Are there any restrictions on the types of activities a nonprofit corporation can engage in?
Yes, there are restrictions on the types of activities a nonprofit corporation can engage in South Dakota. According to the South Dakota Nonprofit Corporation Act, a nonprofit corporation may only engage in activities that are lawful, necessary, and in furtherance of its mission. Illegal activities, such as gambling, are not allowed. A nonprofit corporation may also not use funds for activities that are “beyond the scope of its purposes or inconsistent with its purposes.” In addition, a nonprofit corporation may not engage in activities that result in a substantial part of its income being used for private inurement or private benefit of its directors or officers. Finally, a nonprofit corporation must operate exclusively for charitable, religious, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals. Any activity that does not fit within these purposes does not comply with South Dakota law.
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