Hi
Nanjain! I'd be happy to chat with you a little more about this question! (It's one of my faves!)
So, first off - the "negation technique," in its true form, doesn't really apply here. We use assumption negation to identify the answer that "must be true in order for the argument's logic to be valid" on assumption questions. Now, the good news is that we can use a similarly "formulaic" structure to apply process of elimination on this question (but one with a totally different objective)!
For inference questions, the correct answer is the one that is guaranteed based on the given premises in the stimulus. So, wrong answers (even the convincing ones!) could be true, ...they might even be likely to be true... but as soon as they "could be false," they are not viable options for a proper inference. So, we can test inference answer choices by asking the question, "is this guaranteed to be true based on the information above?"
Now, the trick here is that if we can reason through a way an answer could be false, while complying with the parameters of the stimulus - we can eliminate it! What makes this question particularly tricky, is that it brings into play what we at Veritas call "mental intertia," basically - our bias toward our preconceived experiences with the topic. (I actually take a look at this question at 29:18 of
this GMATClub webinar on Mental Inertia. Feel free to check it out if you'd like!)
The question makes it *sound* like the club is exclusive and specific to only those who are successful in business, but it doesn't actually say that this is the case! We could be in a position where only those successful in business are invited, and perhaps all those individuals are either community leaders or ex cons (See the lefthand of the figure below,) or we could be in a position where absolutely everyone is invited! (see righthand side)

So, if an answer could be false, we can eliminate it from the running. Let's take a look at our options:
There are community leaders, as well as ex-convicts, who are successful in business. All people who are successful in business are invited to join the Reynard Club.
Which of the following can be logically inferred based on the statements above?
(A) All who are encouraged to join the Reynard Club are successful in business.
<- Just because all people who are successful are invited to join, doesn't tell us all who are invited are successful. Remember, according to the info, this club could be not-so-exclusive at all. Absolutely everyone could be invited! (See righthand visual). This one's out!(B) All who are encouraged to join the Reynard Club are community leaders or ex-convicts.
<- Again, see righthand visual - we could have plenty of others who are invited. So while this *could be true,* its definitely not guaranteed based on the info. (C) Some who are encouraged to join the Reynard Club are not community leaders or ex-convicts.
<- Here, the first visual is the key to keep in mind. The stimulus doesn't tell us who isn't invited, so while it could be "no one," as we saw in the above two answers, it could also be "everyone else," as we can see from the lefthand visual. We could be in a position where absolutely all who are successful in business fall under one of those two categories, and no one else is welcome! (how rude!
)(D) Some ex-convicts are encouraged to join the Reynard Club.
<- Bingo! Here, regardless of how we imagine the scenario, we were told that "some ex convicts are successful in business," and that "all who are successful in business are invited to join." So, at the very least, those ex convicts who are successful in business are invited. This answer is guaranteed to be true based on the truth of the stimulus!(E) Some ex-convicts are not encouraged to join the Reynard Club.
<- While we know that "some," are invited, "some" could feasibly be all! (Again, see the righthand depiction.) Because we are not guaranteed that anyone *isn't* invited, this answer can be eliminated, and we can confidently conclude that (D) is our answer!So, slightly different approach - equally structured process.

I hope this helps! I'd be happy to chat more about this question if you'd like - just let me know!