How to Dissolve a Nonprofit Corporation in California

Find out how to go about dissolving a nonprofit corporation in your state.



Need to close down your California nonprofit corporation? Here’s a quick overview of the main steps to dissolve and wind up a 501(c)(3) nonprofit corporation under California law.

Authorizing Dissolution

To start closing your nonprofit, you will need a resolution to wind up and dissolve. With the resolution in hand, California law provides for voluntary dissolution in one of three ways:

  • by majority approval of your nonprofit’s members
  • by action of your directors followed by a vote or other consent of the members; or
  • if your nonprofit does not have members, by a vote of the directors.

Under the first method, a majority of all the nonprofit’s members must give their approval through a vote or written ballot.

Under the second method, the board generally will approve the resolution and then submit it to the members. The members then meet and vote to approve the dissolution.

Under the third method, the board alone approves the dissolution. Depending on the circumstances, this may involve unanimous consent or a majority vote.

Make sure to properly record the resolution to wind up and dissolve, the directors’ votes, and, where necessary, the members’ votes or ballots. You’ll need this information for filings with the state and the IRS.

Certificate of Election to Wind Up and Dissolve

After your nonprofit has formally decided to wind up and dissolve, you must “forthwith” file a Certificate of Election to Wind Up and Dissolve with both the Secretary of State (SOS) and the Attorney General (AG). The certificate must contain:

  • a statement that the corporation has elected to wind up and dissolve
  • if the election was made by the vote of members alone, a statement of the number of votes for the election and that the election was made by a majority of all members
  • if the election was made by the board and members, a statement that it was made by the board and the members in accordance with Section 5034 of the California Corporations Code
  • if the certificate is signed by a member or members, a statement that the signer or signers were authorized to execute the certificate by a majority of all members; and
  • if the election was made by the board alone because there are no members, a statement indicating that fact.

A form for the certificate of election to wind up and dissolve (Form ELEC NP) is available for download from the SOS website.

NOTE: If your election to dissolve is made by unanimous vote of your members, or by unanimous vote of your board if you have no members, then you do not need to file the certificate of election to wind up and dissolve.

Winding Up

After your nonprofit has formally authorized dissolution, it continues to exist only for the purpose of taking care of certain final matters that, collectively, are known as “winding up” the organization. Winding up is largely about paying off any debts and then distributing any remaining assets. Generally speaking, you can only distribute money and property after you’ve paid off all of your nonprofit’s debts. In turn, after paying off debts, a dissolving 501(c)(3) organization must distribute its remaining assets for tax-exempt purposes. In practice, this usually means distributing assets to one or more other 501(c)(3) organizations. However, other asset distribution requirements—such as returning loaned items to the lender—may also apply.

Also, when you begin winding up, you must mail written notice of the fact to all members who did not vote for dissolution, to all of your nonprofit’s known creditors and claimants, and to the AG.

If you have any specific questions about what you need to do to wind up your nonprofit, you should consult with a lawyer.

Clearance from Attorney General

Regardless of whether your nonprofit has any remaining assets after all its debts are paid, you must request a letter from the AG that that “either waives objections to the distribution of the corporation’s assets . . . or confirms that the corporation has no assets.” You must request the letter by sending the following documents to the AG:

  • a letter with information about the intended recipients of any assets (or, if no assets remain, information regarding that fact)
  • a copy of your certificate of election to wind-up and dissolve and/or a signed certificate of dissolution prepared for submission to the Secretary of State
  • copies of your nonprofit’s IRS Form 990 for the last three accounting periods; and
  • an endorsed-filed copy of your nonprofit’s articles of incorporation, including any amendments.

You can find more detailed information about obtaining the waiver, including a general guide on nonprofit dissolution, on the AG website.

Certificate of Dissolution

After you have finished winding up your nonprofit, you must file a certificate of dissolution with the Secretary of State (SOS). The certificate of dissolution must contain:

  • the name of your nonprofit
  • a statement that the nonprofit has been completely wound up and is dissolved
  • a statement that all final returns required under the California Revenue and Taxation Code have been or will be filed with the California Franchise Tax Board; and
  • a statement that the nonprofit’s known debts and liabilities have been actually paid, or adequately provided for, or paid or adequately provided for as far as the assets permit, or that the nonprofit has incurred no known debts or liabilities.

A single downloadable document containing blank forms for the certificate of dissolution (Form DISS NP), certificate of election to wind up and dissolve (Form ELEC NP), and detailed instructions, is available for download from the SOS website.

Remember that you must first submit a signed copy of the certificate of dissolution (and/or certificate of election to wind up and dissolve), along with other documents, to the AG. Then, when you have finished winding up, including properly distributing any remaining assets, you must file the original and two copies of your certificate of dissolution, and the original and two copies your waiver from the AG, to the SOS. After the SOS approves your filing, they will send you back a stamped copy of the certificate of dissolution.

Final Submission to Attorney General

To complete the closing of your nonprofit, you must mail a final dissolution packet to the AG. The packet should contain (a) a copy of the stamped certificate of dissolution you received back from the SOS; and (b) the final financial report for your nonprofit showing proper distribution of all assets resulting in a zero balance.

Federal Tax Note

For federal tax purposes, you’ll need to file IRS Form 990 or IRS Form 990-EZ. You must include a completed Schedule N (Liquidation, Termination, Dissolution, or Significant Disposition of Assets), as well as copies of your certificate of dissolution and resolution to wind up and dissolve. When completing Form 990 or Form 990-EZ, you’ll need to check the “Terminated” box in the header area on Page 1 of the return. For additional guidance, check out Every Nonprofit’s Tax Guide, by Stephen Fishman (Nolo), go to the IRS website, or consult with a tax professional.

Streamlined Dissolution Procedure for Certain Eligible Nonprofits

In certain limited circumstances, nonprofits may be eligible to dissolve using a streamlined dissolution procedure available as of January 1, 2016 in California. Only nonprofits “created in error” and in existence for 24 months or less can use the Domestic Nonprofit Corporation Short Term Certificate of Dissolution (Form DSF NP). The person filing the certificate must be able to state that:

  • the certificate of dissolution is being filed within 24 months after the corporation’s articles of incorporation were filed;
  • the corporation does not have any outstanding debts or other liabilities, other than tax liabilities, and all existing tax liabilities will be satisfied or be assumed by another individual or entity;
  • a final franchise tax return has been or will be filed with the Franchise Tax Board;
  • the known assets of the corporation remaining after paying any known debts or liabilities have been distributed as required by law; and
  • the corporation was created in error.

Additional Information

You can find additional information, such as forms, mailing addresses, phone numbers, and filing fees, on the SOS website and the AG website.

This article covers only the most basic steps of voluntary dissolution after your nonprofit has started doing business. There are many additional, more specific rules, covering things like:

  • involuntary dissolution
  • dissolution of non-typical nonprofits (for example, mutual benefit corporations)
  • giving proper advance notice of member and director meetings
  • court-supervised winding up of a nonprofit
  • what specific information needs to be included in notices to members, creditors, and the AG
  • filing final state tax returns
  • petitioning a court rather than filing a certificate of dissolution
  • how to dispose of known claims against a nonprofit through written notice; and
  • how to respond to claims against the nonprofit after dissolution.

In addition, your articles of incorporation or bylaws may contain rules that apply instead of, or along with, state law. You are strongly encouraged to consult with a lawyer to obtain additional information on these and other points.

Final Note: Dissolving and winding up your nonprofit corporation is only one piece of the process of closing your organization. For further, general guidance on many of the other steps involved, check Nolo’s 20-point checklist for closing a business and the Nolo article on what you need to know about closing a business.

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