new york how long for attorney general approval of non profit sale of assets

How does New York law protect not-for-profit corporations’ assets?

The New York State Attorney General’s Charities Bureau has prepared this guidance to assist not-for-profit corporations and the attorneys who represent them when seeking approval of the Attorney General and/or the court for sales and other dispositions of their assets, including real and/or personal property, as well as intangible property such

How to dissolve a not for profit corporation in New York?

Office of the New York State Attorney General Charities Bureau 28 Liberty Street New York, NY 10005 (212) 416-8400 ... ATTORNEY GENERAL APPROVAL OF SALE OF ASSETS 18 . APPENDIX C - CHECKLIST FOR PETITION TO ... § 12 and Not-for …

What is the New York State Attorney General’s Charities Bureau?

Role of the Attorney General The N-PCL requires that, upon filing the petition with the court, the Attorney General be given a minimum of 15 days notice before a hearing on the application. N-PCL § 511(b). The procedure preferred by the Charities Bureau and most courts, however, is to submit the petition

How do I set up a not-for-profit organization in NY?

Oct 12, 2020 · The New York Not-for-Profit Corporation Law (“NPCL”) requires that certain transactions involving the sale or transfer of assets owned by not-for-profit corporations and certain religious corporations be reviewed and approved by the Attorney General’s Charities Bureau before closing.

Can a nonprofit sell its assets?

A nonprofit corporation can buy and sell assets, similar to a profit-oriented entity. The fact that the nonprofit doesn't operate with a profit motive doesn't preclude it from signing a contract, borrowing and purchasing resources deemed operationally essential.

Do nonprofits have to release financial statements?

Yes. Nonprofit corporations must submit their financial statements, which include the salaries of directors, officers and key employees to the IRS on Form 990 as mentioned above. Both the IRS and the nonprofit corporation are required to disclose the information they provide on Form 990 to the public.Feb 16, 2018

How do I dissolve a non profit in NY?

Dissolving a New York State not-for-profit corporation requires a plan approved by the New York State Attorney General. Before you take any steps towards dissolving a New York State not-for-profit, contact the Attorney General's office to develop a dissolution plan: (212) 416-8401. [email protected] 19, 2021

Can a non profit accumulation of funds?

Under state and federal tax laws, however, as long as a nonprofit corporation is organized and operated for a recognized nonprofit purpose and has secured the proper tax exemptions, it can take in more money than it spends to conduct its activities. In other words, your nonprofit can make a profit.

How often should a nonprofit be audited?

annual auditsAs an example, the state of California requires annual audits for all nonprofit organizations in the state that have a gross income of $2 million or more.Oct 5, 2021

Are 990s public?

The IRS requires all U.S. tax-exempt nonprofits to make public their three most recent Form 990 or 990-PF annual returns (commonly called "990s") and all related supporting documents. They must also make public their Form 1023, which organizations file when they apply for tax-exempt status.

Can a 501c3 go dormant?

An organization may not primarily advance individuals' private interests, rather it must operate for the public benefit. And the nonprofit must actually operate, not lie dormant for years at a time.Apr 6, 2017

What happens to the money when a nonprofit dissolves?

Financial Actions. Once the decision has been made to dissolve, the nonprofit must stop transacting business, except to wind down its activities. The assets of a charitable nonprofit can only be used for exempt purposes. 6 This means that assets may not go to staff or board members.Nov 30, 2020

How long does it take to dissolve a corporation in New York?

We get your NY Corporation Dissolution filing to the New York Secretary of State as fast as possible. Once they get the application, the NY Secretary of State usually takes 5-7 business days to process a New York Corporation Dissolution filing.

How do you lose your non profit status?

How Your Nonprofit Could Lose Its Tax ExemptionPrivate Benefit or Inurement.Lobbying.Political Campaign Activity.4.Excess Unrelated Business Income.Not Filing an Annual 990.Failure to Pursue Original Purpose.May 24, 2020

Can non profits run a surplus?

A nonprofit can have a surplus at the end of the tax year, and although it is not usually desirable, it can sometimes be okay for a nonprofit to have a deficit.

How many bank accounts should a nonprofit have?

Instead of maintaining multiple accounts, your nonprofit should simplify by going down to one account that utilizes a variety of tools to help keep things running. Programs like QuickBooks help align your finances and track restricted and unrestricted funds.Dec 10, 2019

What is the process of petitioning for approval of a transaction?

In preparing to petition for approval of a transaction, the corporation must determine that the proposed consideration is fair and reasonable. To do so, the corporation must secure an independent appraisal of the property that is the subject of the transaction. Although the statute does not explicitly require an appraisal, court decisions have established that fair market value can best be determined by means of an appraisal, and the court and the Attorney General will generally reject the petition if it is not supported by an appraisal. A licensed appraiser who is completely independent of both buyer and seller must do the appraisal. A real estate agent or broker involved in the sale of the property may not do the appraisal. A real estate agent or broker “fair market assessment” of a property is NOT the same as an appraisal.

How long does a religious corporation have to lease?

The N-PCL requires that religious corporations seeking to sell, mortgage, lease for a term of more than five years, exchange or otherwise dispose of its property must seek approval of the Attorney General or the Supreme Court.

What is non cash consideration?

Non-cash consideration may also include, but is not limited to, anticipated future payments based on a partnership or joint venture interest. The value of any future payments, including ground lease payments, should be analyzed showing the net present value using an appropriate discount rate. Please note that anticipated future payments resulting from a joint venture or partnership arrangement are considered speculative and should not form the basis of a seller’s fair and reasonable consideration analysis.

Can proceeds be used for personal benefit?

The use of the proceeds must be consistent with the corporation’s purposes. Proceeds cannot be used for the personal benefit of a director, officer, employee, member or other interested party. All debts, costs and expenses to be paid at closing must be disclosed in the petition with supporting documentation provided as an exhibit.

Do you need attorney general approval for an option contract?

Option contracts require Attorney General or court approval at the time the option is exercised. The Charities Bureau discourages the use of option or other contingent contracts by religious corporations, especially if they may be exercised over a long term.

How long does a lease last for a areligious corporation?

The sale, mortgage or lease for a term exceeding five years of any real property of areligious corporation requires court approval pursuant to N-PCL § 511. (RCL § 12(1)).

Do you need court approval for an option contract?

Option contracts require court approval at the time the option is exercised . The CharitiesBureau discourages the use of option or other contingent contracts by not-for-profit and religiouscorporations, especially if they may be exercised over a long term.

What is the law for mergers and consolidations in New York?

Mergers and Consolidation of corporations chartered by the Regents of The University of the State of New York are governed by Education Law and Article 9 of the N-PCL (except § 907). The Attorney General does not review such consolidations.

What is the Attorney General's role in a merger?

The Attorney General is a statutory party to any proceeding seeking court approval of a merger or consolidation where any constituent corporation or the consolidated corporation is, or would be if formed under the N-PCL, a charitable not-for-profit corporation. See N-PCL § 907-a. The N-PCL provides that upon the filing of the application, the Court shall fix a time for a hearing and direct that notice be given to interested persons, including the Attorney General and any governmental body or officer whose consent or approval is required. See N-PCL §907-b (b).

How long does it take for a merger to become effective?

A merger becomes effective upon the filing of the certificate of merger by the Department of State, or on a later date, as stated in the certificate of merger, which may not be more than 30 days after such filing .

What is the first step in a merger?

The first step in a merger is adoption of a plan. The board of each corporation proposing to merge must adopt a plan of merger or consolidation which must set forth the following:

What is a merger and consolidation?

Merger and consolidation are procedures required by law when two or more corporations ("constituent" corporations) become a single corporation. In a merger, the resulting corporation, called the surviving corporation, is one of the merging corporations. In a consolidation, the resulting entity is a new corporation, called the consolidated corporation.

Can a religious corporation merge with a non-profit?

corporation formed under the Religious Corporations Law (“RCL”) may merge with a not-for-profit corporation with religious purposes. Each constituent corporation must comply with the procedures applicable to mergers of not-for-profit corporations. See "Procedure for Approval of the Merger by the Attorney General or the Court, on Notice to the Attorney General" above.

Who approves a sale of a chartable corporation in New York?

Under Section 510, as amended, the sale, lease, exchange, or other disposition of all or substantially all of the assets of a chartable corporation is to be approved by either a court (on notice to the Attorney General) or by the Attorney General.

What does the Attorney General do when approving a transaction?

The Attorney General, in approving a transaction, must find that the consideration and the terms are “fair and reasonable and that the purposes of the corporation or the interests of its members will be promoted.”.

What is NPCL Section 510?

Before the effective date of the Act, NPCL Section 510, required that the sale, lease, exchange, or other disposition of all or substantially all of the assets of a Type B or Type C NPC had to be approved by the supreme court in ...

What is NPCL article 14?

NPCL Article 14 (“Special not-for-profit corporations”), Article 15 (“Public cemetery corporations”) and Article 16 (“Land Banks”) were amended to indicate whether entities governed by those Articles will be charitable or non-charitable corporations. The Act also impacted the procedure required in many instances for a NPC to transact its real ...

How long can a religious corporation lease?

However, Chapter 555 of the Laws of 2015, effective December 11, 2015, making “clarifying amendments” to the Act, amended Religious Corporations Law Section 12 to authorize the Attorney General to allow a religious corporation to sell, mortgage or lease for a term exceeding five years any of its real property, in lieu of obtaining a court order.

What is charitable purpose?

Purposes which are charitable are those which are “charitable, educational, scientific, literary, cultural or for the prevention of cruelty to animals.”. Non-charitable corporations are entities organized to carry on “non-pecuniary purposes” including, but not limited to, purposes which are “civic, patriotic, political, social, fraternal, athletic, ...

What is the purpose of the nonprofit Act?

According to the Memorandum in support of the legislation, the purpose of the Act was “to reduce unnecessary and outdated burdens on nonprofits and to enhance nonprofit governance and oversight to prevent fraud and improve public trust.”.

Who is responsible for dissolving a not-for-profit corporation in New York?

The New York State Attorney General is responsible for the supervision of charitable organizations, including not-for-profit corporations. Dissolving a New York State not-for-profit corporation requires a plan approved by the New York State Attorney General .

Is a charitable organization tax exempt in New York?

In some cases, charitable organizations may not have been granted tax exempt status by New York State. The Tax Department is able to resolve any issues and retroactively grant the organization tax exempt status.

How much reserve fund do you need to dissolve a corporation?

A: A dissolving corporation may utilize the simplified dissolution procedure if it has no more than $25,000 in a reserve fund to pay for the costs of winding up its affairs (e.g., legal and accounting fees), including liabilities which do not exceed $10,000.

Does the Attorney General need to approve a plan of dissolution?

As opposed to the procedures for the dissolution of a corporation with assets, the Attorney General's Office does not need to review or approve the Plan of Dissolution prior to its execution for the dissolution of a corporation with no assets.

Can a dissolving corporation distribute assets to a charitable organization?

In such cases, the dissolving corporation must follow the procedures for the dissolution of a corporation with assets and obtain court approval for the distribution of its remain ing assets to a charitable organization with substantially similar activities and purposes, even if the amount to be distributed is less than $25,000. ...

Do you need to dissolve a type A corporation?

A: No. Generally, Type A corporations do not require court or Attorney General approval to dissolve and the simplified dissolution procedure is not applicable.However, dissolving Type A trade associations must get approval from the Attorney General's Antitrust Bureau. In addition, if a Type A corporation holds assets for Type B charitable purposes, or holds donor restricted funds, it must follow the procedures for an asset dissolution ( see N-PCL ' 201 (b) for descriptions of the different corporate types).

Do you have to file a dissolution certificate in New York?

A: No. However, the dissolving corporation will need to submit a filing fee made payable to the New York Department of State when it files its original endorsed Certificate of Dissolution with the New York State Department of Taxation and Finance.

Can a corporation be simplified dissolution?

A: No. A corporation must have sufficient funds to pay all liabilities, which cannot exceed $10,000, in order to do a simplified dissolution. If the dissolving corporation has arranged for the reduction and/or forgiveness of any debts and liabilities with its creditors and can thereby qualify for a simplified dissolution, it should attach a copy of any relevant agreements as exhibits to its petition. Insolvent corporations must follow the procedures for a judicial dissolution as outlined in Article 11 of the N-PCL.

Where to contact NYS Department of Taxation and Finance?

For tax exemption information contact the NYS Department of Taxation and Finance, Corporation Tax Bureau at W.A. Harriman State Campus, Albany, NY 12227 or by telephone at (518) 485-2889, as well as the U.S. Internal Revenue Service at (877) 829-5500. Next Section.

Is a not for profit corporation a charitable corporation?

Overview. A not-for-profit corporation may be formed under the Not-for-Profit Corporation Law as a “charitable corporation” or a “ non-charitable corporation” unless it may be formed under any other corporate law of New York State (See Not-for-Profit Corporation Law section 201).

Does the Division of Corporations accept American Express?

The Division of Corporations accepts MasterCard, Visa and American Express for the payment of fees. To pay for a fee using your credit card or debit card, simply complete and sign the Credit Card/Debit Card Authorization Form and submit it to the Division of Corporations with your request for service.

Is a limited partnership name distinguishable from a corporation name?

Name Availability. The Division of Corporations is required by statute to reject for use any corporate, limited partnership, or limited liability company name that is not "distinguishable" from existing names on file. The only avenue to determine whether a name is available for a corporation, limited partnership or limited liability company is ...

Can a not for profit corporation have a word?

The name of the corporation may not include a word or phrase restricted by the Not-for-Profit Corporation Law or another statute unless the Certificate of Incorporation complies with the restriction. Certain activities and purposes also require the consent or approval from another state agency prior to filing.

Is it required to request a copy of the name availability response?

Although it is not required, it is recommended that a copy of the name availability response be attached to the document you are submitting for filing. A finding that the name is available is not an approval ...