In Maryland, dissolving a nonprofit organization can be a difficult procedure with several steps. Typically, nonprofit organizations are founded to support a particular cause or community, but occasionally, they may need to be disbanded for a variety of reasons, such as a lack of money, poor management, or the accomplishment of its objective. Here is what you need to know if you’re thinking of closing your nonprofit organization in Maryland. Check your organization’s bylaws and articles of incorporation to discover whether there are any provisions about dissolution. If there are, you must adhere to them. If not, you can adhere to Maryland’s state-mandated normal dissolution procedure.
The board of directors must first convene and adopt a resolution to dissolve the organization. The reason for the dissolution, the date of the dissolution, and the allocation of any leftover assets should all be included in the resolution. The resolution should also give the organization’s officers permission to submit the required papers to the state.
The Maryland Department of Assessments and Taxation must then receive your divorce papers. The name of the organization, the date of dissolution, and a declaration that the organization has settled all of its obligations and liabilities or has made sufficient provisions for their settlement must all be included in the articles of dissolution. A copy of the board resolution authorizing the dissolution must also be included.
You must inform the Internal Revenue Service (IRS) that your organization has ceased operations after submitting the articles of dissolution. You must submit a final tax return and mark the box designating it as such. You should also include a forwarding address in case the IRS needs to contact you in the future.
The group’s remaining assets must then be distributed to either the state of Maryland or another tax-exempt organization. You must settle any unpaid liabilities and debts owed by your organization before dispersing any assets.
In conclusion, it can be a difficult procedure that needs careful planning and execution to dissolve a nonprofit organization in Maryland. To ensure a smooth and legal divorce, it’s crucial to take all the required actions and adhere to all applicable state and federal legislation. It is best to get the advice of an attorney or a tax expert who specializes in nonprofit law if you have any questions about any part of the dissolution procedure.