How do I dissolve my nonprofit?

While reaching such a decision is difficult and sometimes heart wrenching, an organization may find that there simply are no alternatives other than dissolving their nonprofit corporation. Lack of funding for the organization is often the primary reason why staying in business is no longer viable. If the organization reaches the point where such a decision becomes necessary, this guide will help you follow the necessary steps to ensure that your nonprofit corporation has legally and properly dissolved its operations.

OVERVIEW OF THE DISSOLUTION PROCESS

There are five primary steps involved when dissolving a company:

1. Taking corporate action by having the board of directors vote to dissolve the corporation in accordance with the governance documents.
2. Notifying the organization’s creditors of the proposed dissolution and settling creditors' claims
3. Filing Articles of Dissolution with the State Department of Assessments and Taxation
4. Distributing the remaining business assets in accordance with the corporation’s governance documents, state, and federal regulations.
5. Filing all necessary federal, state, and local tax forms (including the final 990 with the IRS)

The documents below will discuss each step in more detail and provide templates to support you in the dissolution process.

• Complete Guide to dissolving A Maryland Nonprofit (Nonstock) Corporation
• Sample Board Resolution to Dissolve
• Sample Letter to Secretary of State’s Office
• Sample Letter to Known Creditors 
• Articles of Dissolution from SDAT website 

Back