The Montana Nonprofit Corporation Act, specifically under MCA § 35-2-1101, outlines the grounds for dissolution of a nonprofit corporation. Voluntary dissolution can be initiated by the corporation itself, typically through a resolution adopted by the board of directors and, if required by the articles of incorporation or bylaws, by the members. Involuntary dissolution, however, can be sought by various parties, including the Attorney General, in cases of fraud, abuse of authority, or if the corporation has violated state laws or its own articles of incorporation. A creditor may also petition for dissolution if their claim is reduced to judgment and execution has been returned unsatisfied, or if the corporation is insolvent and the creditor has a right to the dissolution. The question presents a scenario where a vendor has an unsatisfied judgment against a Montana nonprofit. This aligns with the statutory grounds for a creditor to petition for dissolution. Therefore, the Attorney General is not the appropriate party to initiate dissolution solely based on an unsatisfied judgment for a private debt, nor is the board of directors’ inaction a direct trigger for external dissolution unless it leads to statutory violations. The dissolution process requires a formal legal proceeding when initiated by a creditor.

The scenario describes a nonprofit corporation in Montana that wishes to amend its articles of incorporation to change its stated purpose. Montana law, specifically the Montana Nonprofit Corporation Act (MCA Title 35, Chapter 2), governs such amendments. Section 35-2-210 MCA outlines the procedure for amending articles of incorporation. For a nonprofit corporation, amendments typically require a resolution by the board of directors and approval by the members, if the articles or bylaws grant members voting rights on such matters. The question focuses on the required approval for a fundamental change like altering the corporate purpose. While the board of directors has the authority to manage the corporation’s affairs, significant changes to the foundational documents, such as the articles of incorporation, often necessitate member approval to ensure democratic governance and protect member interests. Without specific provisions in the articles or bylaws to the contrary, or a situation where the corporation has no members, member approval is generally required for amendments that alter the corporate purpose. The act does not mandate unanimous member approval for such amendments, but rather a majority vote of members present and voting at a meeting where a quorum is present, or by written consent if permitted. Therefore, the most accurate and legally sound requirement, assuming members exist and have voting rights, is approval by the members.

The Montana Nonprofit Corporation Act, specifically under the provisions governing the dissolution of nonprofit corporations, outlines the procedures for winding up affairs. When a nonprofit corporation voluntarily dissolves, it must cease its ordinary business operations and proceed to wind up its affairs. This involves collecting its assets, paying or making provision for the payment of all liabilities, and distributing any remaining assets. Montana law, similar to many other jurisdictions, mandates that upon dissolution, any assets remaining after the satisfaction of liabilities must be distributed to one or more domestic or foreign corporations or organizations that are described in section 501(c)(3) of the Internal Revenue Code, or to the extent permitted by law, to other organizations that are eligible to receive tax-deductible contributions under the federal income tax laws. This ensures that the charitable purpose for which the nonprofit was established is continued or that its assets are applied to similar charitable endeavors. Failure to adhere to this distribution requirement can lead to legal challenges and potential reversion of assets to the state. The specific wording of the Articles of Incorporation and Bylaws may also provide further guidance on asset distribution in dissolution, but they must still comply with the statutory framework.

The scenario describes a situation where a Montana nonprofit corporation, established for charitable purposes, receives a significant bequest from a deceased donor. The bequest includes both cash and a parcel of undeveloped land. Montana law, specifically the Montana Nonprofit Corporation Act (Title 35, Chapter 2 of the Montana Code Annotated), governs the management and disposition of assets by nonprofit corporations. When a nonprofit receives assets, particularly those with restrictions attached by the donor, the board of directors has a fiduciary duty to manage these assets in accordance with the donor’s intent and the organization’s mission. If a donor imposes restrictions on the use of donated property, the nonprofit must adhere to those restrictions. The Montana Uniform Prudent Investor Act (Title 72, Chapter 61 of the MCA) also informs the board’s responsibilities regarding investment and management of assets, requiring prudence and diversification where appropriate, but donor restrictions take precedence. In this case, the donor explicitly stipulated that the land must be used for establishing a public nature preserve. Selling the land to fund general operations would violate this restriction. Therefore, the board’s primary obligation is to explore ways to fulfill the donor’s intent for the land, such as developing it as a nature preserve or potentially transferring it to another entity that can manage it as such, if the nonprofit itself cannot. The Montana Attorney General has oversight over charitable assets and would be involved if the nonprofit proposed to use the land in a manner contrary to the donor’s stated purpose. The concept of “cy pres” might be relevant if the original purpose became impossible or impracticable to fulfill, but the current situation does not suggest impossibility, only a potential deviation from the stated use. The question tests the understanding of donor restrictions and the fiduciary duties of a nonprofit board in Montana. The correct course of action is to honor the donor’s specific directive for the land.

Montana’s Nonprofit Corporation Act, specifically under MCA § 35-2-401, addresses the dissolution of nonprofit corporations. When a nonprofit corporation is dissolved, its affairs must be wound up. During the winding-up process, the corporation continues to exist for the purpose of winding up its affairs, prosecuting or defending suits, settling disputes, and distributing its assets. The Act mandates that after paying or making provision for all liabilities, any remaining assets must be distributed for one or more exempt purposes. This means assets cannot be distributed to members, directors, or officers. Instead, they must be distributed to another organization that is also exempt under Section 501(c)(3) of the Internal Revenue Code, or to a governmental entity for a public purpose, or to any other person or entity as the court may direct, provided such distribution is consistent with the corporation’s articles of incorporation and the applicable law. The process involves identifying and satisfying all known debts and liabilities. Any remaining assets are then distributed according to the corporation’s governing documents and the Nonprofit Corporation Act’s provisions for dissolution, ensuring that the charitable or public purpose for which the corporation was formed is continued or honored through the disposition of its remaining property.

Montana law, specifically the Montana Nonprofit Corporation Act (MCA Title 35, Chapter 2), governs the dissolution of nonprofit corporations. When a nonprofit corporation in Montana dissolves voluntarily, the process involves several steps to ensure that assets are distributed appropriately and creditors are satisfied. The Act outlines a specific order of priority for the distribution of assets remaining after all liabilities and obligations have been paid or provided for. This order is crucial for maintaining the integrity of nonprofit operations and ensuring that any residual assets are used for purposes consistent with the organization’s original mission or charitable intent. According to MCA § 35-2-722, the assets must be distributed to one or more recipients that are: (1) described in section 501(c)(3) of the Internal Revenue Code of 1986, as amended, or the corresponding section of any future federal tax code; or (2) organized and operated exclusively for charitable, religious, educational, scientific, or public purposes, and that are not themselves private foundations. This ensures that the remaining assets continue to serve a public or charitable purpose, preventing private inurement. The board of directors typically oversees this process, making decisions about the distribution of remaining assets in accordance with the articles of incorporation and applicable law.

Montana law, specifically the Montana Nonprofit Corporation Act (MCA Title 35, Chapter 2), governs the formation, operation, and dissolution of nonprofit corporations. A key aspect of this law concerns the rights and responsibilities of members and directors, particularly when a nonprofit corporation is dissolved. When a nonprofit corporation dissolves, its assets must be distributed in accordance with its articles of incorporation, bylaws, and applicable law. For a public benefit corporation, which is typically organized for charitable purposes, any remaining assets after the satisfaction of liabilities and obligations cannot be distributed to members, directors, or officers. Instead, these assets must be distributed to another organization that is qualified to receive tax-deductible contributions under federal law, or to a governmental entity for a public purpose. This ensures that the charitable mission for which the corporation was established is continued or that the assets are used for a similar public good. Failure to comply with these distribution requirements can lead to legal challenges and penalties.

Montana law, specifically the Montana Nonprofit Corporation Act (MCA Title 35, Chapter 2), governs the formation, operation, and dissolution of nonprofit corporations. A key aspect of this Act relates to the governance and responsibilities of the board of directors. Directors owe fiduciary duties to the corporation, which include the duty of care and the duty of loyalty. The duty of care requires directors to act with the care that a reasonably prudent person in a like position would exercise under similar circumstances. This generally means being informed, acting in good faith, and making decisions that are in the best interests of the corporation. The duty of loyalty requires directors to act in the best interests of the corporation and its members, rather than in their own personal interests or the interests of another entity. This includes avoiding conflicts of interest and not engaging in self-dealing. When a director has a personal interest in a transaction with the corporation, the transaction is generally permissible if it is fair to the corporation and the director discloses their interest and the material facts to the board or members, who then approve the transaction. Alternatively, if the transaction is fair to the corporation, it can also be approved by a majority of the disinterested directors. The question focuses on the scenario where a director is on both sides of a transaction, a common test of the duty of loyalty. In Montana, such a transaction is not automatically voidable if it meets certain fairness and disclosure standards, aligning with the general principles of corporate law designed to allow necessary business dealings while protecting the corporation from exploitation.

The scenario describes a situation where a Montana nonprofit corporation, “Big Sky Wildlife Advocates,” is considering a significant change to its mission statement. Montana law, specifically the Montana Nonprofit Corporation Act, governs such fundamental alterations. For a nonprofit to amend its articles of incorporation, which would include a mission statement, a specific corporate governance procedure must be followed. This procedure typically requires a resolution from the board of directors, followed by a vote of the members, if the corporation has members. The Montana Nonprofit Corporation Act outlines the requirements for notice, quorum, and voting thresholds for member approval of amendments. Generally, a majority of the votes cast by members present at a meeting where a quorum is present is sufficient, unless the articles or bylaws specify a higher threshold. However, if the corporation has no members, or if the articles of incorporation grant the power to amend solely to the board of directors, then only board approval is necessary. The question hinges on understanding the corporate structure of the nonprofit and the statutory requirements for amending its foundational documents. The correct path involves the board’s proposal and subsequent member ratification, assuming a membership structure and no specific delegation of amendment power solely to the board. The act requires that the amendment be adopted by the corporation’s members, if any. The specific Montana statute addressing amendments to articles of incorporation for nonprofit corporations is generally found within Title 35, Chapter 2 of the Montana Code Annotated. This section details the process, including the necessity of board approval and subsequent member approval, or a specified higher vote if the articles or bylaws dictate. The core principle is that a significant change like a mission statement amendment requires a formal, documented process that ensures appropriate corporate governance.

Montana law, specifically the Montana Nonprofit Corporation Act (MCA Title 35, Chapter 2), governs the dissolution of nonprofit corporations. When a nonprofit corporation in Montana voluntarily dissolves, it must follow a specific process to wind up its affairs. This process involves ceasing operations, notifying creditors, collecting assets, and distributing remaining assets. The key principle in asset distribution upon dissolution is that assets must be distributed for the purposes of the corporation or to other organizations that are themselves exempt under Section 501(c)(3) of the Internal Revenue Code, or to governmental units for public purposes. This ensures that the charitable or public benefit purpose for which the nonprofit was established is continued or honored. A dissolution plan is typically adopted by the board of directors and then submitted for member approval if the corporation has members. The plan details how assets will be distributed. If the articles of incorporation or bylaws do not specify a particular recipient for residual assets, the board of directors has discretion to select an organization that meets the statutory requirements. The statute aims to prevent private inurement and ensure that assets dedicated to public or charitable purposes are not diverted for private gain. Therefore, distribution to a for-profit entity or to members, unless the articles specifically allowed for member distribution and it was not a public charity, would generally be impermissible. The final step involves filing articles of dissolution with the Montana Secretary of State.

The scenario describes a nonprofit organization in Montana that has received a significant donation earmarked for a specific program. The question concerns the legal implications of diverting these funds to a different, albeit related, program due to unforeseen circumstances. Montana law, specifically the Montana Nonprofit Corporation Act (Title 35, Chapter 2 of the Montana Code Annotated), governs the operations of nonprofit corporations. When a donation is restricted for a particular purpose, the nonprofit has a fiduciary duty to adhere to those restrictions. If circumstances make the original purpose impossible or impracticable, the nonprofit must seek court approval or the donor’s consent to redirect the funds. This process is often referred to as “cy pres” in trust law, and similar principles apply to restricted gifts for nonprofits. Failure to do so can lead to breach of fiduciary duty claims, potential loss of tax-exempt status, and damage to the organization’s reputation. The key legal principle is the sanctity of donor intent for restricted gifts. Without explicit authorization from the donor or a court order, the funds must remain dedicated to the original purpose. The Montana Attorney General also has oversight responsibilities regarding charitable assets.

The Montana Nonprofit Corporation Act, specifically under provisions concerning the dissolution of nonprofit corporations, outlines the procedures for winding up affairs. When a nonprofit corporation’s existence is terminated, either voluntarily or involuntarily, its assets must be distributed in accordance with its articles of incorporation, bylaws, and applicable Montana law. For a public benefit corporation, or any nonprofit corporation that has received tax-exempt status from the IRS, any remaining assets after the payment of debts and liabilities cannot be distributed to its members, directors, or officers. Instead, these assets must be distributed to one or more qualified organizations engaged in activities similar to those of the dissolving corporation, or to any other organization designated by a court, provided that organization is also exempt under Section 501(c)(3) of the Internal Revenue Code or a similar provision. This ensures that the charitable or public purposes for which the corporation was formed are continued. The process involves a formal dissolution plan, approval by the board of directors and, often, by the members, and filing the necessary documents with the Montana Secretary of State. The distribution of assets is a critical final step in the winding-up process, safeguarding the public interest and the integrity of tax-exempt status.

The Montana Nonprofit Corporation Act, specifically under provisions related to mergers and consolidations, outlines the procedural requirements for such transactions. When a Montana nonprofit corporation proposes to merge with a foreign nonprofit corporation, the Act mandates that the surviving entity must be a Montana nonprofit corporation. This is achieved by the foreign nonprofit corporation domesticating into Montana. The process involves the foreign corporation filing articles of domestication with the Montana Secretary of State. These articles must contain specific information, including the name of the foreign corporation, the jurisdiction under which it was originally incorporated, the name of the surviving Montana nonprofit corporation, and a statement that the foreign corporation agrees to be governed by the Montana Nonprofit Corporation Act. Furthermore, the merger plan itself must be approved by the members or directors of both corporations according to their respective governing documents and applicable law. The Montana Secretary of State then issues a certificate of merger upon filing the necessary documents, signifying the legal completion of the transaction and the survival of the Montana entity.

Montana law, specifically the Montana Nonprofit Corporation Act (MCA Title 35, Chapter 2), governs the formation, operation, and dissolution of nonprofit corporations within the state. A key aspect of this law concerns the proper distribution of assets upon dissolution. When a nonprofit corporation dissolves, its assets must be distributed in accordance with its articles of incorporation, bylaws, and applicable law. For public benefit or mutual benefit corporations, the law mandates that remaining assets, after paying debts and liabilities, must be distributed to one or more qualified organizations engaged in activities similar to those of the dissolving corporation, or to governmental entities for public purposes. This ensures that the charitable or public purpose for which the corporation was established continues to be served. Assets cannot be distributed to members, directors, or officers, except as repayment of reasonable compensation for services rendered or as a distribution of assets in conformity with the corporation’s purposes. Therefore, a nonprofit organization’s board of directors, when faced with dissolution, must identify and transfer remaining assets to entities that align with its original mission and are recognized as tax-exempt under federal law (e.g., 501(c)(3) organizations) or serve a public purpose as defined by Montana statutes.

The scenario describes a situation where a Montana nonprofit corporation, “Big Sky Conservation Alliance,” intends to engage in a substantial real estate transaction, specifically the sale of a significant portion of its undeveloped land. Montana law, particularly the Montana Nonprofit Corporation Act, governs such actions by nonprofit entities. A key provision within this act addresses fundamental corporate changes and the disposition of substantially all assets. When a nonprofit corporation plans to sell, lease, exchange, or otherwise dispose of all, or substantially all, of its property and assets, the Montana Nonprofit Corporation Act requires a specific procedure to be followed to ensure proper corporate governance and protection of member or stakeholder interests. This procedure typically involves a resolution by the board of directors approving the transaction and, importantly, approval by the members or, if there are no members, by a designated body or as otherwise provided in the articles of incorporation or bylaws. The act emphasizes that such a significant disposition cannot be undertaken without adequate member or governing body consent, thereby preventing unilateral decisions by the board that could fundamentally alter the organization’s purpose or operational capacity. The Montana Nonprofit Corporation Act, specifically under provisions related to fundamental corporate changes and asset dispositions, mandates that a sale of substantially all assets requires a resolution approved by the board of directors and then submission to the members for their approval, often requiring a supermajority vote, or if no members exist, by the persons entitled to vote on such matters. The act aims to ensure that major corporate decisions impacting the organization’s core assets are made with broad consensus.

The scenario describes a situation where a Montana nonprofit corporation, established for charitable purposes, is considering a significant deviation from its stated mission by engaging in a for-profit venture that is not substantially related to its exempt purpose. Montana law, specifically the Montana Nonprofit Corporation Act (Title 35, Chapter 2 of the Montana Code Annotated), and federal tax law (Internal Revenue Code Section 501(c)(3)) govern the operations and tax-exempt status of such organizations. A key principle for maintaining tax-exempt status is that the organization’s activities must be primarily in furtherance of its exempt purpose. Engaging in a business activity that is unrelated to the charitable mission can jeopardize this status. If the for-profit venture becomes the primary activity or generates substantial income that is not reinvested in the charitable mission, it could lead to the loss of tax-exempt status and the imposition of unrelated business income tax (UBIT). While nonprofits can engage in some commercial activities, these must be incidental to and in furtherance of their exempt purpose. The proposed venture, as described, appears to be a substantial departure. Therefore, the most prudent course of action for the nonprofit’s board is to seek formal legal counsel to understand the implications and ensure compliance with both state and federal regulations before proceeding. This ensures that any decision made is informed by legal expertise regarding the preservation of the organization’s charitable purpose and tax-exempt status.

The Montana Nonprofit Corporation Act, specifically under provisions related to dissolution, outlines the procedures for winding up the affairs of a nonprofit corporation. When a nonprofit corporation dissolves, its assets must be distributed in accordance with its articles of incorporation, bylaws, or by court order. Crucially, any remaining assets after satisfying liabilities and obligations cannot be distributed to members, directors, or officers. Instead, these residual assets must be distributed to one or more qualified organizations engaged in activities similar or related to the purposes of the dissolving corporation, or to a governmental entity for a public purpose. This ensures that the charitable or public benefit purpose for which the nonprofit was established continues to be served, even after its dissolution. The act aims to prevent private inurement of assets that were dedicated to public or charitable endeavors. Therefore, a distribution to a director’s personal foundation, even if it has a charitable purpose, would be permissible only if that foundation itself is a qualified organization that aligns with the dissolving entity’s mission, and not simply because the director is associated with it. The key is the qualified status of the recipient organization and the alignment of its purposes with the dissolving entity.

Montana law, specifically the Montana Nonprofit Corporation Act, governs the formation and operation of nonprofit corporations within the state. A critical aspect of this governance involves the dissolution process. When a nonprofit corporation voluntarily dissolves, it must follow specific procedures to wind up its affairs. This includes ceasing to conduct its activities except as necessary for winding up, notifying creditors, and collecting assets. Crucially, upon dissolution, any remaining assets after satisfying liabilities and obligations must be distributed for one or more exempt purposes. This means assets cannot be distributed to the members, directors, or officers of the corporation. Instead, they must be transferred to another organization that is qualified to receive tax-deductible contributions under federal or state law, or to a public body for public purposes. The Montana Nonprofit Corporation Act, in section 35-2-730, outlines these requirements for the distribution of assets upon dissolution. The key is ensuring that the nonprofit’s assets continue to serve a public or charitable purpose, aligning with its original mission and the principles of nonprofit governance. The process is designed to prevent private inurement of assets that were dedicated to public benefit.

The scenario involves a Montana nonprofit corporation, “Big Sky Conservation Alliance,” which intends to amend its articles of incorporation to change its purpose from environmental advocacy to operating a wildlife sanctuary. Montana law, specifically the Montana Nonprofit Corporation Act (MCA Title 35, Chapter 2), governs such amendments. For a nonprofit to amend its articles of incorporation, the board of directors must first adopt a resolution recommending the amendment. Subsequently, this proposed amendment must be submitted to the members for approval. The Montana Nonprofit Corporation Act generally requires a two-thirds vote of the members present and entitled to vote at a meeting, or a greater percentage if specified in the articles or bylaws, for fundamental corporate changes like amending the articles of incorporation. The explanation of the process should focus on the statutory requirements for amending articles of incorporation in Montana for a nonprofit entity. This involves the board’s initial action and the subsequent member vote, emphasizing the quorum and voting thresholds as stipulated by state law. The question tests the understanding of corporate governance procedures for significant changes within a Montana nonprofit.

The Montana Nonprofit Corporation Act, specifically concerning the dissolution of a nonprofit corporation, outlines a process that requires a resolution by the board of directors and, in most cases, approval by the members. For a nonprofit corporation, the dissolution process generally begins with a proposal by the board of directors. This proposal must then be submitted to the members for their vote. The Montana Nonprofit Corporation Act, mirroring common nonprofit governance principles, mandates that a dissolution plan typically requires the affirmative vote of a supermajority of the members entitled to vote on the matter, often two-thirds, unless the articles of incorporation or bylaws specify a different threshold. This supermajority requirement ensures significant member consensus for such a fundamental corporate change. Following member approval, the corporation must then file articles of dissolution with the Montana Secretary of State. The dissolution process also involves winding up the corporation’s affairs, which includes ceasing operations, collecting assets, paying debts and liabilities, and distributing any remaining assets to qualified organizations as specified in the articles of incorporation or bylaws, or as determined by the members in accordance with the dissolution plan, ensuring that assets are used for charitable or other exempt purposes. The question probes the initial procedural step for initiating dissolution, which is the board’s proposal and subsequent member approval.

Montana law, specifically the Montana Nonprofit Corporation Act, addresses the dissolution of nonprofit corporations. When a nonprofit corporation’s existence is terminated, its assets must be distributed according to legal requirements. For a nonprofit corporation, the distribution of assets upon dissolution is crucial to ensure that the organization’s purpose is continued or that remaining assets benefit a similar charitable cause. Montana law dictates that after paying or making provision for all liabilities, any remaining assets must be distributed to one or more recipients that are qualified under Section 501(c)(3) of the Internal Revenue Code, or to a governmental entity for a public purpose. This ensures that the charitable nature of the organization is maintained and that assets are not distributed to private individuals or members. The specific wording of the articles of incorporation or bylaws may also guide this distribution, provided it aligns with state law and federal tax-exempt status requirements. The process involves a formal dissolution procedure, including board approval, member approval if applicable, filing dissolution documents with the Montana Secretary of State, and the orderly winding up of affairs, which includes asset distribution.

The Montana Nonprofit Corporation Act, specifically addressing the dissolution of a nonprofit corporation, outlines procedures that must be followed to formally end its existence. When a nonprofit corporation voluntarily dissolves, the process typically involves several key steps. First, the board of directors must adopt a resolution recommending dissolution, which is then submitted to the members for approval. For a corporation without members, the board’s action alone is sufficient. If there are members, the Montana Nonprofit Corporation Act generally requires approval by a majority of the votes cast by members entitled to vote on the matter, or a higher percentage if specified in the articles of incorporation or bylaws. Following member approval, the corporation must cease its activities except those necessary to wind up its affairs. This winding-up process involves collecting assets, paying debts and liabilities, and distributing remaining assets in accordance with the corporation’s articles of incorporation or bylaws, and applicable law. Montana law mandates that assets not otherwise disposed of must be distributed to one or more domestic or foreign corporations or entities qualifying as a public benefit corporation or a religious corporation, or to any other person, including a governmental entity, that is organized and operated exclusively for charitable, religious, eleemosynary, educational, or similar purposes, or for the benefit of the public. The corporation must then file articles of dissolution with the Montana Secretary of State. The crucial element for a voluntary dissolution to be legally effective is the proper adoption of a dissolution resolution by the appropriate corporate body (board or members, as applicable) and the subsequent filing of the necessary documents with the state. Without the formal adoption of a dissolution resolution by the members, as required by the Act for member-based organizations, the dissolution process is incomplete and legally invalid.

The Montana Nonprofit Corporation Act, specifically under MCA § 35-2-1111, outlines the requirements for a nonprofit corporation to dissolve voluntarily. A voluntary dissolution typically requires a resolution adopted by the board of directors and then approval by the members, if the corporation has members. The act specifies that if a corporation has members entitled to vote on dissolution, the board must adopt a resolution recommending dissolution and then submit it to the members. Approval generally requires a majority vote of all members entitled to vote on the matter, unless the articles of incorporation or bylaws require a greater proportion. If the corporation has no members or no members entitled to vote on dissolution, the dissolution is authorized by the adoption of the resolution by the board of directors. Following authorization, the corporation must file articles of dissolution with the Montana Secretary of State. The process involves winding up the corporation’s affairs, which includes notifying creditors, collecting assets, and distributing remaining assets to designated recipients, typically other nonprofit organizations with similar purposes, as stipulated in the articles of incorporation or by court order if no provision exists. The question tests the understanding of the necessary steps and approvals for a Montana nonprofit to initiate voluntary dissolution, particularly when members are involved. The correct option reflects the statutory requirement for member approval following board recommendation.

Montana law, specifically the Montana Nonprofit Corporation Act (Title 35, Chapter 2 of the Montana Code Annotated), governs the formation, operation, and dissolution of nonprofit corporations. A critical aspect of this act relates to the rights and responsibilities of directors, particularly concerning their duty of care and loyalty. The duty of care requires directors to act with the care that a reasonably prudent person in a like position would exercise under similar circumstances, and in a manner the director reasonably believes to be in the best interests of the corporation. This includes making informed decisions, conducting reasonable investigations, and attending meetings. The duty of loyalty mandates that directors act in good faith and in the best interests of the corporation, avoiding self-dealing and conflicts of interest. When a director has a personal interest in a transaction, Montana law provides a framework for validating such transactions. A contract or transaction between a nonprofit corporation and one of its directors, or a corporation in which a director has a substantial interest, is not voidable solely because the director is present at or participates in the meeting that authorizes the contract or transaction, or solely because of the director’s presence or participation in the meeting that authorizes the contract or transaction, if the material facts as to the director’s relationship or interest and to the contract or transaction are disclosed or known to the board of directors or a committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the directors who have no conflicting interest. Alternatively, if the material facts are disclosed or known to the members, and the members approve the transaction, it is also valid. The core principle is transparency and good faith, ensuring that the corporation’s interests are paramount. Therefore, a director’s personal interest does not automatically invalidate a transaction if the proper disclosure and approval processes, as outlined in the Montana Nonprofit Corporation Act, are followed.

The scenario involves a Montana nonprofit corporation, “Big Sky Conservation Alliance,” which has received a substantial bequest from a deceased donor. The bequest is designated for a specific purpose: to fund the acquisition and perpetual maintenance of a wildlife corridor in western Montana. Montana law, specifically under Title 35, Chapter 2 of the Montana Code Annotated (MCA), governs nonprofit corporations, including provisions related to property and donations. When a donor designates a specific purpose for a donation, it creates a restricted endowment or fund. The nonprofit corporation has a fiduciary duty to adhere to these restrictions. If the corporation wishes to use the funds for a different purpose, it generally requires court approval or the consent of the donor (or their legal representative, if applicable and feasible). The doctrine of cy pres, while not always explicitly codified in every state’s nonprofit statutes, is a common law principle that allows courts to redirect a charitable trust or endowment to a purpose as close as possible to the original intent when the original purpose becomes impossible or impracticable to fulfill. In Montana, MCA § 35-2-433 addresses the disposition of property upon dissolution, but the situation here is not dissolution. MCA § 35-2-414 discusses powers of a nonprofit corporation, including accepting donations, but it doesn’t override donor restrictions. The core issue is the donor’s intent and the corporation’s obligation to honor it. Without court intervention or a clear mechanism within the original gift instrument allowing for deviation, the funds must be used as specified. Therefore, the most legally sound and ethically appropriate action for the Big Sky Conservation Alliance is to seek judicial intervention to modify the restriction if the original purpose is no longer feasible, or to return the funds if such modification is not possible or permissible. Returning the funds is a last resort if the restriction cannot be altered and the purpose cannot be fulfilled. However, the question implies a desire to use the funds differently, making judicial modification the primary legal avenue.

The scenario presented involves a Montana nonprofit corporation, “Yellowstone Trails Alliance” (YTA), which has received a significant bequest. The core issue is how YTA can legally and ethically utilize these funds, given that the bequest was designated for “the preservation and enhancement of wilderness access points along the Montana-Idaho border.” Montana law, specifically the Montana Nonprofit Corporation Act, governs the operations of such entities. When a nonprofit receives a gift with specific restrictions, the board of directors has a fiduciary duty to adhere to those restrictions. If the donor’s intent is clear and lawful, the organization must use the funds accordingly. In this case, the bequest is not for a general charitable purpose but for a very specific one tied to a geographic region and a particular type of activity. The board cannot unilaterally decide to use the funds for unrelated operational expenses or other projects not aligned with the donor’s expressed wishes. Instead, they must investigate the feasibility of fulfilling the stated purpose. If the specific purpose becomes impossible or impracticable to fulfill, Montana law provides mechanisms for modifying or terminating the restriction, typically requiring court approval or the consent of the donor (if living and capable) or their representative. However, the initial obligation is to attempt to honor the restriction. Therefore, the most appropriate initial action for YTA’s board is to explore how to implement projects that directly align with preserving and enhancing wilderness access points along the specified border, leveraging the restricted funds for this purpose. This might involve trail maintenance, signage improvements, or land acquisition for access easements. The question tests the understanding of donor restrictions and the board’s duty to comply with them, as well as the legal pathways for dealing with such restrictions when direct implementation is challenging.

The Montana Nonprofit Corporation Act, specifically under MCA § 35-2-1101, outlines the grounds for judicial dissolution of a nonprofit corporation. These grounds include a failure to pay required state taxes or fees for a period of five years, a finding that the corporation procured its incorporation through fraud, or if the corporation has engaged in fraudulent, abusive, or illegal activities or has failed to fulfill its stated nonprofit purposes. The act also allows for dissolution if the corporation has fewer than the minimum number of directors required by its articles of incorporation or bylaws, or if it has failed to appoint a registered agent. In this scenario, the fact that the organization has ceased to operate and has not filed annual reports for three consecutive years, while concerning, does not automatically trigger a mandatory judicial dissolution under Montana law. The statutory grounds for dissolution are more specific and typically require a more direct violation of corporate law or a sustained period of non-compliance that goes beyond simply ceasing operations and neglecting filings for a shorter duration. The law requires a more significant breach of legal or organizational duties to warrant judicial intervention for dissolution. The provision for dissolution by the Secretary of State typically applies to administrative dissolutions for failure to file annual reports or maintain a registered agent, but judicial dissolution requires court action based on the grounds listed in the statute.

Montana law, specifically the Montana Nonprofit Corporation Act (MCA Title 35, Chapter 2), governs the formation and operation of nonprofit corporations. A key aspect of this act pertains to the dissolution of such entities. When a nonprofit corporation is dissolved, its assets must be distributed according to specific legal requirements to prevent private inurement and ensure that the charitable or public purpose for which the corporation was formed is ultimately served. The Act mandates that after all liabilities and obligations have been paid or adequately provided for, any remaining assets must be distributed to one or more “qualified organizations.” A qualified organization, in this context, is generally defined as a domestic or foreign corporation, society, association, trust, or foundation that is exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, or any other organization that the board determines is organized and operated exclusively for charitable, religious, eleemosynary, educational, or similar purposes. The distribution cannot be made to the directors, members, or officers of the dissolving corporation unless they also fit the definition of a qualified organization, which is rarely the case. This ensures that the assets are redirected to further public benefit rather than private gain. The specific process involves a resolution by the board of directors or, in certain circumstances, by the members, followed by the filing of a statement of dissolution with the Montana Secretary of State.

The scenario presented involves a Montana nonprofit corporation, “Big Sky Conservationists,” which has adopted bylaws that require a supermajority vote of two-thirds of the voting members present at a duly called meeting for any amendment to its articles of incorporation. Montana law, specifically the Montana Nonprofit Corporation Act (MCA Title 35, Chapter 2, Part 1), generally allows for the amendment of articles of incorporation by a majority vote of the board of directors and a majority vote of the members, unless the articles or bylaws specify a greater proportion. In this case, the bylaws explicitly mandate a two-thirds vote of members present at a meeting. Therefore, to amend the articles of incorporation, the nonprofit must adhere to the higher voting threshold established in its own governing documents. The question asks about the requirement for amending the articles of incorporation. The bylaws, which are a valid internal governance document for a Montana nonprofit, stipulate a two-thirds vote of members present. This internal rule supersedes a potentially lower statutory default if the articles or bylaws provide for a higher requirement. Consequently, the organization must secure a two-thirds vote of the members present at a meeting where the amendment is to be considered.

Montana law, specifically the Montana Nonprofit Corporation Act, governs the formation and operation of nonprofit entities. A key aspect of this act relates to the dissolution of a nonprofit corporation. When a nonprofit corporation dissolves, its assets must be distributed in accordance with its articles of incorporation and the applicable statutes. Montana Code Annotated (MCA) § 35-2-723 outlines the order of distribution of assets upon dissolution. This statute mandates that after paying or making provision for all liabilities, any remaining assets held by the corporation that are not restricted by its articles of incorporation or a disposition in favor of a specific person must be distributed to another nonprofit corporation or a public benefit corporation, or to the federal government, a state, or a political subdivision of a state, for a public purpose. The intent is to ensure that assets acquired for charitable or public purposes continue to serve those purposes, rather than reverting to private individuals, unless the articles specifically dictate otherwise. Therefore, if the articles of incorporation of a dissolved Montana nonprofit do not specify a particular recipient for residual assets, and the assets are not subject to a specific restriction for a particular person, the statutory default requires distribution to another qualified entity for a public purpose.