any documents with a state agency to be created.
           
3. For a limited liability company created by a tax-exempt organization to be tax exempt itself, the limited liability company must submit its own application for tax-exempt status.
           
4. In a fiscal sponsorship scenario, the sponsoring organization cannot act merely as a conduit to channel funds to the sponsored organization.
           
5. While Sec. 501(c)(3) organizations are discouraged from having a substantial part of their activities consist of the influencing of legislation or the carrying on of propaganda, there are no negative tax consequences for doing so.
           
6. Private foundations are absolutely prohibited from lobbying.
           
7. Very few not-for-profit entities must abide by state-law fiduciary standards when it comes to operating and managing affiliated entities.
           
8. There are no particular restrictions or requirements imposed upon functionally integrated Type III SOs compared to Type I, Type II or Type III non-functionally integrated SOs.
           
9. For private foundations, program-related investments do not count towards the foundation's annual distribution requirement.
           
10. If a program-related investment begins to generate a high rate of return on the investment, the investment may be disqualified.