Page 299 - Washington Nonprofit Handbook 2018 Edition

liabilities and obligations include all corporate debts, including, presumably, payroll,
withholding and state taxes. Withholding is particularly important to pay in a timely
manner because of the ability of the IRS to seek payment from directors personally.

Second, if the corporation holds any assets subject to a condition requiring
their return or transfer upon dissolution, then any such assets must be returned or
transferred in accordance with that condition.

Third, if the corporation holds any assets subject to limitations designating
their use only for charitable purposes, then those assets must be disposed of as
required by the donor’s instructions or transferred to another corporation, society
or organization exempt from federal taxation under section 501(e)(3) of the Code
engaged in activities similar to those of the dissolving corporation. Before
transferring any assets that fall into this category, the corporation must notify the
Office of the Attorney General by registered or certified mail, at its Olympia office,
of the proposed disposition of such assets. The notice must be mailed at least 20

days before the meeting at which the corporation plans to adopt the plan of
distribution. The corporation may not adopt a plan regarding such assets without
the approval of either the attorney general or of a court of competent jurisdiction in
an action to which the attorney general is a party. However, if the attorney general
fails to object within 20 days of the corporation’s mailing of the plan of distribution
to its office, then state law deems the Office of the Attorney General to have given
its approval.

Fourth, the corporation may distribute any of its remaining assets in
accordance with its articles of incorporation or bylaws, to the extent that those
documents provide for the distribution of assets. If the corporation’s articles of
incorporation or bylaws do not specify how assets should be distributed, then these

remaining assets are distributed according to the terms of the plan of distribution.
The plan of distribution must also meet the requirements of federal tax law.

(iv) Articles of Dissolution and Certificate of Dissolution

The final step of voluntary dissolution is filing articles of dissolution with the
Secretary of State. Until articles of dissolution are filed, the nonprofit can revoke
the dissolution process as explained in the next section. The corporation must
distribute its assets in accordance with the plan of distribution prior to filing the
articles of dissolution. The articles of dissolution must be signed by one of the
corporation’s officers and must set forth the following statutorily required
information:

WASHINGTON NONPROFIT HANDBOOK -288- 2018