Dealing with an Administrative Dissolution
Nonprofit Law Series
By Adrienne B. Haynes, Esq.
Managing Partner, SEED Law
The decision to start a nonprofit generally comes from a heart of service. Formalizing your efforts by officially launching your organization and scheduling regular reviews to ensure compliance is a responsible step for a nonprofit leader. When this is not handled well, it can result in an administrative dissolution, which results in no longer being able to conduct business in the State.
To remain in good standing, a nonprofit’s leadership team should prioritize timely responses to required State and Federal filings, including annual registration reports and the IRS annual information report on Form 990. Your registered agent will receive the notice and reminders, and these dates should also be calendared so that the necessary information is on hand to prepare a response. If a for profit or nonprofit corporation is or has been administratively dissolved, this can result in personal liability for organizers who continue without an entity and loss of funding.
To seek reinstatement of the entity, an application package must be compiled. This will often require information from the initial nonprofit formation and a certificate of tax clearance. This documentation is given by the Department of Revenue upon written request, and must state that the corporation has no taxes due and owing. If a corporation has tax obligations, they must be resolved before a clearance letter will be issued.
If an administrative dissolution is not rescinded, the organization will need to take the additional steps necessary to wind down. According to Missouri law, a dissolved corporate must carry on only to handle liability mitigation and asset disposition.
Running an organization or a business does not mean you have to have it all figured out. If you’re doing it well, it means you have a network of advisors that can help you with compliance, foresight, and governance. If you’re ready to put a pro team together, we have a list of who should be considered.
This article is an overview of nonprofit law considerations, including compliance considerations and does not cover every legal right or obligation, consideration, exception, or restriction. These decisions are complex and should be well researched and discussed with a professional before being made.
To schedule a consultation with a SEED Law attorney, you can give us a call at (816)945–4249 or schedule your consultation here.
Additional Resources:
Nonprofit Corporations, https://www.sos.mo.gov/business/faqs#NonprofitCorporations
(last visited April 15, 2020).
