Dissolving a New York Not-For-Profit Corporation Without Assets

Let’s say your organization decides to pursue a new charitable venture in New York and takes the initial step of creating a not-for-profit corporation in the state. Your organization contributes assets and the new corporation initiates its operations. Before long, though, circumstances change and your organization decides to shutter the project. Now your organization is left with a New York not-for-profit corporation that it doesn’t need, so you are tasked with the voluntary dissolution. No problem, you think. You’ll just get a tax clearance certificate from the NY Department of Taxation and Finance, submit a dissolution form to the NY Department of State for filing (with maybe a step or two in between), and then that to-do list item is checked off. Not so fast.

Dissolving a not-for-profit corporation in New York—even one without any assets—requires up to 11 steps. Many of the steps are straightforward and expected, but it is important that you understand the commitment of time necessary to finally get that receipt from the NY Department of State that the entity is officially dissolved. Even if you pursue each step promptly, it could take years.

The outlined steps, published by the NY Office of the Attorney General, serve as a helpful procedural guide and provide links to forms and citations to relevant provisions of the NYS Not-for-Profit Corporation Law. However, these supplemental considerations and tips may help expedite the process.

  1. You will need the original Certificate of Dissolution, which is sent back and forth through the mail to a few locations, so it may make sense to have the corporation’s authorized signer provide you with a few originals so that you have backups.
  2. Review Appendix F to the guidance carefully to determine whether you need additional governmental approvals (g., the NY Department of Health or the NY Public Health and Health Planning Council) to complete the dissolution. This is step 3, and the additional approvals are necessary for steps 6 and 8. Thus, a misstep at step 3 can hold up the whole process. Tip: particularly if the entity isn’t as new as suggested in the opening of the post, gather all of the paperwork related to its formation and early operation to see whether your organization sought approvals to operate from any of the departments, agencies, boards, and other bodies listed on Appendix F. If so, it’s likely you need to get their approval to dissolve.
  3. Steps 6 and 7 can and should be done at the same time. Step 6 is a filing with the NY Office of the Attorney General to have the Certificate of Dissolution (original) endorsed, while step 7 is a filing with the NY Tax Department to request a Consent to Dissolution, both of which are then sent to the NY Department of State for step 8.
  4. Get started on step 7 early and submit as soon as you have what you need. Particularly if the not-for-profit corporation has been granted tax-exempt status, the submission at step 7 to the NY Tax Department may require you to gather and prepare a substantial amount of paperwork.
  5. The NY Department of State website also has a dissolution guide that includes instructions for expediting its processing.
  6. Finally, as with any multi-step governmental process, read the instructions and the individual steps a few times, annotate the guide to keep track of your progress, and don’t forget to use the forms.

Alternatively, an experienced attorney could take care of the process for you.