How should a nonprofit organization distribute its assets upon dissolution?

When a nonprofit organization in North Carolina has decided to dissolve, it must follow the state’s laws and regulations to legally distribute its assets. The North Carolina Nonprofit Corporation Act (NCNCA) requires the board of directors of a nonprofit organization to make the dissolution official by filing provided paperwork with the North Carolina Secretary of State. This official dissolution begins the process of assets distribution. After the dissolution process is complete, the assets of a nonprofit organization must be distributed according to the corporation’s purposes and limitations stated in its original governing documents. If there are no limitations listed, the organization’s assets may be distributed to another North Carolina charitable organization or organizations, with a similar purpose. This information must be stated in the Articles of Dissolution filed with the Secretary of State. The board of directors of the dissolved nonprofit organization is responsible for making the final determination of the assets’ distribution. The directors are required to consider all possible roles for the assets, such as creating a trust, making a charitable gift to an eligible recipient, or disbursing to creditors. The board of directors must act within the best interest of the organization and ensure that the assets are distributed appropriately. Once the asset’s distribution is officially approved, the board of the directors must provide a statement outlining the full distribution of assets. This statement must be given to the North Carolina Secretary of State. When the dissolution process is complete, the nonprofit organization ceases to exist in North Carolina.

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How should a nonprofit organization distribute its assets upon dissolution?

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