Section B - Scenario 3
GreenCanopy is a newly formed Non-Governmental Organisation (NGO) dedicated to reforestation. The founders want to incorporate the organisation to protect themselves from personal liability, but they do not intend to distribute any profits to members; all funds will be reinvested into planting trees.
Which of the following is the most appropriate business vehicle for GreenCanopy?
ACCA · Question 54 · The formation and constitution of business organisations
Section B - Scenario 3
GreenCanopy is a newly formed NGO. Once incorporated, GreenCanopy Ltd purchases a plot of land to plant trees. One of the founders, Elena, is sued by a local resident who claims the trees are blocking their light. The resident sues Elena personally, arguing that since she controls the NGO, she is the true owner of the land.
Will the resident's claim against Elena succeed?
Answer options:
Yes, because Elena is the controlling mind of the NGO.
Yes, because NGOs do not have the same corporate protections as commercial companies.
No, because GreenCanopy Ltd is a separate legal entity and owns the land in its own right.
No, because planting trees is a charitable act.
60 questions · hints · full answers · grading
Expert