How do you Legally Dissolve a Membership Organization that has been Dormant for Several Years?

QUESTION:  How do you legally dissolve a membership organization that has been dormant for several years and no longer has any active members?

ANSWER:  Unfortunately, this is a common dilemma that many nonprofits face as time marches on and leaders are unable to sustain an engaged membership base for one reason or another.  A once vibrant organization with dozens (or hundreds) of active members gradually slows down, becomes less active and, ultimately decides to formally dissolve and wind down its activities.  The governing documents (Articles of Incorporation and Bylaws) of a Virginia nonstock corporation provide that it is a membership corporation that requires a membership vote to dissolve.  You can’t have a membership vote without members.  Fortunately, the Virginia Nonstock Corporation Act (the “Act”) offers a clear answer to this dilemma.  Section 13.1-903 of the Act provides that where there are no members, or no members having voting rights, the dissolution of the corporation shall be authorized at a meeting of the board of directors upon the adoption of a resolution to dissolve by the vote of a majority of the directors in office.  Therefore, in this scenario the directors would be able take action to dissolve the corporation and wind up its affairs in the absence of members.  Problem solved.

If you have questions or could use assistance navigating nonprofit compliance, governance, or transactional matters, give Perkins Law a call.  We will be happy to assist!