Florida Community Association Manager Practice Exam

Which act prohibits the distribution of corporate income to members?

1. FS 607

2. FS 701

3. FS 718

4. FS 617

The correct answer is: FS 617

The correct answer relates to the Florida Statutes concerning non-profit organizations, specifically FS 617. This statute governs not-for-profit corporations and includes provisions regarding the distribution of income and assets. Under FS 617, distributions of corporate income to members are prohibited, ensuring that funds are used for the organization's mission rather than being distributed as profit to individuals. This statute is essential for maintaining the integrity of non-profit operations, as it reinforces that non-profits must operate to fulfill their stated purposes rather than generating profit for their members. This promotes accountability and adherence to the community's interests, which is particularly important in the context of community associations. Other statutes mentioned address different aspects of corporate governance but do not specifically prohibit the distribution of corporate income to members. For example, FS 607 pertains to for-profit corporations, FS 701 relates to real estate property, and FS 718 deals with cooperatives. Each serves a different function in corporate and community management law, but FS 617 specifically encapsulates the principles governing not-for-profit income distribution.