Steps for Dissolving a Nonprofit

By Holly Cameron

Nonprofit organizations usually aim to raise funds for a particular social, educational, charitable or religious purpose. Those in control of the organization may choose to dissolve it if it has achieved its purpose or if other circumstances dictate that dissolution is the best course of action. The precise steps for dissolving a nonprofit depend on the legal basis of the organization and the state where it is registered, but basic principles apply in almost all circumstances.


The nonprofit’s bylaws or articles of incorporation usually set out a specific procedure for dissolution. In most cases, the directors must meet and take a vote on the decision to dissolve. If the nonprofit also has members who are not directors, the directors should contact the members and invite them to vote on the issue. The members may either convene a separate meeting to discuss the matter or may confirm their agreement in writing. If the members cannot agree, the bylaws or articles usually allow dissolution by a majority vote.


The nonprofit must file certain documentation with the state authorities in which it is incorporated to confirm the dissolution. For example, the state of Delaware requires nonprofit corporations to file a formal certificate of dissolution with the secretary of state in accordance with Section 275 of the Delaware General Corporations Act.

Ready to form a nonprofit? Get Started Now


Most nonprofit organizations have Section 501(c)(3)tax-exempt status with the IRS. When the organization decides to dissolve, it must notify the IRS and submit a final tax return by the 15th day of the fifth month after the date of termination. If the nonprofit is also registered for state tax purposes, it must notify the relevant state authorities of the effective date of dissolution.

Transfer of Assets

Nonprofit organizations often hold assets in trust for their specific aims and purposes. In most cases, if any assets remain after the decision to dissolve, the directors and members will agree to distribute them in accordance with the nonprofit’s stated purposes. If this is not possible – for example, if the nonprofit’s purposes have been fulfilled – the organization must decide how to distribute any remaining assets. In some states, the directors must seek permission from state authorities before doing this. For example, in California, the nonprofit corporation should contact the attorney general’s office for permission before distributing assets on dissolution.

Ready to form a nonprofit? Get Started Now
How to Dissolve a Charitable Non-Profit Organization


Related articles

How to Incorporate a Non-Profit Ministry

Ministries are often operated under the guidance and nonprofit status of an affiliated church. When structured in this manner, the ministry does not have the financial independence to raise money from third-party entities such as foundations, government agencies and corporations. For recognition as an independent financial entity, a church-affiliated ministry or new ministry organizing for the first time must incorporate under a state nonprofit incorporation statute, following the same procedures as any new nonprofit organization. Some churches will spin off a ministry into a separate nonprofit entity but maintain control over the new organization by populating the board of directors with church officials. This enables the ministry to establish financial independence for fundraising purposes while still maintaining a close affiliation with its governing church.

The Requirements to Start a Non-Profit Business in South Carolina

Nonprofit businesses provide important services for communities, such as giving support to low-income families or raising awareness of important social issues. While you can do these things as an individual, organizing as a nonprofit allows others to help you operate your charity and encourages donations more effectively. Typically, South Carolina nonprofits are organized as nonprofit corporations.

Procedure for Changing Bylaws

Whether your company is for-profit or a nonprofit, chances are there will come a time when you will want to amend its bylaws, the internal guidelines and procedures that govern its operation. Following the proper amendment procedures is essential to adopting and later enforcing changes to this important corporate document.

Doing the right thing has never been easier.

Related articles

What to Do With Money When Dissolving a 501c3?

To qualify for 501(c)(3) status, an organization must operate exclusively for religious, charitable, scientific, ...

How to Dissolve a Florida Nonprofit Organization

In Florida, nonprofit organizations may dissolve voluntarily, before or after beginning business, by filing forms from ...

The Duties and Responsibilities of a Board in Dissolving a 501(c)(3)

The larger issues of a 501(c)(3) organization, such as whether to dissolve, are generally decided by the nonprofit ...

Wisconsin Non-Profit Laws

A nonprofit is an organization formed to serve the public good, such as for a charitable, scientific, religious or ...

Browse by category
Ready to Begin? GET STARTED