NONPROFIT DISSOLUTION PLAN

TABLE OF CONTENTS

1. Organization Information
2. Reasons for Dissolution
3. Board Action
4. Member Approval (If Applicable)
5. Notification Requirements
6. Wind-Down of Operations
7. Creditor Claims and Liabilities
8. Distribution of Assets
9. Employee and Contractor Matters
10. Donor-Restricted Funds
11. State Filings
12. Federal Tax Filings
13. Dissolution Timeline
14. State-Specific Requirements
15. Sources and References

1. ORGANIZATION INFORMATION

2. REASONS FOR DISSOLUTION

☐ Mission accomplished — charitable purpose has been fulfilled

☐ Insufficient financial resources to continue operations

☐ Board determination that dissolution is in the best interest of the organization

☐ Merger with another organization (dissolution of non-surviving entity)

☐ Loss of tax-exempt status

☐ Court order

☐ Other: [________________________________________]

Narrative Explanation:

[________________________________________]
[________________________________________]

3. BOARD ACTION

3.1 — Resolution to Dissolve.

☐ Board of Directors adopted a resolution to dissolve on [__/__/____]

☐ Quorum present: [____] of [____] directors

☐ Vote: [____] in favor, [____] opposed, [____] abstained

☐ Required vote threshold met (typically majority or supermajority per bylaws/state law)

☐ Resolution recorded in official board minutes

☐ Dissolution plan approved by the Board

3.2 — Board Duties During Dissolution. Directors continue to owe fiduciary duties (duty of care, duty of loyalty, duty of obedience) through the completion of dissolution. The Board shall:

(a) Oversee the orderly wind-down of operations;

(b) Ensure all creditors are paid or provided for;

(c) Ensure proper distribution of remaining assets; and

(d) Maintain adequate records throughout the process.

4. MEMBER APPROVAL (IF APPLICABLE)

☐ Not applicable — corporation has no members

☐ Members notified of proposed dissolution on [__/__/____]

☐ Member meeting held on [__/__/____]

☐ Required member vote obtained: [____] in favor, [____] opposed

☐ Required threshold met (typically two-thirds under RMNCA § 14.02)

5. NOTIFICATION REQUIREMENTS

5.1 — State Attorney General

☐ State AG notification required: ☐ Yes ☐ No

☐ AG notification filed on [__/__/____]

☐ AG approval required before dissolution: ☐ Yes ☐ No

☐ AG approval received on [__/__/____]

5.2 — Creditors

☐ Known creditors notified in writing by [__/__/____]

☐ Notice published in [________________________________________] newspaper for unknown creditors

☐ Claims deadline established: [__/__/____] (typically 120 days under RMNCA § 14.06)

5.3 — Donors (Restricted Gifts)

☐ Donors with active restrictions notified of dissolution and intended disposition of restricted funds

5.4 — Grantors / Funders

☐ All active grantors notified; grant obligations reviewed

☐ Unexpended grant funds identified for return or reallocation

5.5 — Government Agencies

☐ Secretary of State notified

☐ IRS notified (via final Form 990)

☐ State tax authority notified

☐ Charitable solicitation registrations terminated in each registered state

☐ Other regulatory agencies notified: [________________________________________]

6. WIND-DOWN OF OPERATIONS

6.1 — Operational Wind-Down Checklist

☐ Date operations will cease: [__/__/____]

☐ Programs and services transitioned or terminated

☐ Clients/beneficiaries notified and referred to alternative providers

☐ Contracts reviewed; termination notices sent per contract terms

☐ Leases terminated or assigned (with landlord consent)

☐ Utilities and services cancelled

☐ Insurance coverage maintained through wind-down period; tail coverage obtained if needed

☐ Website and social media updated to reflect dissolution

☐ Mail forwarding arranged

6.2 — Records Retention

☐ Corporate records retained for minimum [____] years (check state requirements)

☐ Tax records retained for minimum 7 years

☐ Designated custodian for records: [________________________________________]

7. CREDITOR CLAIMS AND LIABILITIES

7.1 — Known Liabilities:

7.2 — Claims Process. Under RMNCA § 14.06, the corporation may give notice to known creditors requiring claims to be submitted within not fewer than 120 days. Claims not submitted by the deadline may be barred.

7.3 — Priority of Payments. Assets shall be applied in the following order:

1. Costs and expenses of dissolution (legal, accounting, administrative)
2. Known and filed creditor claims
3. Provision for contingent or disputed claims
4. Distribution of remaining assets per Section 8

8. DISTRIBUTION OF ASSETS

8.1 — IRC § 501(c)(3) Requirement. Upon dissolution, all remaining assets shall be distributed for one or more exempt purposes within the meaning of IRC § 501(c)(3), or to the federal government or a state or local government for a public purpose.

8.2 — Proposed Distribution:

8.3 — Recipient Verification. Before distribution, verify each recipient:

☐ Is currently recognized as tax-exempt under IRC § 501(c)(3)

☐ Is in good standing with its state of incorporation

☐ Has a mission compatible with the dissolving organization

8.4 — Cy Pres. If the organization's specific charitable purpose cannot be fulfilled by any identified recipient, the Board shall petition the court to apply the cy pres doctrine and direct assets to an organization with the most similar charitable purpose.

9. EMPLOYEE AND CONTRACTOR MATTERS

☐ All employees notified of termination date(s)

☐ WARN Act compliance reviewed (if 100+ employees — 60-day notice required under 29 U.S.C. § 2102)

☐ Final paychecks prepared in compliance with state law

☐ Accrued vacation/PTO paid out per state law and policy

☐ COBRA notices sent to eligible employees (within 14 days of qualifying event)

☐ Final Forms W-2 prepared and distributed

☐ Independent contractor final payments made; Forms 1099 prepared

☐ Retirement plan (403(b)/401(k)) terminated or transferred per ERISA requirements

☐ Employee records retained per applicable retention schedules

10. DONOR-RESTRICTED FUNDS

☐ Inventory of all donor-restricted funds completed

☐ Restrictions reviewed: ☐ Temporarily restricted ☐ Permanently restricted (endowment)

☐ Donor consent obtained for transfer of restricted funds to recipient organization

☐ UPMIFA provisions reviewed for endowment funds (if applicable)

☐ If donor cannot be located, cy pres applied or AG consulted

11. STATE FILINGS

☐ Articles of Dissolution filed with Secretary of State on [__/__/____]

☐ Certificate of Dissolution received on [__/__/____]

☐ Final state annual report filed

☐ State tax-exempt status cancelled

☐ Charitable solicitation registrations cancelled in all registered states

☐ State business licenses cancelled

12. FEDERAL TAX FILINGS

☐ Final Form 990 (or 990-EZ / 990-N) filed — check "Final return" box in header

☐ Final Form 990 due date: [__/__/____] (15th day of 5th month after final fiscal year end)

☐ Form 990-T filed (if unrelated business income) — check "Final return" box

☐ Final employment tax returns filed (Form 941, Form 940)

☐ IRS notified of dissolution (IRS will update exempt organizations database)

☐ EIN closed (submit letter to IRS, Cincinnati, OH)

13. DISSOLUTION TIMELINE

14. STATE-SPECIFIC REQUIREMENTS

SOURCES AND REFERENCES

• IRS, "Termination of an Exempt Organization," https://www.irs.gov/charities-non-profits/termination-of-an-exempt-organization
• IRS, "Does the Organizing Document Contain the Dissolution Provision?," https://www.irs.gov/charities-non-profits/does-the-organizing-document-contain-the-dissolution-provision-required-under-section-501c3
• IRS, "The Cy Pres Doctrine," https://www.irs.gov/pub/irs-tege/eotopice81.pdf
• Wolters Kluwer, "How to Dissolve a Nonprofit Organization," https://www.wolterskluwer.com/en/expert-insights/dissolving-a-nonprofit-when-and-how-to-dissolve-a-nonprofit
• Nolo, "State Guide to Dissolving a 501(c)(3)," https://www.nolo.com/legal-encyclopedia/50-state-guide-dissolving-501c3-nonprofit-corporation
• RMNCA §§ 14.01–14.40
• California AG, "Dissolving a California Nonprofit Corporation," https://oag.ca.gov/sites/all/files/agweb/pdfs/charities/publications/dissolving.pdf