---
title: "Build a dissolution and surplus checklist against the section 501(c)(3) asset dedication"
url: "https://ailawframework.com/practice/not-for-profit-charities-and-associations/build-a-winding-up-and-surplus-distribution-checklist/united-states"
type: "task_jurisdiction_version"
site: "AI Law Framework"
id: "A35-T1-R10-US"
practice_area: "Not-for-Profit, Charities & Associations"
tier: "yellow"
lawyer_review: "required"
jurisdictions: ["US"]
last_reviewed: "2026-10-22"
---

# Build a dissolution and surplus checklist against the section 501(c)(3) asset dedication

> 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.

Canonical page: https://ailawframework.com/practice/not-for-profit-charities-and-associations/build-a-winding-up-and-surplus-distribution-checklist/united-states  
Last reviewed: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

| Fact | Value |
| --- | --- |
| Practice area | [Not-for-Profit, Charities & Associations](https://ailawframework.com/practice/not-for-profit-charities-and-associations.md) |
| Human involvement | Yellow: Lawyer and AI draft together |
| 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 | United States |
| Applies to | [Build a winding-up and surplus-distribution checklist](https://ailawframework.com/practice/not-for-profit-charities-and-associations/build-a-winding-up-and-surplus-distribution-checklist.md) |

## Checking plan

- What the AI does: 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.
- Basis: Checked against the linked sources on 22 October 2026. Confirm the current instrument before reliance.

## Notes

- A distribution to members fails the example in the regulation even if the members are themselves charities, unless you have read the articles and the state law and decided otherwise. Do not assume that result.
- Restricted-fund statutes, including any uniform prudent-management statute, were not opened.

## Sources

- [26 CFR § 1.501(c)(3)-1, organisational and operational tests, including asset dedication on dissolution](https://www.law.cornell.edu/cfr/text/26/1.501(c)(3)-1) (checked 2026-10-22)
- [26 U.S.C. § 501(c)(3), private inurement and exempt purposes](https://www.law.cornell.edu/uscode/text/26/501) (checked 2026-10-22)
- [IRS, Exemption requirements for section 501(c)(3) organizations](https://www.irs.gov/charities-non-profits/charitable-organizations/exemption-requirements-501c3-organizations) (checked 2026-10-22)

## Forms and precedents for this task

| Form or precedent | Kind | AI level | Summary |
| --- | --- | --- | --- |
| [Gift fund compliance checklist for a deductible gift recipient (fund, authority or institution)](https://ailawframework.com/precedents/not-for-profit-charities-and-associations/dgr-gift-fund-compliance-checklist.md) | Checklist | Yellow | Checklist to test whether a DGR’s gift fund meets the ATO’s requirements: rules and winding-up clause, what must and must not be credited, separate records, permitted uses, multiple funds, and… |

Signed-in accounts can read the full text of each one.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*