How to Relocate a Non-Profit to Another State

By Cindy Hill

A nonprofit organization is a type of business entity that operates for charitable or educational purposes and does not distribute profits to owners or shareholders. Nonprofits must follow the incorporation laws of each state where they are doing business. Relocating a nonprofit corporation to another state can be complex, as it involves meeting the legal requirements for closing down the business in one state and starting in another.

Relocation and Registration

To begin operating as a nonprofit in most states, you must start fresh by filing to incorporate as a nonprofit organization under that state's laws. You must also obtain either a new Tax Identification Number or Employer Identification Number from the IRS and a state employer identification number or payroll identification number, if required by the new state. In most states, because you are effectively starting a new legal entity, you must also reapply for federal tax exempt status. The District of Columbia and a few states, like Virginia and Pennsylvania, allow a nonprofit corporation to file domestication papers instead of reincorporating, though only if it is moving from a state with similar domestication provisions. Domestication allows your nonprofit to keep its existing federal tax exemption, but other requirements of state law must still be met.

Dissolution

To cease doing business in your former state, you must dissolve your nonprofit corporation in accordance with the laws of that state. This process includes adopting a resolution dissolving the organization, closing out the books and filing any final state reports and tax documents, paying all outstanding debts and distributing any remaining assets. If the nonprofit has federal tax-exempt status, or if state laws require, the assets of the organization remaining after debts have been paid might have to be distributed to other qualifying nonprofit organizations. If you have set up and registered your nonprofit in the new state, you may be able to transfer the remaining assets to the new entity in the new state.

Ready to incorporate your business? Get Started Now

Management Requirements

Any corporation, including a nonprofit, must follow the management rules of the state where it is located. If you move your nonprofit to a new state through domestication or reincorporation, you must comply with the new state's laws regarding annual report filing, number of trustees or directors, and all other management mechanisms. The rights and obligations of members and the requirements for record keeping, including meeting minutes and membership logs, vary from state to state and may be amended by state legislatures. Up-to-date information on your new state's nonprofit laws is critical to ensure compliance with legal requirements.

Foreign Corporation

Moving your nonprofit organization to another state does not necessarily mean that you need to terminate the organization in the old state and re-create it in the new state. An alternative is to register to do business in the new state as a foreign nonprofit corporation. You will need to obtain any tax exemptions and payroll identification numbers from the new state, and comply with the reporting requirements of both states, but this can be simpler and less expensive than dissolving the nonprofit in one state and reincorporating it in another. If you change your bylaws or articles of incorporation in your home state, you will likely need to file an update with the state in which your nonprofit registered as a foreign corporation.

Ready to incorporate your business? Get Started Now
How to Change the State of Incorporation

References

Related articles

How Often Must You Renew a 501(c)(3)?

Running a nonprofit organization requires strict adherence to both state and federal laws. And if your organization pursues federal 501(c)(3) tax exempt status, you must go through a cumbersome application process with the Internal Revenue Service. However, once you have been approved, your organization does not need to renew its 501(c)(3) exemption.

How to Dissolve a Charitable Non-Profit Organization

Charities provide important services to their communities, but many charities eventually cease to operate. For example, a nonprofit may complete its mission, or it might run out of funding or community support. However, dissolving a charitable nonprofit that is registered with the state is not as simple as closing the doors. A nonprofit must follow proper dissolution procedures according to state law, or it might incur fines or other penalties.

What Happens When I Dissolve a Non-Profit?

When you dissolve a nonprofit organization, the steps you will need to take are similar to those for dissolving a for-profit organization; however, several additional steps are generally required by the Internal Revenue Service. Dissolution must be done in a manner that complies with the law to prevent directors and officers from being held personally liable for errors, oversights or potentially unlawful actions.

LLCs, Corporations, Patents, Attorney Help

Related articles

How Can a Nonprofit Change Its Name?

A nonprofit is organized under state law as either a corporation or an unincorporated association. A corporation, the ...

How to Transfer a C-Corporation From Another State to Florida

Like some other business types, C corporations, or corporations that are taxed separately from their owners, must ...

How to Change a Corporation From Nonprofit to Profit

A nonprofit organization is a public entity. Unlike a for-profit corporation, a nonprofit is not owned by individuals ...

How to Re-Open a Dissolved Company

In theory, corporations can exist forever, but they can also go out of business or be dissolved for other reasons. For ...

Browse by category
Ready to Begin? GET STARTED