Build a dissolution and surplus checklist against the section 501(c)(3) asset dedication
Key facts
- Human involvement
- YellowClose supervision
- How AI is used
- List what the articles and the state-law extracts in the file say happens to assets on dissolution, and who would receive them. Write no dissolution paper.
- What the lawyer must review
- You decide whether the dedication is met and you write any dissolution instrument. Treasury Regulation § 1.501(c)(3)-1(b)(4) says an organisation is not organised exclusively for exempt purposes unless its assets are dedicated to an exempt purpose. Assets are dedicated if, on dissolution, they would by a provision in the articles or by operation of law be distributed for one or more exempt purposes, or to the federal government, or to a state or local government for a public purpose, or by a court to another organisation to be used as the court judges will best accomplish the general purposes for which the dissolved organisation was organised. The test is not met if the articles or the law of the state of creation provide that assets would, on dissolution, be distributed to members or shareholders. Section 501(c)(3) also requires that no part of the net earnings inure to a private shareholder or individual. The law of the state of creation controls construction of the articles. No state dissolution statute was opened.
- Written for / version
- United States versionUSCth
Who does what
| Role | What they do |
|---|---|
| Assistance | Potential support includes extracting and organising information. Confirm the tool’s capability and permitted scope. |
| Lawyer | Set the scope, supervise the work closely, verify every part relied on, resolve omissions and exceptions, and approve the exact output. |
Checklist
- Verify the applicable jurisdiction and the version of each relevant law, rule or instrument in force at the material time.
- Confirm the output against the client’s instructions and the complete relevant source material, including omissions or contradictions.
- Resolve exceptions and record the responsible lawyer’s approval of the exact output and intended use.