Understanding Plan of Dissolution in NJ: A Guide for Nonprofits and LLCs

In the state of New Jersey, a plan of dissolution is a crucial legal document that describes how to dissolve a nonprofit or limited liability company (LLC). It acts as a road plan for the orderly liquidation of the entity, which includes the settlement of unpaid debts and obligations, the division of assets, the cancellation of registrations and licenses, and the end of the legal status of the entity.

You must adhere to the regulations established by the New Jersey Division of Revenue and Enterprise Services if you are a nonprofit organization in that state and have made the decision to dissolve your entity. Adopting a resolution by the board of directors declaring the nonprofit’s intention to be dissolved and approving the submission of a plan of dissolution with the state is the first step.

The following details must be included in the plan of dissolution: – A statement that all debts and obligations of the nonprofit will be paid or adequately provided for – A statement that any remaining assets will be distributed in accordance with the nonprofit’s bylaws or articles of incorporation –

– The date of the board resolution to dissolve –

– The reason for dissolution –

– The nonprofit is required to publish a notice of intent to dissolve in a newspaper with general distribution in the county where its major office is located once the plan of dissolution has been submitted to the state. The publication must appear for four weeks in a row once a week.

An LLC in New Jersey can be dissolved in a manner akin to a nonprofit. The LLC must pass a resolution of dissolution before a plan of dissolution may be submitted to the state. The following details must be included in the plan of dissolution: The information listed below includes:

– The name of the LLC and its tax identification number

– The date of the resolution to dissolve

– The reason for dissolution

– The name and address of the person who will wind up the LLC’s affairs

– A statement that all debts and obligations of the LLC will be paid or adequately provided for

– A statement that any remaining assets will be distributed in accordance with the operating agreement of the LLC

The LLC is required to publish a notice of intent to dissolve in a newspaper with general circulation in the county where its principal office is located after submitting the plan of dissolution to the state. The publication must appear for four weeks in a row once a week.

No, an LLC cancellation does not equate to an LLC dissolution. An LLC in New Jersey is dissolved if it misses two deadlines for filing its annual report and paying the requisite fees. This indicates that the LLC has been administratively disbanded by the state, not that the LLC has been legally dissolved in accordance with the state’s regulations. The procedure described above must be performed in order to dissolve an LLC properly.

No, despite their similarities, dissolution, winding up, and termination are not the same thing. The first step in winding up an entity is dissolution, which entails selling off its assets, paying off its debts, and distributing any residual assets to its owners or members. The process’s last stage, termination, involves the cancellation of the entity’s licenses and registrations as well as the end of its legal existence.

To sum up, nonprofit organizations and LLCs in New Jersey that have opted to wind up their affairs must comprehend the strategy of dissolution. These entities can make sure that their dissolution is carried out in a timely and lawful manner by adhering to the state’s rules and providing the required paperwork.