How should a nonprofit organization distribute its assets upon dissolution?

When a nonprofit organization in South Dakota dissolves, the organization must distribute its assets to another nonprofit organization with the same purpose. This is required by South Dakota law. Assets can include money, equipment, supplies, or even real estate. The first step is to notify the South Dakota Secretary of State of the organization’s plans to dissolve. This will ensure the organization is in compliance with the law. Next, the organization should look for another 501(c)(3) organization that has the same purpose as theirs. They should contact that organization to make sure that they are willing and able to accept the assets. Any assets passed along should be clearly documented and need to be approved by the board of directors. The board members should make sure that all debts have been paid before deciding how to distribute the remaining assets. This should be done in an impartial manner. Finally, the board must complete and submit Form 990 to the Secretary of State, no later than 120 days after their dissolution. Form 990 will document the distribution of assets, and is the final step in the process. By following this process, a nonprofit organization in South Dakota can dissolve and distribute their assets properly. This is an important step to ensure that the organization complies with the law and is able to support the causes it was created to help.

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How should a nonprofit organization distribute its assets upon dissolution?

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