By NEO Law Group
On Tuesday, April 28, at 9 am PDT / 12 pm EDT, I’ll be on Facebook Live with Nadya K. Shmavonian (Partner, SeaChange Capital Partners.) and host Andy Davis (Associate Vice President of Member Education & Outreach, BoardSource) to discuss dissolution and mergers of nonprofits resulting the COVID-19 crisis. We’ll be...
Nonprofit corporations may decide to merge for many reasons, including to better advance a common purpose or to expand the range of services offered to common beneficiaries. Generally, in a simple 2-party merger between A (the surviving corporation) and B (the merging corporation also referred to in the law...
Is it possible for a 501(c)(3) organization to change into a 501(c)(4) organization? The short answer is no (Revenue Procedure 2017-5). But it may be possible for a 501(c)(3) organization to cause the creation of a 501(c)(4) organization and subsequently dissolve, leaving only the 501(c)(4) organization. This strategy has...
On September 30, 2015, Governor Brown signed into law Assembly Bill No. 557, making amendments to the laws governing dissolution of California nonprofits. The amendments, which will become effective on January 1, 2016, essentially create two new sets of dissolution procedures for California nonprofits: an automatic dissolution process...
On May 27, 2014, California Assembly Bill No. 1529 (AB 1529), introduced by Assemblyman John Perez, was passed on the Assembly Floor. The goal of AB 1529 is to streamline the process for dissolving nonprofit corporations by creating two new dissolution processes. First, it establishes an administrative process that would...
Times are still tough for nonprofits. And many boards are grappling with the question of whether their organizations should be shut down. Here is a quick list of 10 considerations for nonprofit boards thinking about dissolving their organizations: Can we continue to advance our mission effectively and efficiently? Do...
Earlier this fall, I wrote a post about Ron Mattocks' book: Zone of Insolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength. Here are some questions and answers from the media kit associated with the book: What are three steps on (sic) organization must take immediately upon realizing they've...
I recently received a media kit from nonprofit management professional/consultant/author Ron Mattocks for his book Zone of Insolvency: How Nonprofits Avoid Hidden Liabilities and Build Financial Strength. Such a timely topic. According to Mattocks, even before the events of the past several weeks, "500,000 nonprofits operate in the zone...
The California Attorney General’s Publication CT–603 (12/06) – "General Guide for Dissolving A California Nonprofit Corporation" – outlines the basic process required by a California nonprofit corporation after its board of directors or its membership votes to cease operations but before any remaining assets are distributed: A vote by...
The well-known saying, “Honesty is the best policy,” rings especially true for nonprofit organizations and the topic of dissolution. Although a tough decision and perhaps one that many will want to avoid, it is important for organizations to (a) acknowledge in a candid and timely manner when they’ve reach...
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