The Illinois General Not For Profit Corporation Act of 1986, specifically Section 105.15, addresses the dissolution of a nonprofit corporation. When a corporation has been dissolved by proclamation of the Secretary of State for failing to file its annual report or pay franchise taxes, the Act provides a specific procedure for reinstatement. The Act states that such a corporation may be reinstated at any time within five years after the effective date of dissolution by filing with the Secretary of State an application for reinstatement, accompanied by payment of all delinquent annual reports and franchise taxes, plus any penalties and fees that may be prescribed by the Secretary of State. Therefore, the correct timeframe for reinstatement after dissolution by proclamation is five years. This provision ensures that organizations have a reasonable period to rectify their administrative failures and resume their operations, thereby promoting the continued vitality of the nonprofit sector in Illinois. The process is designed to be administrative rather than requiring a judicial proceeding for this specific type of dissolution, distinguishing it from voluntary dissolutions or those initiated by the state for more serious infractions.

The Illinois General Not For Profit Corporation Act of 1986, specifically Section 105.35, addresses the procedure for a not-for-profit corporation to dissolve voluntarily. This process involves several key steps to ensure proper winding up of affairs and distribution of assets. First, a resolution to dissolve must be adopted by the board of directors. This resolution then requires approval by a majority of the members entitled to vote thereon, or if there are no members or no provision for voting by members, by a majority of the directors. Following member or director approval, a Certificate of Dissolution must be filed with the Illinois Secretary of State. This certificate must include specific information such as the corporation’s name, the date the dissolution resolution was adopted, and a statement that the resolution was adopted in accordance with the Act. The Act also mandates that the corporation cease conducting its activities except as necessary for winding up, settle its affairs, collect its assets, and pay its debts and obligations. Any remaining assets must be distributed in accordance with the corporation’s articles of incorporation or bylaws, or if not specified, to a designated tax-exempt organization. The filing of the Certificate of Dissolution is a critical step that officially marks the commencement of the dissolution process under state law.

The Illinois General Not For Profit Corporation Act of 1986, specifically Section 105.10, addresses the dissolution of a nonprofit corporation. When a nonprofit corporation’s existence is terminated by the filing of a certificate of dissolution, or by a decree of dissolution, its assets must be distributed. The Act mandates that after paying or making provision for all liabilities and obligations of the corporation, the remaining assets shall be distributed to one or more domestic or foreign corporations or organizations formed for purposes similar to those of the dissolved corporation, or to any other person or persons as the circuit court of the county in which the corporation’s principal office is located shall direct. This ensures that the charitable or public purpose for which the corporation was established continues to be served, preventing the private inurement of assets. The court’s role in directing the distribution is crucial when the corporation’s own bylaws or dissolution plan do not clearly specify a recipient for the remaining assets, or when there is a dispute among potential beneficiaries. The primary goal is to ensure that assets are used for charitable or public benefit, consistent with the original mission of the dissolved entity. This process is often referred to as a “cy pres” doctrine application, although the Illinois Act provides a specific statutory framework for such distributions.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.55 regarding the dissolution of a not-for-profit corporation, outlines the procedures for winding up affairs. When a corporation voluntarily dissolves, its board of directors is responsible for overseeing the process. This includes ceasing all business operations except those necessary to wind up the corporation’s affairs. The board must also collect its assets, pay or make provision for all its liabilities, and distribute any remaining assets in accordance with the Act. Section 105.55(d) mandates that if the corporation has been dissolved by a decree of a court, the court shall have the power to supervise the dissolution proceedings. However, for a voluntary dissolution initiated by the corporation itself, the primary responsibility for managing the distribution of assets after satisfying liabilities rests with the board of directors. The Act does not require a court order for the distribution of assets in a voluntary dissolution, provided all debts and liabilities are addressed. The distribution of remaining assets must be made to entities designated in the articles of incorporation or bylaws, or if not specified, to other organizations that are exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, or to a public library, museum, or university. The board’s role is to ensure this distribution is carried out legally and ethically, fulfilling the corporation’s charitable purpose.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.25 (Dissolution by Decree of Court), outlines the grounds upon which a court may dissolve a not-for-profit corporation. One such ground is that the corporation has procured its articles of incorporation through fraud. This means that if the initial application to form the corporation contained knowingly false statements or misrepresentations intended to deceive the state, a court can order its dissolution. Another ground is that the corporation has exceeded or abused the authority conferred upon it by law, which could encompass engaging in activities outside its stated purpose or violating statutory provisions. The Act also permits dissolution if the corporation has failed to elect directors within a specified period or has failed to hold annual meetings. Furthermore, if a corporation has been found to be insolvent and unable to pay its debts as they accrue in the usual course of business, a court may order its dissolution. The question probes the understanding of these statutory grounds for judicial dissolution under Illinois law, focusing on the procedural and substantive requirements that would lead a court to terminate a not-for-profit entity. The scenario presented describes a corporation that has ceased operations and failed to file required annual reports with the Illinois Secretary of State for several consecutive years, and its registered agent’s address is no longer valid. While failure to file reports and an invalid registered agent address are serious administrative issues that can lead to administrative dissolution by the Secretary of State, they are not explicitly listed as direct grounds for *judicial* dissolution under Section 105.25 of the Act, which typically requires a more substantive legal proceeding and specific allegations of misconduct or failure to meet statutory obligations that impact the corporation’s legal standing or operational integrity in a way that warrants court intervention. The scenario describes administrative failures rather than grounds for a court to intervene and dissolve the entity based on fraud, abuse of authority, or insolvency.

The Illinois General Not For Profit Corporation Act of 1986, specifically Section 105/110.05 regarding the dissolution of a nonprofit corporation, outlines the procedures for winding up affairs. When a nonprofit corporation voluntarily dissolves, it must cease conducting its activities except as necessary for winding up. The process involves the board of directors or other designated persons undertaking to settle the corporation’s affairs. This includes collecting assets, paying or providing for all liabilities and obligations of the corporation, and distributing any remaining assets in accordance with the Act. Crucially, Section 105/110.05(d) states that if the corporation has been dissolved by proclamation of the Secretary of State, the board of directors shall, within a reasonable time thereafter, distribute the remaining assets. The Act mandates that remaining assets, after satisfying all debts and liabilities, must be distributed to one or more domestic or foreign corporations or organizations that are qualified to receive assets and that are engaged in activities substantially similar to those of the dissolving corporation, or for a public purpose. This ensures that the assets continue to serve a charitable or public purpose, aligning with the original intent of the nonprofit. Failure to adhere to this distribution requirement can lead to significant legal consequences and challenges to the dissolution process.

No calculation is required for this question as it tests understanding of Illinois nonprofit law regarding the dissolution of a public benefit corporation. Under the Illinois General Not For Profit Corporation Act of 1986, specifically Section 105.45, a public benefit corporation can be dissolved by its members, directors, or incorporators. The process involves adopting a resolution for dissolution, filing articles of dissolution with the Illinois Secretary of State, and then winding up the affairs of the corporation. Winding up includes ceasing operations, collecting assets, paying liabilities, and distributing remaining assets. Crucially, if the corporation has been inactive or failed to meet statutory requirements, the Attorney General or the Secretary of State can initiate dissolution proceedings. However, the question specifies a scenario where the corporation is solvent and wishes to dissolve voluntarily. In such a case, the corporation must ensure that its remaining assets, after all debts and obligations are paid, are distributed to another qualified organization that is exempt under Section 501(c)(3) of the Internal Revenue Code, or to a governmental unit for a public purpose. This is a fundamental requirement to maintain the public benefit status and prevent private inurement. Failing to distribute assets to an appropriate recipient would violate the principles of nonprofit dissolution and could lead to legal challenges. Therefore, the distribution of assets to another Illinois public benefit corporation that also holds a 501(c)(3) status is the legally mandated and appropriate final step after all liabilities are satisfied.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.55, addresses the dissolution of a nonprofit corporation. When a nonprofit corporation is dissolved, its assets must be distributed in accordance with the provisions of its articles of incorporation or bylaws. If these documents do not specify a particular recipient for the remaining assets, or if the specified recipient is no longer in existence or capable of taking the assets, then the assets must be distributed to one or more domestic or foreign corporations or organizations that are organized and operated exclusively for charitable, religious, or educational purposes, and which are recognized as exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code. This ensures that the assets of a dissolved nonprofit continue to serve a public benefit purpose consistent with the original mission. The process involves winding up the corporation’s affairs, paying off debts and liabilities, and then distributing any remaining property. Failure to comply with these distribution requirements can lead to legal challenges and improper dissipation of assets intended for public good.

The Illinois Religious Corporations Act of 1985, specifically Section 115, governs the dissolution of religious corporations. Dissolution can be initiated by the corporation itself, through a resolution adopted by its board of trustees or directors, or by a decree of a court of competent jurisdiction. For a voluntary dissolution initiated by the corporation, the Act generally requires a resolution approved by a two-thirds vote of the members of the corporation entitled to vote, or if there are no members, by a two-thirds vote of the board of trustees or directors. The process involves filing a statement of dissolution with the Illinois Secretary of State, followed by winding up the corporation’s affairs, which includes paying debts, distributing assets to other religious or charitable organizations as specified in the articles of incorporation or by the members/directors, and then filing a final dissolution certificate. Involuntary dissolution can occur due to various reasons, such as failure to pay annual fees, fraud, or abuse of corporate powers, typically initiated by the Attorney General or the Secretary of State. The question focuses on the core requirement for voluntary dissolution by the corporation itself, which is the member or director approval threshold.

The Illinois General Not-For-Profit Corporation Act of 1986 governs the dissolution of not-for-profit corporations. When a not-for-profit corporation voluntarily dissolves, it must follow specific procedures to wind up its affairs. This process involves ceasing operations, collecting assets, paying debts and liabilities, and distributing remaining assets. Crucially, the Act mandates that any remaining assets, after all debts and liabilities have been satisfied, must be distributed to one or more domestic or foreign corporations or entities that are qualified under Section 501(c)(3) of the Internal Revenue Code, or to the federal government, a state, or a political subdivision thereof, for a public purpose. This ensures that the assets continue to serve a charitable or public purpose, aligning with the original mission of the dissolved nonprofit. Failure to adhere to this distribution requirement can lead to legal challenges and improper dissolution. Therefore, the distribution of remaining assets to another qualified 501(c)(3) organization is a mandatory step in the voluntary dissolution process under Illinois law.

The Illinois Not For Profit Corporation Act of 1986, specifically Section 105.55 regarding mergers, outlines the process and requirements for a nonprofit corporation to merge with another entity. For a merger to be effective, it requires the approval of the board of directors and the shareholders or members. The Act specifies that a plan of merger must be adopted by the board of directors, and then submitted to the members for approval. The minimum voting threshold for member approval is typically two-thirds of the votes entitled to be cast by members of each corporation, unless the articles of incorporation or bylaws prescribe a higher standard. The merger agreement must be filed with the Illinois Secretary of State, along with a certificate of merger. This filing is the formal act that makes the merger legally effective. Without the proper filing and approval process, the merger would not be legally recognized in Illinois. The concept of “substantially all” assets is relevant when one corporation is acquiring the assets of another, not necessarily in a formal merger. Dissolution is a separate process from merger. The Illinois Attorney General’s involvement is typically related to oversight of charitable assets and may be required in certain circumstances, but it is not the primary mechanism for effectuating a merger itself.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.25, outlines the requirements for the dissolution of a nonprofit corporation. For a voluntary dissolution initiated by the board of directors, the Act mandates that the board adopt a resolution recommending dissolution, which must then be submitted to the members for a vote. The voting threshold for member approval of dissolution is typically a majority of all members entitled to vote thereon, unless the articles of incorporation or bylaws specify a higher percentage. Following member approval, the corporation must file Articles of Dissolution with the Illinois Secretary of State. Before filing, the corporation must cease conducting its activities, except those necessary to wind up its affairs. This winding up process involves paying or providing for all known liabilities, distributing remaining assets to one or more qualified organizations (as defined by Section 501(c)(3) of the Internal Revenue Code) or for other lawful purposes, and then filing the Articles of Dissolution. The Act also addresses situations where a corporation may be dissolved by judicial proceeding or by administrative action, but the scenario presented focuses on a voluntary dissolution initiated by the board. Therefore, the crucial step after board resolution and member approval, but before filing the final dissolution documents, is the comprehensive process of winding up the corporation’s affairs, which includes satisfying all debts and distributing assets in accordance with the Act and the corporation’s own governing documents.

The Illinois General Not-For-Profit Corporation Act of 1986 governs the formation, operation, and dissolution of not-for-profit corporations in Illinois. A key aspect of this Act relates to the rights and responsibilities of members and directors, particularly concerning fundamental corporate changes. When a not-for-profit corporation proposes to sell, lease, or exchange all or substantially all of its assets, the Act outlines specific procedures to ensure proper governance and member protection. Section 110.75 of the Act addresses this, requiring that such a disposition of assets be approved by the board of directors and then submitted to the members for approval. While a majority vote of members entitled to vote thereon is generally sufficient for approval, the Act also specifies that if the corporation has no members or no members entitled to vote on the disposition, the board of directors alone may authorize the transaction. This provision is crucial for situations where a corporation’s bylaws do not provide for members or where members have been divested of voting rights on such matters. The Act emphasizes the fiduciary duties of directors throughout such processes, ensuring that any disposition of assets is undertaken in the best interests of the corporation and its charitable mission. The approval process is designed to prevent a small group of directors from unilaterally making decisions that could significantly impact the corporation’s future operations and its ability to fulfill its stated purposes. The requirement for member approval, where applicable, provides a layer of democratic oversight.

Illinois law, specifically the Illinois Not-for-Profit Corporation Act of 1986, governs the dissolution of nonprofit corporations. When a nonprofit corporation voluntarily dissolves, it must follow a specific procedure to wind up its affairs. This process involves ceasing operations, collecting assets, paying liabilities, and distributing remaining assets. Crucially, Section 110.45 of the Act mandates that upon dissolution, after all liabilities and obligations have been paid or provided for, any remaining assets must be distributed to one or more domestic or foreign corporations or not-for-profit corporations or organizations, contributions to which are deductible for federal income tax purposes. This ensures that the assets of the dissolved nonprofit are used for purposes consistent with its original charitable or public benefit mission. Therefore, distributing assets to a for-profit entity, even if it offers similar services, is not permissible under Illinois law during voluntary dissolution, as the primary intent of this distribution clause is to continue the public benefit mission through another qualified entity.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.35, addresses the dissolution of a nonprofit corporation. When a nonprofit corporation is dissolved, its assets must be distributed for exempt purposes. This means that any remaining property or funds after paying debts and liabilities cannot be distributed to members, directors, or officers. Instead, these assets must be transferred to another organization that is exempt under Section 501(c)(3) of the Internal Revenue Code or to a governmental entity for a public purpose. This principle ensures that the charitable or public benefit purpose for which the nonprofit was established continues to be served even after its dissolution. Failure to adhere to this provision can lead to legal challenges and the potential loss of tax-exempt status for any successor entity receiving the assets improperly. The Act aims to prevent private inurement of assets that were dedicated to public service.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.25 regarding annual reports, mandates that each domestic or foreign corporation subject to the Act shall file an annual report with the Secretary of State. This report is due within sixty days after the anniversary date of the filing of its articles of incorporation. The annual report must contain specific information, including the corporation’s name, the address of its principal office, the names and addresses of its directors and principal officers, and a statement of the aggregate amount of compensation paid to its directors and principal officers. Failure to file this annual report can lead to administrative dissolution by the Secretary of State. The requirement to file is a continuous obligation for active corporations. The Act also specifies that the annual report serves as a mechanism for the state to maintain current information about the organization’s governance and operational leadership, ensuring transparency and accountability. The anniversary date for filing is the specific date in a given year that corresponds to the date the corporation’s initial articles of incorporation were filed.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically addressing the dissolution of a nonprofit corporation, outlines the procedures for winding up affairs. When a nonprofit corporation is dissolved, its assets must be distributed according to the Act. Section 107.65 of the Act, titled “Distribution of assets,” mandates that after paying or making provision for all liabilities and obligations, any remaining assets shall be distributed to one or more domestic or foreign corporations or not-for-profit corporations, or other organizations engaged in activities substantially similar to those of the dissolving corporation, or for charitable purposes, as the corporation’s articles of incorporation or bylaws may direct. If the articles of incorporation or bylaws do not specify a recipient, the Act provides that the assets shall be distributed to such one or more domestic or foreign corporations or not-for-profit corporations, or other organizations engaged in activities substantially similar to those of the dissolving corporation, or for charitable purposes, as the circuit court shall determine. This ensures that the assets are used for purposes consistent with the original charitable or public benefit mission of the dissolved entity, preventing private inurement.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.45 regarding dissolution, outlines the procedures for voluntary dissolution. A corporation can initiate dissolution by adopting a resolution to dissolve. This resolution must be adopted by the board of directors, and then submitted to the members for a vote. For corporations with members, the Act generally requires a two-thirds vote of the members entitled to vote thereon, unless the articles of incorporation or bylaws specify a different voting threshold. However, if the corporation has no members, or no members with voting rights, the dissolution resolution is adopted by the board of directors alone. Following the adoption of the resolution and the necessary member approval (if applicable), the corporation must file a statement of intent to dissolve with the Illinois Secretary of State. This statement triggers a process where the corporation must cease its activities except those necessary to wind up its affairs, notify creditors, collect assets, and pay liabilities. The Act mandates that after winding up, a final dissolution statement must be filed, confirming that all affairs have been settled and assets distributed according to law. The question asks about the initial step for voluntary dissolution when members exist and have voting rights. This initial step involves board approval followed by member approval, as per the statutory requirements for such corporations.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 104.10 (Distribution of assets upon dissolution), governs the distribution of assets for not-for-profit corporations in Illinois. This section mandates that after paying or making provision for all liabilities and obligations, any remaining assets shall be distributed to one or more domestic or foreign corporations or not-for-profit corporations, foundations, or trusts that are qualified to receive assets for exempt purposes, as defined in Section 501(c)(3) of the Internal Revenue Code of 1986, or the corresponding section of any future federal tax code. The corporation’s articles of incorporation or bylaws may specify a particular recipient or class of recipients. If the articles or bylaws do not specify, the board of directors must determine the recipient. The critical aspect here is that the distribution must be to an organization that itself serves a public or charitable purpose, aligning with the nonprofit’s original mission. A distribution to individual members, even if they are volunteers, is generally prohibited as it would constitute a private inurement of assets. Similarly, distributing to a for-profit entity, unless that entity is a subsidiary solely dedicated to the nonprofit’s exempt purpose and the distribution is structured appropriately, is also not permissible under the Act for residual assets. The question requires identifying the legally permissible recipient of residual assets after dissolution and satisfaction of liabilities.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.55 (formerly 105.50), addresses the requirements for a change in registered agent. A change in registered agent and/or registered office for a nonprofit corporation in Illinois necessitates filing a Statement of Change of Registered Agent and/or Registered Office with the Illinois Secretary of State. This statement must be filed within a specific timeframe after the change is effected. The Act mandates that such a filing occur no later than 30 days after the change takes effect. This ensures that the state maintains accurate records of where legal notices and official correspondence can be reliably delivered to the corporation. Failure to file within this period can lead to non-compliance and potential administrative dissolution. The registered agent is crucial for service of process, meaning that if the corporation is sued, the registered agent is the designated recipient of legal documents. Therefore, keeping this information current is a fundamental legal obligation for all Illinois nonprofit corporations. The filing itself requires specific information about the corporation, the outgoing registered agent (if applicable), the new registered agent, and the new registered office. This process is designed to maintain transparency and accountability in the state’s corporate registry.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Article 10 regarding Dissolution, outlines the procedures for winding up the affairs of a nonprofit corporation. When a nonprofit corporation voluntarily dissolves, its assets must be distributed in accordance with its articles of incorporation, bylaws, or a plan of dissolution adopted by the corporation. Crucially, any remaining assets after the satisfaction of liabilities and obligations must be distributed to one or more domestic or foreign corporations or charitable trusts that are qualified under Section 501(c)(3) of the Internal Revenue Code, or to any other organization or governmental entity that is exempt from taxation under Section 501(a) of the Internal Revenue Code. This ensures that the assets continue to be used for charitable or public purposes, preventing private inurement. In this scenario, the articles of incorporation of the “Prairie Bloom Foundation” explicitly state that upon dissolution, remaining assets are to be distributed to other organizations that qualify under Section 501(c)(3) of the Internal Revenue Code. Therefore, distributing the remaining funds to the “Midwest Environmental Alliance,” a registered 501(c)(3) organization, is the legally mandated and correct procedure under Illinois law for the dissolution of a not-for-profit corporation. The other options describe distributions that are not permissible under the Act for a dissolving nonprofit.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.15, addresses the dissolution of a nonprofit corporation. When a nonprofit corporation is dissolved, its assets, after all liabilities and obligations have been paid or adequately provided for, must be distributed to one or more domestic or foreign corporations or not-for-profit entities that are qualified under Section 501(c)(3) of the Internal Revenue Code, or to any other organization or organizations organized and operated exclusively for charitable, religious, or educational purposes. This ensures that the remaining assets continue to serve a public benefit in alignment with the original mission of the dissolved entity. Failure to comply with this provision can lead to legal challenges regarding the disposition of assets. The Act emphasizes that the distribution must be to organizations that are themselves dedicated to similar public purposes, preventing the private inurement of assets.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.45 regarding indemnification, permits a corporation to indemnify its directors, officers, employees, and agents to the fullest extent permitted by the Act. This includes indemnification against liabilities incurred in connection with the corporation’s activities, provided the individual acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation. However, the Act also specifies that a corporation shall not indemnify such an individual in respect of any claim, issue, or matter in which the individual has been adjudged liable to the corporation or has been found liable by reason of willful misconduct in the performance of their duty to the corporation. The question asks about the permissible scope of indemnification for a director found liable for gross negligence in Illinois. Gross negligence, while a serious breach of duty, is not explicitly equated with willful misconduct under the Illinois Act for the purpose of prohibiting indemnification. Therefore, a director found liable for gross negligence may still be indemnified if the corporation’s articles of incorporation or bylaws permit it, and if the specific circumstances of the gross negligence do not rise to the level of willful misconduct as defined or interpreted under Illinois law. The Act allows for indemnification against judgments, settlements, and reasonable expenses, including attorneys’ fees, so long as the statutory limitations are met. The Illinois Act does not mandate indemnification but permits it, subject to these conditions.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 104.05, addresses the requirements for annual reports. This section mandates that each domestic not-for-profit corporation shall file an annual report with the Secretary of State. The report is due on the first day of the anniversary month of its incorporation. For instance, if a corporation was incorporated on March 15th, its annual report would be due on March 1st of each subsequent year. The report must contain specific information, including the corporation’s name, the address of its registered office and registered agent in Illinois, and the names and business or residential addresses of its directors and principal officers. Failure to file the annual report can lead to administrative dissolution of the corporation by the Secretary of State. This filing requirement is crucial for maintaining the corporation’s active status and its legal standing within Illinois.

The Illinois General Not For Profit Corporation Act of 1986, specifically in relation to the dissolution of a nonprofit corporation, outlines the procedures for winding up affairs. When a nonprofit corporation voluntarily dissolves, its assets must be distributed in accordance with its articles of incorporation, bylaws, and applicable law. Section 107.60 of the Act addresses the distribution of assets upon dissolution. It mandates that assets remaining after the payment of all liabilities and obligations shall be distributed to one or more domestic or foreign corporations or organizations organized and operated exclusively for charitable, religious, eleemosynary, benevolent, educational, or similar purposes, as permitted by the corporation’s articles of incorporation and the Internal Revenue Code. This ensures that the nonprofit’s assets continue to serve a public or charitable purpose, preventing private inurement. The process involves first satisfying creditors and then distributing any surplus to organizations that align with the original mission and legal requirements. A distribution to members or directors, unless they are also qualified charitable organizations and the articles permit such distribution, would violate the spirit and letter of nonprofit law. Therefore, the distribution must be to a qualified charitable organization.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Article 10 concerning Dissolution, outlines the procedures for winding up a nonprofit corporation. Section 10.40 addresses the filing of a statement of termination of existence. Upon the dissolution of a corporation, its affairs are to be wound up and its assets distributed in accordance with the Act. A crucial step in this process is the filing of a statement of termination of existence with the Illinois Secretary of State. This filing formally concludes the corporation’s legal existence and signifies that all necessary steps for dissolution, including the liquidation of assets and satisfaction of liabilities, have been completed. Failure to file this statement means the corporation technically continues to exist in the eyes of the state, even if it has ceased operations. The Act mandates that the statement of termination of existence must be filed after all other dissolution proceedings are complete. Therefore, the correct sequence involves completing the winding up of affairs, including asset distribution and debt settlement, before filing the statement of termination.

The Illinois General Not For Profit Corporation Act of 1986, specifically Section 105/107.60, addresses the dissolution of a nonprofit corporation. When a nonprofit corporation is dissolved, its assets remaining after the payment of all liabilities and obligations must be distributed for one or more exempt purposes. This is a fundamental principle of nonprofit law, ensuring that charitable assets continue to serve charitable purposes. If the articles of incorporation specify a particular recipient or class of recipients for remaining assets upon dissolution, the distribution must adhere to those provisions. If the articles do not specify, the assets are to be distributed to one or more organizations that are themselves exempt under Section 501(c)(3) of the Internal Revenue Code, or to a governmental entity for a public purpose. This prevents private inurement and ensures that the dissolution process aligns with the nonprofit’s original mission or a closely related charitable objective. The Illinois Act, therefore, mandates a specific process for asset distribution upon dissolution, prioritizing charitable beneficiaries.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.25 (Dissolution), outlines the procedures for voluntary dissolution. For a not-for-profit corporation, a resolution to dissolve must be adopted by the board of directors and then submitted to the members for approval. The Act requires that the resolution be adopted by a majority vote of the directors present at a meeting where a quorum is present, and subsequently, by a majority vote of the members entitled to vote on the dissolution, provided that at least a majority of all members entitled to vote have voted on the resolution. This ensures that significant stakeholder consensus is achieved before the entity ceases to exist. Following member approval, the corporation must file Articles of Dissolution with the Illinois Secretary of State. The process also mandates the winding up of the corporation’s affairs, which includes ceasing operations, collecting assets, paying liabilities, and distributing remaining assets to other not-for-profit organizations as per the corporation’s bylaws or articles of incorporation, or as directed by a court if necessary. The dissolution is effective upon the filing of the Articles of Dissolution, but the corporation continues to exist for the purpose of winding up its affairs.

The Illinois General Not For Profit Corporation Act of 1986, specifically Section 105/113.40, addresses the dissolution of a nonprofit corporation. When a nonprofit corporation is dissolved, its assets remaining after the satisfaction of liabilities and expenses must be distributed for one or more exempt purposes. This means that any remaining funds or property cannot be distributed to members, directors, or officers. The Act mandates that such assets be distributed to another organization that is qualified to receive tax-deductible contributions under Section 501(c)(3) of the Internal Revenue Code, or to a governmental entity for a public purpose. This principle is fundamental to maintaining the charitable or public benefit nature of the organization even after its cessation of operations. Failure to adhere to these distribution requirements can have legal and tax implications for the directors and officers involved. The Act aims to prevent private inurement of assets that were dedicated to public or charitable purposes. Therefore, a crucial step in the dissolution process is identifying a suitable recipient for the residual assets that aligns with the original mission or serves a similar exempt purpose.

The Illinois General Not-For-Profit Corporation Act of 1986, specifically Section 105.30, outlines the requirements for the dissolution of a nonprofit corporation. For a corporation that has received contributions for a specific purpose and is dissolving, the Act mandates that any remaining assets, after satisfying all liabilities and obligations, must be distributed to another organization that is also exempt under Section 501(c)(3) of the Internal Revenue Code and whose purposes are substantially similar to those of the dissolving corporation. This ensures that the original charitable intent of the donors is honored and that the assets continue to serve a public benefit. Failure to adhere to this distribution requirement can lead to the assets being escheated to the State of Illinois. The dissolution process itself requires a resolution by the board of directors, followed by a vote of the members, and then filing the Articles of Dissolution with the Illinois Secretary of State.