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Who has authority to close account?

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Who has authority to close account?

I was the treasurer of a 501(c)(3) swim team that disbanded several years ago. I was just contacted by our credit union saying that the account funds are about to be turned over to the state due to inactivity, with approximately $3400 remaining. I thought the president was going to take care of closing the account and donating the funds to a charity, but apparently that has not been done. The only names on the account are myself and a former swim team president (whose whereabouts are unknown and not the one I thought was closing the account). Who has rights to these funds?

Most state nonprofit corporation laws give corporate officers and directors the right to wind up the affairs of a dissolving corporation even after it has been disbanded.  Therefore, if you were never replaced as treasurer, I would assume that you have a continuing right to sign on the account for organizational purposes.

If your group had a specific charity in mind when you disbanded the organization, I would now do what you thought the president was going to do and transfer the remaining funds to that charity and close the account.  If there was no specific charity chosen, and assuming that you don’t think the state is an appropriate charity to inherit your largesse, I would talk to the president and perhaps some others on the old board to help decide to whom you should give the funds.

Merely telling the credit union what you intend to do (or withdrawing $1 to hold in cash for the benefit of the organization) may be enough to prevent an immediate escheat to the state.  But I would recommend that you act as quickly as possible if you want to avoid giving the state funds that were supposed to go to some other organization.

Tuesday, January 21, 2014

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