The Nature of Corporations Flashcards
1
Q
AP Smith
A
Corporation which manufactured fire hydrant valves made a small donation to Princeton University.
Rule: Corporations are permitted to make donations to charitable organizations or educational institutions but there are limits.
(1) the amount donated must be modest. Must be less than 1% of company’s capital and surplus
(2) the corporation must benefit or advance the interests (via publicity or some other benefit)
(3) The corporation must reasonably believe that it would aid the public welfare and
(4) The donation cannot be made to a “pet charity” in furtherance of personal rather than corporate ends.
