Certificate of Election and/or Dissolution – Domestic Nonprofit Corporations
The decision to dissolve a non-profit corporation is made through an election or vote. You can do this by vote or consent of majority of the members of the board of directors in your organization. You must fill a Certificate of Election (form- ELEC NP) to dissolve the corporation along with the Certificate of dissolution (Form- DISS NP). If the decision to dissolve is made by the consent of all members or the board of directors then, only the Certificate of Dissolution is required.
Tips for Filing the Certificate of Election and/or Dissolution
1- The corporation’s chosen and legal name in the State of California should be exactly the same as mentioned in the Articles of Incorporation. You should try to avoid any errors regarding spellings or punctuations.
2- If the election to dissolve was made by all the members of your organization, if your organization has active members or by the board of director in case your organization doesn’t have any members, then the dissolution can be performed by filing only a single document i.e. the Certificate of Dissolution. The document of Certificate of Dissolution must include the statements that:
– ‘The decision to dissolve the corporation was made by a vote of all the members of the organization’
– ‘The election was made by all the directors of the corporation because it has no members’
As mentioned in the Corporations Code Section 6011(c) and 8611(c).
3- If the election to dissolve your corporation by made by less than 100% of the members approval or by less than 100% of the directors approval then you need to file two documents; The Certificate of Dissolution and The Certificate of Election to Wind Up. This is mentioned in the Corporations Code Section 6611, 6615, 8611 and 8615.
4- Both the Certificate of Election to Wind Up and the Certificate of Dissolution must be verified and signed by the appropriate officers in your organization, be sure that the date is mentioned of the day of signing. Failure to comply can result in penalty under perjury. It should include the statement:
-‘The matters set forth in this certificate (mention the certificate name), are verified and correct and in our knowledge’
Be careful not to post-date the certificates.
5- You should be sure that there is no marking around the signature line signifying the corporation name or influence; rather it should be signed by the appropriate officers.
6- The Certificate of Dissolution must be signed by majority of the directors or by the sole director.
7- The Certificate of Dissolution must include the complete information about the disposition of the corporation debts and liabilities. The certificate must state if the:
– ‘Corporation’s debts and liabilities have been paid’
– ‘Corporation never incurred any debts or liabilities’
– ‘Corporation’s known debt and liabilities have been provided for’
If your corporation did incur any debts or liabilities for which someone provided, the certificate must include:
– What provision has been made
– Name and address of the corporation or agency who made the provision
– All information necessary for the creditor to claim payment of the debt
8- The Certificate of Dissolution must include the statement that ‘The Corporation is dissolved’
9- In case the corporation is a mutual benefit organization, the Certificate of Dissolution must mention have a statement enclosed, including the distribution of assets as applicable.
10- If the dissolving corporation is a public benefit or religious corporation then the certificate of dissolution must include a letter by the Attorney General that waives the objection to the distribution of the company’s assets.
Be sure all the documents are properly verified, signed and up to date to avoid facing a filing rejection or a perjury penalty.