How to Dissolve a Kansas Nonprofit Corporation

Learn how to dissolve a nonprofit company in your state.

Do you need to dissolve your Kansas nonprofit corporation? Here’s a short rundown of the essential processes involved in dissolving and winding up a 501(c)(3) nonprofit company in Kansas.

NOTE: There is no distinct law in Kansas for nonprofit businesses. Instead, Kansas’ General Corporation Law has requirements for organizations. Because the latter legislation is mainly intended for for-profit organizations, it is sometimes essential to “interpret” its provisions to apply to charities. To make things even more confusing, Kansas nonprofit companies are just one kind of nonstock company. (Unlike a regular for-profit company, a nonstock corporation does not issue capital stock.)

Dissolution Authorization

Closing begins with dissolution, and you will need a determination to dissolve to do so. With the resolution in hand, Kansas law allows for voluntary dissolution in the following ways:

the action of the governing body followed by a vote of the members; or if your organization does not have members, by a vote of the governing body.

The governing board must first pass the resolution to dissolve and then propose it to the members under the first approach. Members then gather and vote to adopt the resolution.

The resolution is approved by majority written approval using the second procedure. In such instances, no action by the governing body is required.

The governing body alone must adopt the resolution to dissolve under the third way. The resolution must typically be passed by a majority vote of the governing body.

Make careful to correctly document the resolution to dissolve, as well as the votes of the governing body, members’ votes, or written consents. This information will be required for filings with the state and the IRS.

Certificate of Divorce

You must submit a certificate of dissolution with the Secretary of State once your nonprofit has authorized dissolution (SOS). The certificate of dissolution must include the following information:

your nonprofit’s name and your Kansas business entity ID number
the names and addresses of the directors and officials of your nonprofit
the dissolution’s effective date (upon filing or up to 90 days later)
If the dissolution was authorized by member vote at a meeting, a statement that the dissolution was authorized in accordance with the provisions of Section 17-6804 of the General Corporation Law; and the signatures of those members if the dissolution was authorized by unanimous written consent of the members.

Blank certificate forms for dissolutions allowed by a member meeting and vote (Form NM 53-13) and unanimous member written approval (Form NW 53-313) may be downloaded from the SOS website. There is no state-issued form for dissolutions that are only approved by the governing body. You may also submit your application online at the SOS website. There is a $20 filing fee.

Winding Down

After your nonprofit has legally approved dissolution, it continues to exist simply to handle some last tasks known collectively as winding up the firm. Winding up is primarily concerned with paying off any obligations and then distributing any leftover assets, although additional responsibilities may be included. In general, you may distribute money and property only after you have paid off all of your nonprofit’s obligations. A dissolving 501(c)(3) organization must also disperse its residual assets for tax-exempt purposes once all obligations have been paid. In reality, this generally entails donating assets to another 501(c)(3) charity or organizations. Other distribution criteria may also apply. If you have any concerns, you should speak with a lawyer.

Note on Federal Taxation

You must submit IRS Form 990 or IRS Form 990-EZ for federal tax reasons. Schedule N (Liquidation, Termination, Dissolution, or Significant Disposition of Assets) must be completed, as well as copies of your certificate of dissolution, resolution to dissolve, and plan of distribution. When filling out Form 990 or Form 990-EZ, tick the “Terminated” box in the header section on Page 1 of the return.

Further Information

On the SOS website, you may find further information such as forms, postal addresses, phone numbers, and filing costs, as well as a link to online filing.

Litigation initiated by or against your organization prior to dissolution will not be halted. Furthermore, new legal proceedings may be initiated by or against your organization for up to three years following its dissolution.

This article only covers the most fundamental procedures of voluntary dissolution once your organization has begun operations. There are several further, more specialized regulations that address topics such as:

uninvited dissolution
dissolution prior to beginning operations
Non-typical nonprofits may be dissolved by providing adequate prior notice of member and governing body meetings and obtaining the requisite number of member or governing body votes to support dissolution.
How to expressly agree dissolution in writing without a meeting; and how to react to legal claims after dissolution.

Furthermore, your charter of incorporation or bylaws may include regulations that apply instead of or in addition to state law. You are highly advised to speak with a lawyer for further information on these and other issues.