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Your organization is required by law to transfer all remaining assets to another tax-exempt organization or to the government. (See your organizations articles of incorporation and/or bylaws, and Schedule N of the IRS Form 990).
Dissolving a 501(c)(3) is the process of disbanding an organization and ending its non- profit status. Regardless of the reasons for dissolving its 501(c)(3) status, an organization must follow a series of steps with the state and the Internal Revenue Service (IRS) for the action to officially occur.
For federal tax purposes, youll need to file IRS Form 990 or IRS Form 990-EZ. You must include a completed Schedule N (Liquidation, Termination, Dissolution, or docHub Disposition of Assets), as well as copies of your certificate of dissolution and resolution to wind up and dissolve.
While both words are concerned with the end of a business partnership, dissolution refers to the process itself, and usually to the departure (or death) of one or more individuals from the entity, while termination refers to the cessation of all operations, including the disposal of all assets.
Basic Letter of Dissolution Elements The name of the recipient and the name of the person sending the letter. The purpose of the letter, including the relationship to be terminated and the date of termination, stated in the first paragraph.
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Under most state rules, you start by holding a meeting of the board of directors to vote on a resolution to approve the dissolution of the corporation. Once the board has approved dissolution, the matter can then be submitted to the shareholders for their approval.
In turn, after paying off debts, a dissolving 501(c)(3) organization must distribute its remaining assets for tax-exempt purposes. In practice, this usually means distributing assets to one or more other 501(c)(3) organizations.
As required by law, a nonprofit organization that is ceasing existence is required to transfer all remaining assets to another tax-exempt organization or to the government. It is unlawful to give any property away to individuals including board members, volunteers, staff, or beneficiaries.
Dissolution Clause: The dissolution clause is a statement that explains what said organization will do with its assets in the event that the organization dissolves. This clause is particularly important given that the assets of a nonprofit are not owned by any person or group.
Under most state rules, you start by holding a meeting of the board of directors to vote on a resolution to approve the dissolution of the corporation. Once the board has approved dissolution, the matter can then be submitted to the shareholders for their approval.

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