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In Georgia, a nonprofit does not cease to exist simply because it stops operating. Even when programs end and board activity slows, the organization remains a legal entity until it is formally dissolved. Failing to complete that process can leave ongoing filing obligations, unresolved liabilities, and lingering governance responsibilities in place.
Formal dissolution provides a clean legal endpoint and helps protect directors, officers, and charitable assets.
What Dissolution Means Under Georgia Law
Dissolution is the legal process that terminates a nonprofit corporation’s existence under Georgia law. It is distinct from winding down day-to-day operations. A nonprofit may stop fundraising, cancel programs, or vacate office space, but until dissolution filings are completed, the entity continues to exist.
Georgia law establishes a structured process for dissolving nonprofit corporations to ensure debts are addressed and charitable assets are handled properly.
Board Authority and Required Approvals
The decision to dissolve a nonprofit begins with its board of directors. The board must formally approve dissolution through a resolution adopted at a properly noticed meeting.
Under Georgia law, dissolution must be approved by the board of directors and, in some cases, by the organization’s voting members, depending on the nonprofit’s structure and governing documents.
Bylaws and articles of incorporation often specify voting thresholds or procedural steps that must be followed. Board minutes should clearly document the vote and authorization to proceed with dissolution.
Skipping this step or relying on informal consensus can create problems later if the dissolution is questioned.
Reviewing Governing Documents First
Before taking further action, the nonprofit should review its governing documents. Articles of incorporation and bylaws may include provisions that control how dissolution must occur and how remaining assets must be distributed.
Some nonprofits are subject to donor restrictions or program-specific obligations that affect asset transfers. Identifying these requirements early helps prevent delays and compliance issues later in the process.
Notice to the Georgia Attorney General
Notice to the Georgia Attorney General is required when the organization holds charitable assets, regardless of its size. The Attorney General’s role is to ensure those assets continue to be used for appropriate charitable purposes.
This notice is not a formality or something that only applies to nonprofits with significant assets, debts, or obligations.
Dissolutions involving charitable assets may be reviewed to confirm that asset distribution complies with donor intent and state law. Timing matters, and failure to provide required notice can delay or invalidate later filings.
Winding Down Operations and Settling Obligations
Before dissolution can be finalized, the nonprofit must wind down its affairs. This includes terminating contracts, resolving outstanding debts, and addressing any remaining operational obligations.
If the nonprofit has employees, employment-related responsibilities such as final wages or benefit matters must be addressed. Vendor accounts, leases, and service agreements should be closed or settled as part of the wind-down phase.
Distributing Remaining Assets Properly
Nonprofit assets cannot be distributed to directors, officers, or members. Remaining assets must be transferred to one or more qualified charitable organizations with purposes consistent with the dissolving nonprofit’s mission.
Restricted funds require special care. Assets subject to donor-imposed limitations must be used or transferred in accordance with those restrictions. Proper documentation of all transfers is essential for compliance and recordkeeping.
Filing Dissolution Documents With the State
Once obligations are settled and assets distributed, the nonprofit must file Articles of Dissolution with the Georgia Secretary of State. This filing formally terminates the entity’s legal existence.
Confirmation of acceptance should be retained as part of the organization’s permanent records. Without this filing, the nonprofit remains active on state records even if it has ceased all activity.
Final Federal and State Tax Filings
Dissolution also triggers final tax reporting obligations. The nonprofit must file a final IRS Form 990, clearly marked as a final return. State tax accounts and charitable registrations should also be closed as required.
Completing these filings helps ensure the organization does not continue to accrue penalties or reporting obligations after dissolution.
Post-Dissolution Record Retention
Even after dissolution, certain records should be retained. Governance documents, tax filings, financial records, and dissolution paperwork may be needed to respond to future inquiries.
Responsibility for maintaining these records should be clearly assigned to a former officer, director, or another trusted party.
Learn More About Nonprofit Dissolution Obligations in Georgia
Dissolving a nonprofit involves more than a single filing. A nonprofit attorney can help coordinate board actions, required notices, asset distribution, and final filings to ensure the process is completed correctly and defensibly.
The Law Office of Cameron Hawkins is available to assist Atlanta nonprofit directors in meeting their responsibilities. Call us at (678) 921-4225 for a consultation.
