Page 301 - Washington Nonprofit Handbook 2018 Edition

b. Involuntary Dissolution

The Act provides that a nonprofit corporation may also be dissolved

involuntarily, either by administrative action of the Secretary of State or judicially by
the superior court.

(i) Administrative Dissolution

The privilege of operating as a nonprofit corporation carries with it certain
operating requirements, including filing requirements with the Secretary of State.
Nonprofit corporations that fail to strictly adhere to these requirements or that
cease operation without filing articles of dissolution risk being dissolved by
administrative action. Administrative dissolution may occur even where the board
of directors or members do not wish to cease operations of the corporation.

Washington law requires the Secretary of State to administratively dissolve
any corporation that:

• Has failed to file or complete its annual report within the time required
by law;

• Has failed for 30 days to appoint or maintain a registered agent in
Washington; or

• Has failed for 30 days, after change of its registered agent or
registered office, to file in the office of the Secretary of State’s Office a
statement of such change.

If any of these conditions occur, the Secretary of State mails written notice to
the corporation to provide it with an opportunity to correct the problem and avoid
dissolution. If the corporation fails to correct the problem, the Secretary of State
dissolves the corporation. A corporation that has been administratively dissolved
may apply to the Secretary of State for reinstatement as an active corporation by
bringing all of its filings up to date and by paying any back fees and a reinstatement
fee.

The possibility of administrative dissolution should provide nonprofit
corporations with substantial incentive to comply with the legal requirements of
maintaining a corporation. Small and relatively informally operated nonprofit
corporations often fail to comply with corporate filing requirements, sometimes
with serious consequences. While the Secretary of State must notify a corporation
prior to an administrative dissolution and give the corporation an opportunity to

WASHINGTON NONPROFIT HANDBOOK -290- 2018