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Formation and Operation of a Nonprofit Corporation

Nonprofit corporations are a useful tool for organizing for charitable, educational, religious, literary, or scientific purposes while reducing the risk of individual liability in accomplishing those goals. A nonprofit corporation is often referred to as a 501(c)(3) corporation due to the tax code provision under which most nonprofit corporations are considered exempt from federal taxation.

Mutual Fund Prospectus Comparable Information Requirements

(Mutual Fund Prospectus Comparable Information Requirements)

Regulation of the Price of Mutual Fund Shares

The Securities and Exchange Commission requires that open-ended mutual fund shares must be sold at their net asset value per share plus allowable sales charges or fees. Under Rule 22c-1 of the Commission, an issuer, underwriter, or dealer may not redeem or repurchase a share of a registered investment company or mutual fund “except at a price based on the current net asset value of such security…”

Reliance on Committee Reports

Corporation codes in all states allow the corporate board of directors to appoint committees comprised of directors and to delegate board powers to the committees. Appointment powers are usually addressed in the corporation’s articles of incorporation or bylaws, which specify the formalities for appointing a committee. Each state’s corporation code must be consulted to determine if certain powers are nondelegable.

Responsibilities of Corporate Directors and Officers

Boards of directors and officers of corporations have distinct functions. Generally, directors set corporate policy while officers carry out that policy.

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    Fort Smith, Arkansas 72917-0205
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