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Nonprofit Law/Dissolution of a 501c3


I am currently President of a 501c3 booster in Pennsylvania. Many members wish to dissolve and return to a club stastus. If a vote to dissolve was achieved I understand that a dissolution plan would need to be submitted to the membership, but I do not understand what steps would need to be taken with existing financial holdings? Also would another non 501c3 booster need to be formed to replace the existing booster or would be just change back?

It appears that your organization is a Pennsylvania Nonprofit Corporation.  Correct me if I am wrong.

In order to have obtained IRS exemption determination, a 501(c)(3) organization would have had to have the IRS required clauses in its Articles of Incorporation as discussed starting on page 26 at
"Organizational test" at

Some variation is allowed by the sample dissolution clause is on page 77:
---Start of Excerpt--
Sixth: Upon the dissolution of the corporation, assets shall be distributed for one or more exempt purposes within the meaning of section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Any such assets not so disposed of shall be disposed of by a Court of Competent Jurisdiction of the county in which the principal office of the corporation is then
located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes.
---End of Excerpt--

You should look at your Articles of Incorporation which might have some variation.

You may search (Control-F in Windows) on
for "5301" (without the quotes) at about 40% of the way down that page  to go to section 5301 which is the start of the Pennsylvania Statutes for Nonprofit Corporation law.  Then go down to § 5971 which is entitled, "Voluntary dissolution by members or incorporators" and read that section and the ones below as to voluntary dissolution.

The State Attorney General's Office is a source of information.  They have a brochure at
When a nonprofit organization is dissolved, the Orphans’ Court must review the dissolution and approve the distribution of the assets. (pdf page 10)

Harvey Mechanic
Attorney at Law

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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