What characterizes a non-stock corporation?

A non-stock corporation is primarily characterized by the fact that no part of its income is distributable as dividends to its members. This means that unlike traditional stock corporations, where profits can be distributed to shareholders in the form of dividends, a non-stock corporation typically reinvests any income back into the organization to further its mission or goals. Such entities often serve charitable, educational, religious, or other non-profit purposes, emphasizing the pursuit of objectives rather than generating profits for distribution.

The other options highlight characteristics associated with stock corporations or incorrectly suggest elements that do not apply to non-stock entities. For example, stating that its capital is divided into shares of stocks implies a structure that involves share distribution, which is not applicable to non-stock corporations since they do not issue stock. Similarly, having shareholders who receive profits and the possibility of trading on stock exchanges pertain to profit-driven corporations, which contrasts sharply with the purpose of non-stock corporations.