How do I learn about dissolving my nonprofit?
There are a few steps you will need to take when dissolving or terminating your 501(c)(3) nonprofit organization, starting with a vote from your board of directors to dissolve the organization.
Before the board of directors makes the important decision to dissolve the organization, they will first need to create a "plan of dissolution," first!
Board members may not be aware of how to dissolve and organization, so the planning may take time. Throughout this process, it is beneficial to have the minimum number of board members required by your bylaws remain on your board to aid the dissolution process.
Much like when the nonprofit was originally formed, you will need to notify your state (typically the Attorney General's office) about your organization's change in status. Whether or not you have assets to distribute will dictate what types of forms you need to file. Each state will have different regulations regarding the filing process. For example, here are the steps involved for dissolving a nonprofit in Illinois. For more information on your own state's regulations regarding dissolution, find your state government's web site.
Finally, you will need to also notify the IRS by filing all required documentation, including a form 990. Learn more about IRS rules regarding dissolution.
See our related Knowledge Base article Where can I find information about collaboration and other kinds of strategic alliances?
Have a question about this topic? Ask us!
Candid's Online Librarian service will answer your questions within two business days.
Ask usExplore resources curated by our staff for this topic:
Staff-recommended websites
-
Staff pick
Nonprofit Law Blog
Dissolution
Nonprofit Law Blog discusses nonprofit dissolution.
-
Fieldstone Alliance
Nonprofit Decline and Dissolution Report [PDF]
This report sheds light on an important, and yet poorly understood potential phase of an organization's life cycle-going out of business. NOTE: This is an archived version of the original page.
-
2009 Form 990 or 990-EZ (Schedule N) [PDF]
Schedule N: Liquidation, Termination, Dissolution, or Significant Disposition of Assets
-
Dissolving a Georgia Nonprofit Organization
Pro Bono Partnership of Atlanta Outlines how to dissolve a Georgia Nonprofit.
-
Insight Center
Mergers, Consolidations, Dissolutions, and Affiliations
A description of the different legal forms for joining two nonprofit corporations.
-
IRS Publication 4779
Facts about Terminating or Merging Your Exempt Organization
Most tax-exempt organizations that end their operations, either through shutting down, transferring their assets or merging with another tax-exempt organization, must inform the IRS about the details of the action.