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What happens to assets of corporation if it dissolves?

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What happens to assets of corporation if it dissolves?

What happens to the assets of a nonprofit corporation if it dissolves at the end of its term of existence within the articles of incorporation. No bylaws exist to address this issue nor is it addressed in the articles. I am told that the assets revert to the State. Can this corporation be reinstated even though its original term has lapsed?

Ordinarily a corporation may amend its articles of incorporation to extend its term. If the term has already expired, it will be a matter of state law to determine whether it can be continued. If it can't continue and has been recognized as a charity, federal law requires that the charitable assets be distributed for charitable purposes. State law, however, should state specifically how to handle assets on dissolution. It is unlikely that the assets go to the state.

Sunday, February 24, 2013

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