There are a few steps you will need to take when dissolving or terminating your 501(c)(3) nonprofit organization, starting with a vote from your board of directors to dissolve the organization.
Before the board of directors makes the important decision to dissolve the organization, they will first need to create a "plan of dissolution."
Board members may not be aware of how to dissolve an organization, so the planning may take time. Throughout this process, it is beneficial to have the minimum number of board members required by your bylaws remain on your board to aid the dissolution process.
Much like when the nonprofit was originally formed, you will need to notify your state (typically the Attorney General's office) about your organization's change in status. Whether or not you have assets to distribute will dictate what types of forms you need to file. Each state will have different regulations regarding the filing process. For more information on your own state's regulations regarding dissolution, find your state government's web site.
Finally, you will need to also notify the IRS by filing all required documentation, including a form 990. Learn more about IRS rules regarding dissolution.
See our related Knowledge Base articles:
- Where can I find information about collaboration and other kinds of strategic alliances?
- How do I learn about dissolving a private foundation?
Dissolving a Nonprofit Corporation
National Council of Nonprofits
Breaks down the steps you can take to ensure that the process of winding down your nonprofit is as smooth as possible.
Nonprofit Decline and Dissolution Report
Fieldstone Alliance
This report sheds light on an important, and yet poorly understood potential phase of an organization's life cycle-going out of business. NOTE: This is an archived PDF version of the original page.
Tax Form for Dissolution of a Nonprofit
IRS
IRS form 990, Schedule N: Liquidation, Termination, Dissolution, or Significant Disposition of Assets
Facts About Terminating or Merging Your Exempt Organization
IRS Publication 4779
Most tax-exempt organizations that end their operations, either through shutting down, transferring their assets or merging with another tax-exempt organization, must inform the IRS about the details of the action.