In North Dakota, when a nonprofit corporation proposes to sell, lease, exchange, or otherwise dispose of all or substantially all of its property and assets, specific procedures must be followed to ensure the action is in the best interest of the organization and its members. This typically requires approval from the board of directors and then a vote by the members. The North Dakota Century Code, specifically provisions related to nonprofit corporations, outlines these requirements. For a sale of substantially all assets, the board of directors must adopt a resolution recommending the transaction and that it be submitted to the members for consideration. Subsequently, the members must approve the transaction by an affirmative vote of at least two-thirds of the votes cast by members entitled to vote thereon at a meeting of members duly called for that purpose. This high threshold ensures significant member consensus for such a fundamental change in the organization’s operational capacity. The notice for such a meeting must also clearly state the purpose of the meeting, including the proposed disposition of assets, allowing members to make an informed decision. Failure to adhere to these procedural requirements can render the transaction invalid.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. When a nonprofit corporation dissolves, its assets must be distributed for charitable purposes. North Dakota law requires that any remaining assets, after paying debts and liabilities, must be distributed to one or more organizations that are 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, organization, or entity that is organized and operated exclusively for charitable purposes. This ensures that the assets continue to serve the public good for which the nonprofit was established, aligning with the principles of charitable trusts and the cy pres doctrine, although North Dakota law directly mandates this distribution without explicitly requiring a court to apply cy pres in every dissolution scenario. The key is the dedication of assets to a charitable purpose, preventing private inurement. The specific wording in North Dakota law emphasizes distribution to 501(c)(3) organizations or governmental entities for public purposes, or other charitable entities, to fulfill the dissolution requirements.

The North Dakota Century Code outlines specific requirements for nonprofit corporations regarding the distribution of assets upon dissolution. Specifically, North Dakota Century Code Section 10-33-107 governs the disposition of assets after dissolution. This section mandates that after paying or making provision for the payment of all liabilities of the nonprofit corporation, any remaining assets must be distributed for one or more exempt purposes specified in the articles of incorporation or bylaws. If the articles or bylaws do not specify such purposes, the assets must be distributed to a person, including a governmental entity, that is engaged in a charitable purpose. This ensures that the assets of a dissolved nonprofit continue to serve a public benefit, aligning with the underlying principles of nonprofit status.

The scenario describes a situation where a North Dakota nonprofit corporation, “Prairie Roots Foundation,” is considering merging with another North Dakota nonprofit, “Dakota Stewardship Alliance.” Both organizations are incorporated under North Dakota law. For a merger to be legally effective in North Dakota, specific statutory procedures must be followed. North Dakota Century Code (NDCC) Chapter 10-33 governs nonprofit corporations. Section 10-33-47 of the NDCC outlines the procedure for mergers. This section mandates that a plan of merger must be adopted by the board of directors of each merging corporation and then approved by the members of each corporation. The plan must contain essential information, including the names of the corporations, the terms and conditions of the merger, and the manner of converting memberships or other interests. Following approval, articles of merger must be filed with the North Dakota Secretary of State. The law requires that notice of the proposed merger be given to members, and that the members vote on the plan. While specific notice periods and voting thresholds can be set forth in the corporation’s bylaws, the statutory framework requires both board and member approval. Therefore, the most accurate and legally sound initial step after board approval of the merger plan is to submit it to the members for their vote, as required by NDCC 10-33-47. The question asks about the *next* step after the boards of both organizations have approved the merger plan. The law requires member approval for a merger.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. When a nonprofit corporation in North Dakota wishes to dissolve voluntarily, it must follow a specific procedural pathway. This process involves the board of directors adopting a resolution recommending dissolution, which then must be submitted to the members for approval. For a vote to be effective, a quorum of members must be present, and the dissolution must be approved by a majority of the votes cast by members entitled to vote thereon, unless the articles of incorporation or bylaws require a greater proportion. After member approval, the corporation must file Articles of Dissolution with the North Dakota Secretary of State. These articles must contain specific information, including the name of the corporation, the date the resolution of dissolution was adopted, and a statement that the resolution was adopted in accordance with the provisions of Chapter 10-33. Crucially, before filing the Articles of Dissolution, the corporation must cease conducting its business, except as necessary for winding up its affairs. This includes paying or providing for the payment of all known debts and liabilities, and distributing any remaining assets in accordance with the provisions of its articles of incorporation or bylaws, or as otherwise required by law, typically to another nonprofit organization with a similar purpose to maintain the charitable intent of the original organization. The question probes the specific requirement for ceasing business operations as a prerequisite to filing dissolution documents, a key step in the statutory winding-up process.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. A key aspect of this chapter is the process for dissolution. When a nonprofit corporation decides to dissolve, it must follow a specific procedure to wind up its affairs. This typically involves adopting a resolution for dissolution, providing notice to members and creditors, and then distributing assets. The distribution of assets is governed by North Dakota law and the corporation’s own articles of incorporation or bylaws. Generally, after paying or making provision for all liabilities and obligations, any remaining assets must be distributed for a purpose consistent with the corporation’s exempt status. This means assets cannot be distributed to members, directors, or officers. Instead, they must be distributed to another organization that is qualified under Section 501(c)(3) of the Internal Revenue Code, or to any other person or organization as may be permitted by the articles of incorporation, provided that such person or organization is dedicated to charitable, religious, eleemosynary, or educational purposes. Therefore, if a North Dakota nonprofit corporation dissolves and has remaining assets after satisfying its debts, these assets must be transferred to another qualifying nonprofit entity or a purpose aligned with its original charitable mission, as dictated by the North Dakota Century Code and its governing documents.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. When a nonprofit corporation in North Dakota proposes to merge with another entity, the process requires careful adherence to statutory requirements to ensure legal validity and protect the interests of members and the public. For a merger to be effective, the board of directors of each merging corporation must adopt a plan of merger. This plan must contain specific information, including the names of the corporations, the terms and conditions of the merger, and the manner in which the merger will be effected. Crucially, for corporations without members, or where member approval is not required by the articles of incorporation or bylaws, the plan of merger must be approved by the board of directors. In such cases, a majority vote of the directors present at a meeting where a quorum is established is sufficient for approval. The North Dakota Nonprofit Corporation Act emphasizes the board’s role in authorizing fundamental corporate changes like mergers. If the articles of incorporation or bylaws do not specify a different voting threshold for board approval of a merger, the default provision under North Dakota law requires approval by a majority of the directors in office at the time the action is taken, assuming a quorum is present. This ensures that the board, acting in its fiduciary capacity, can make decisions regarding the organization’s future structure and operations. The question hinges on the approval mechanism for a merger in the absence of member voting rights and when the articles of incorporation are silent on a specific board approval threshold for mergers. Therefore, the standard statutory requirement for board approval applies.

The scenario involves a North Dakota nonprofit corporation, “Prairie Roots Foundation,” which has received a substantial bequest intended for establishing a new community garden project. The question pertains to the proper handling of such restricted funds. North Dakota law, like that in many states, distinguishes between unrestricted and restricted funds. Restricted funds are those designated by donors for specific purposes or activities. When a nonprofit receives a restricted gift, it must manage and expend those funds in accordance with the donor’s intent. Failure to do so can lead to legal complications, including breach of trust. The North Dakota Nonprofit Corporation Act, specifically provisions concerning donor restrictions and the duties of directors, guides this process. The board of directors has a fiduciary duty to ensure that the funds are used solely for the stated purpose of the community garden. This means the funds cannot be commingled with general operating funds or diverted to other projects without proper legal procedures, which typically involve seeking court approval or, in some cases, donor consent if the original purpose becomes impossible or impracticable. The foundation must maintain clear accounting records to track the use of these specific funds. Therefore, the most appropriate action is to segregate these funds and use them exclusively for the community garden project as stipulated by the donor.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. A key aspect of this chapter is the process for amending articles of incorporation. For a nonprofit corporation to amend its articles, the board of directors must adopt a resolution recommending the amendment, followed by a vote of the members. The North Dakota Century Code § 10-33-54 outlines the procedure for amendments. It mandates that the board of directors shall adopt a resolution setting forth the proposed amendment and directing that it be submitted to a vote of the members. Unless the articles of incorporation or bylaws require a greater vote, an amendment must be adopted by receiving the affirmative vote of a majority of the votes cast by members entitled to vote on the amendment at a meeting of members, or by a written ballot, provided that notice of the meeting or ballot, setting forth the proposed amendment, shall have been given. Therefore, a resolution by the board of directors recommending the amendment and a subsequent vote by the members are the legally required steps for a nonprofit to amend its articles of incorporation in North Dakota. The absence of a specific member vote, even with board approval, would render the amendment invalid under state law.

In North Dakota, a nonprofit corporation’s ability to merge with another entity is governed by specific statutory provisions. When a North Dakota nonprofit corporation proposes to merge with a foreign nonprofit corporation, the process requires adherence to both North Dakota law and the laws of the foreign jurisdiction. The North Dakota Century Code, specifically Chapter 50-11.1 (Nonprofit Corporation Act), outlines the requirements for mergers. For a merger involving a foreign corporation, the North Dakota corporation must adopt a plan of merger that is approved by its board of directors and then by its members, if applicable, in accordance with the corporation’s articles of incorporation and bylaws. Crucially, the merger becomes effective when the plan of merger is filed with the North Dakota Secretary of State, provided that the surviving corporation is a North Dakota domestic nonprofit corporation. If the surviving corporation is the foreign entity, then the merger is effective according to the laws of the foreign jurisdiction, and the North Dakota corporation must file a certificate of dissolution with the North Dakota Secretary of State. The question tests the understanding of the procedural steps and filing requirements for such cross-jurisdictional mergers under North Dakota law. The correct sequence involves the adoption of the plan, member approval if necessary, and then the filing of the plan or dissolution documents with the appropriate state authority to effectuate the merger and ensure compliance with North Dakota’s corporate law.

The scenario involves a North Dakota nonprofit corporation, “Prairie Bloom Foundation,” which is seeking to amend its articles of incorporation to change its stated purpose from agricultural education to environmental conservation. North Dakota Century Code Section 10-33-46 governs amendments to articles of incorporation for nonprofit corporations. This section requires that amendments be adopted by the board of directors and, in most cases, by the members. Specifically, if the articles of incorporation provide for members, an amendment typically requires approval by a majority of the votes cast by members entitled to vote on the amendment, or by a greater percentage if specified in the articles or bylaws. If the corporation has no members or the articles do not provide for member voting on amendments, the amendment must be adopted by a majority vote of the directors. Since Prairie Bloom Foundation has members, and the change in purpose is a fundamental alteration of its organizational structure and mission, member approval is generally required. The board of directors can propose the amendment, but the ultimate authority for such a significant change rests with the membership. Therefore, the correct procedure involves the board of directors proposing the amendment and then submitting it to the members for their vote. The articles of incorporation themselves would outline the specific voting thresholds and procedures for member approval of amendments, but a general requirement for member consent exists when members have voting rights.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. When a nonprofit corporation in North Dakota intends to dissolve, it must follow a specific procedural path. The initial step involves the board of directors adopting a resolution recommending dissolution, provided the corporation has no members or has members with voting rights on dissolution. If members have voting rights, the resolution must then be submitted to the members for approval. For corporations with members, a majority of the votes cast by members entitled to vote on dissolution is generally required for approval. For corporations without members, or where members have no voting rights on dissolution, approval by two-thirds of the directors then in office is sufficient. Following member or director approval, the corporation must file Articles of Dissolution with the North Dakota Secretary of State. This filing formally initiates the dissolution process. The corporation must then cease conducting its activities except as necessary for winding up its affairs, which includes notifying creditors and distributing assets according to the North Dakota nonprofit corporation statutes. The question asks about the initial action required by the board of directors when a nonprofit corporation with voting members decides to dissolve. This initial action is the adoption of a resolution recommending dissolution, which is then presented to the members for their vote. Therefore, the board’s adoption of a resolution is the prerequisite for member consideration.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. A critical aspect of this chapter pertains to the dissolution of a nonprofit corporation. When a nonprofit corporation voluntarily dissolves, it must follow a specific process to wind up its affairs. This process involves ceasing its business activities, collecting its assets, paying or providing for its liabilities, and distributing any remaining assets. Crucially, North Dakota law mandates that upon dissolution, any remaining assets must be distributed for one or more exempt purposes specified in its articles of incorporation or bylaws. If the articles and bylaws do not specify such purposes, or if they are incapable of fulfillment, North Dakota law requires that the remaining assets be distributed to a person or persons who have been granted an exemption under section 501(c) of the Internal Revenue Code of 1986, as amended, or the corresponding section of any future federal tax code, or to a governmental entity for a public purpose. This ensures that the assets of a dissolved nonprofit continue to serve charitable or public interests, aligning with the foundational principles of nonprofit existence. The scenario presented involves a hypothetical nonprofit, “Prairie Roots Foundation,” whose articles of incorporation are silent on the distribution of assets upon dissolution. Therefore, the legal framework of North Dakota dictates that its remaining assets must be distributed to an entity qualifying under Section 501(c) of the Internal Revenue Code or a public governmental body.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. When a nonprofit corporation in North Dakota intends to merge with another entity, the process requires careful adherence to statutory provisions to ensure the legal validity of the merger. For a merger to be effective, the board of directors of each merging corporation must adopt a plan of merger. This plan must contain specific information, including the terms and conditions of the merger, the manner of converting shares or interests of the disappearing corporation into shares or interests of the surviving corporation, and any amendments to the articles of incorporation of the surviving corporation. Following board approval, the plan of merger must be submitted to the members of each corporation for their approval, unless the articles of incorporation or bylaws provide otherwise, or if the merger does not affect the members’ rights. The statute generally requires approval by two-thirds of the votes cast by members entitled to vote thereon, or a greater percentage if specified in the articles or bylaws. After member approval, the surviving corporation files articles of merger with the North Dakota Secretary of State. These articles must include the plan of merger, a statement that the plan was adopted by the members, and other required information. The merger becomes effective upon the filing of the articles of merger, or at a later date specified in the articles. The question focuses on the critical step of member approval, which is a fundamental requirement for most mergers involving member-based nonprofit corporations in North Dakota, ensuring democratic governance and protection of member interests.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. This chapter outlines the requirements for formation, governance, and dissolution. When a nonprofit corporation in North Dakota intends to merge with another entity, the process is governed by specific statutory provisions to ensure transparency and protect the interests of members, creditors, and the public. A plan of merger must be adopted by the board of directors and then approved by the members, if the corporation has members. The statute requires that the plan of merger be filed with the North Dakota Secretary of State. This filing is a critical step that makes the merger legally effective. The filing typically includes the articles of merger, which contain information about the merging entities and the surviving entity. The question probes the understanding of the legal finality of such a merger in North Dakota. The merger becomes effective upon the filing of the articles of merger with the Secretary of State, as per North Dakota Century Code Section 10-33-46. This is a ministerial act by the state, confirming compliance with the statutory requirements for the merger. Prior to filing, the plan must be approved, but legal effectiveness is tied to the state’s acceptance of the filing. Therefore, the act of filing, not the approval of the plan or the completion of the merger’s operational aspects, is the legally definitive moment for the merger’s effectiveness.

The scenario describes a situation where a North Dakota nonprofit corporation, “Prairie Roots Foundation,” intends to sell a parcel of land it owns. This land was originally donated to the foundation with a restriction that it be used for public educational purposes. North Dakota law, specifically regarding the disposition of assets by nonprofit corporations, requires that if assets are held in trust or subject to a restriction, the corporation must ensure that the disposition is consistent with the terms of the trust or restriction. When a restriction is for a specific charitable purpose, and that purpose can no longer be fulfilled or is no longer practical, the nonprofit must seek judicial approval to deviate from the original restriction. This process typically involves petitioning the appropriate North Dakota district court to allow the sale and potentially to redirect the proceeds to a similar charitable purpose that aligns with the donor’s original intent. The sale of restricted property without such court approval could be challenged as a breach of fiduciary duty or a violation of the terms of the gift. Therefore, Prairie Roots Foundation must obtain a court order to sell the land.

The scenario describes a situation where a North Dakota nonprofit corporation, “Prairie Roots Foundation,” intends to sell a parcel of land it owns. Under North Dakota law, specifically related to nonprofit corporations, the disposition of substantially all of its assets requires specific procedures to ensure proper governance and protection of member or donor interests. While the North Dakota Business Corporation Act (Title 10, Chapter 10-19.1 of the North Dakota Century Code) governs for-profit corporations, nonprofit corporations are primarily governed by the North Dakota Nonprofit Corporation Act (Title 10, Chapter 10-33 of the North Dakota Century Code). Section 10-33-46 of the North Dakota Century Code outlines the requirements for disposition of assets. This section mandates that a sale, lease, exchange, or other disposition of all or substantially all of the corporation’s assets, other than in the usual and regular course of business, requires approval by the board of directors and, in many cases, by the members if the corporation has members. The key consideration here is whether the land constitutes “substantially all” of the corporation’s assets. If it does, then the statutory provisions for disposition of substantially all assets apply. This typically involves a resolution by the board of directors and, if applicable, a vote by the members, often requiring a higher threshold of approval than ordinary business decisions. The question hinges on the procedural requirements for such a significant asset transfer, distinguishing it from routine sales. The law aims to prevent a small group from selling off the core assets of the organization without broader consent, especially if the organization has members or if the disposition fundamentally alters its mission or operational capacity. Therefore, the correct procedural step involves board approval and, depending on the corporate structure and bylaws, potentially member approval, following the statutory guidelines for disposition of substantially all assets.

North Dakota Century Code Section 10-33-11 governs the dissolution of nonprofit corporations. When a nonprofit corporation is dissolved, its assets must be distributed in accordance with its articles of incorporation or bylaws. If these documents do not specify a distribution plan, or if the plan is ineffective, North Dakota law mandates that the remaining assets 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 a governmental entity for a public purpose. This ensures that assets are used for charitable or public benefit purposes consistent with the original intent of nonprofit status. The process involves winding up the corporation’s affairs, paying debts and liabilities, and then distributing any remaining assets. Failure to adhere to these distribution requirements can lead to legal challenges and may impact the tax-exempt status of the receiving organizations. The key principle is the dedication of assets to charitable or public purposes upon dissolution, preventing private inurement.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. When a nonprofit corporation in North Dakota wishes to amend its articles of incorporation, it must follow a specific procedural pathway. This typically involves a resolution by the board of directors, followed by a vote of the members if the articles or bylaws require it, or if the amendment would adversely affect the rights of members. For amendments that alter fundamental aspects of the corporation, such as its purpose or dissolution provisions, member approval is often mandatory. The amendment must then be filed with the North Dakota Secretary of State. The question asks about the most appropriate method for a nonprofit to formally change its stated mission. While a board resolution is a necessary internal step, it is not sufficient for an external, legally binding change to the articles of incorporation. A membership vote is the most democratic and legally sound method to ratify significant changes to the organizational charter, ensuring member consensus on the core purpose. Filing the amendment with the Secretary of State is the final ministerial act to make the change legally effective. Therefore, the process culminating in a member vote and subsequent filing with the Secretary of State is the correct and complete procedure.

The scenario describes a situation where a North Dakota nonprofit organization, “Prairie Roots Alliance,” intends to sell a parcel of land it owns. This land was originally donated to the organization by a private donor with the specific stipulation that it be used solely for the preservation of native flora. The question pertains to the legal requirements and considerations for the disposition of such restricted property under North Dakota law. In North Dakota, nonprofit corporations are governed by the North Dakota Nonprofit Corporation Act, found in Chapter 10-33 of the North Dakota Century Code. When a nonprofit receives property with specific restrictions or dedications, the disposition of that property is subject to particular legal frameworks. If the property was gifted with a restriction on its use, the organization must ensure that any sale or transfer complies with the terms of the gift and applicable state law. This often involves seeking court approval or obtaining consent from the donor or their heirs, especially if the restriction is a perpetual or significant covenant. The North Dakota Uniform Prudent Management of Institutional Funds Act (UPMIFA), codified in Chapter 57-24.1 of the North Dakota Century Code, also governs the management and investment of endowment funds, which can include donated assets with restrictions. While UPMIFA primarily deals with investment, its principles of prudent management and adherence to donor intent are relevant. Specifically, for the sale of property subject to a restrictive covenant or condition, North Dakota law generally requires that the organization demonstrate that the sale is in furtherance of its charitable purposes and that the proceeds will be managed in a manner consistent with the original donor’s intent. This might involve petitioning a North Dakota district court for permission to sell, especially if the restriction is deemed perpetual or if the donor’s intent cannot be easily satisfied otherwise. The court would assess whether the sale is necessary or beneficial to the organization and whether the donor’s charitable purpose can still be met through the proceeds. Therefore, the most appropriate legal action for Prairie Roots Alliance to undertake before selling the land is to petition the appropriate North Dakota district court for authorization to sell the property, demonstrating that the sale is consistent with the donor’s original intent and the organization’s charitable mission. This process ensures compliance with fiduciary duties and the specific terms of the gift.

The North Dakota Century Code addresses the dissolution of nonprofit corporations in Chapter 10-33. Specifically, Section 10-33-134 outlines the procedure for voluntary dissolution. This process requires a resolution to be adopted by the board of directors and then submitted to the members for approval. For corporations with members, the articles of incorporation or bylaws typically specify the voting threshold for dissolution. If the articles or bylaws are silent, the North Dakota Nonprofit Corporation Act defaults to a majority vote of the members present at a meeting where a quorum is present, or a majority of all members if action is taken by written consent without a meeting. In this scenario, the board of directors of the “Prairie Roots Conservancy,” a North Dakota nonprofit, has approved a dissolution resolution. However, the articles of incorporation are silent on the specific voting requirement for member approval of dissolution. Therefore, the default provision of the North Dakota Nonprofit Corporation Act applies. The act requires that a resolution to dissolve be approved by a majority of all members entitled to vote on the dissolution, assuming a quorum is met for any meeting-based vote or that written consent is obtained from a majority of all members. This ensures that the decision to dissolve is broadly supported by the membership.

North Dakota Century Code Section 10-33-11.1 addresses the reporting of certain transactions by nonprofit corporations. Specifically, it requires reporting of any transaction where a director, officer, or their immediate family member has a material financial interest. The statute aims to prevent conflicts of interest and ensure transparency in the management of nonprofit assets. The threshold for reporting is a financial interest that is “material.” While the statute does not define a specific monetary amount for materiality, it generally refers to an interest that could reasonably be expected to influence the judgment of the individual. In the scenario presented, the purchase of services from a director’s spouse’s business, where the director is involved in the decision-making process for selecting vendors, constitutes a material financial interest. The value of the contract, $5,000, is relevant in assessing the significance of the interest, but the existence of the relationship and the director’s involvement in the decision are the primary triggers for reporting. The reporting requirement is a disclosure to the board of directors, not necessarily public filing unless otherwise mandated by other regulations or the organization’s bylaws. The absence of a specific dollar threshold for “materiality” means that any transaction where a conflict could reasonably arise must be disclosed. The question tests the understanding of what constitutes a reportable transaction under North Dakota law, focusing on the concept of material financial interest and the process of disclosure within the organization.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. When a nonprofit corporation in North Dakota intends to dissolve, it must follow a specific statutory process to ensure its assets are distributed appropriately and its legal existence is properly terminated. The process generally involves a resolution by the board of directors, followed by a vote of the members, if applicable, or by a specified majority of the directors if there are no members. Following approval, a Certificate of Dissolution must be filed with the North Dakota Secretary of State. This certificate formally notifies the state that the corporation is ceasing its operations and existence. The filing of this certificate is a crucial step that legally effects the dissolution. Prior to this filing, the corporation must wind up its affairs, which includes ceasing its business operations, collecting its assets, paying or providing for its liabilities, and distributing any remaining assets in accordance with the provisions of the North Dakota nonprofit corporation law and the corporation’s articles of incorporation or bylaws. If the corporation has any remaining assets after satisfying its liabilities, these assets must be distributed to one or more domestic or foreign corporations or not-for-profit corporations, or to the federal government, a state, and a local government, or to any other person, as provided in its articles of incorporation or bylaws, or if not so provided, to a person or persons who have been selected in accordance with a plan of distribution approved by the board of directors and the members, if any, or by the directors if there are no members. The question focuses on the final legal act that formally concludes the corporate existence from the state’s perspective.

North Dakota Century Code Chapter 10-33, the Uniform Prudent Management of Institutional Funds Act (UPMIFA), governs the management and investment of endowment funds held by nonprofit organizations. A key aspect of UPMIFA is the concept of “historic dollar value.” This value represents the aggregate fair value in dollars of an endowment fund on the date it was established, or on January 1, 1972, if the fund was established prior to that date. UPMIFA mandates that expenditures from an endowment fund must not be made if the fund is below its historic dollar value, unless the expenditure is permitted by the terms of the fund’s gift instrument. This protection ensures that the principal amount of the original gift is preserved in real terms, allowing the organization to spend only the “net appreciation” or gains generated by the fund. The calculation of historic dollar value is a foundational element for determining the spendable portion of an endowment. For instance, if a donor established an endowment on March 15, 2010, with an initial fair value of $50,000, the historic dollar value for that fund is $50,000. If, on December 31, 2023, the fair value of this endowment is $75,000, the organization can spend up to $25,000 ($75,000 – $50,000) without violating the UPMIFA principle, assuming no other restrictions in the gift instrument. If the fair value had dropped to $45,000, no expenditure would be permissible under this rule. The purpose of this rule is to safeguard the long-term sustainability of endowment funds, ensuring they continue to support the organization’s mission for generations to come, by preventing the erosion of the original corpus due to imprudent spending or market downturns.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. When a nonprofit corporation in North Dakota intends to dissolve, it must follow a specific process to ensure its assets are distributed properly and its legal existence is terminated. This process typically involves a resolution by the board of directors, followed by a vote of the members if the articles of incorporation or bylaws require it. Crucially, after the dissolution is authorized, the corporation must cease its activities except as necessary to wind up its affairs. This winding up includes collecting its assets, paying its debts and obligations, and distributing any remaining assets. North Dakota law mandates that any remaining assets must be distributed to one or more domestic or foreign corporations or foundations that are exempt under Section 501(c)(3) of the Internal Revenue Code, or to a public benefit corporation, or to the state or any of its political subdivisions for a public purpose. This ensures that the assets of a dissolved nonprofit continue to serve charitable or public purposes, aligning with the original intent of its tax-exempt status. Failure to adhere to these distribution requirements can lead to legal challenges and potential liability for the directors. Therefore, a resolution by the board of directors to dissolve and distribute assets to a qualified 501(c)(3) organization is a fundamental step in the dissolution process under North Dakota law.

The North Dakota Century Code, specifically Chapter 10-33, governs nonprofit corporations. This chapter outlines the procedures for formation, governance, and dissolution. When a nonprofit corporation in North Dakota intends to merge with another entity, it must follow specific statutory requirements to ensure the merger is legally valid and protects the interests of its members, creditors, and the public. The process generally involves board approval, member approval (if required by the articles of incorporation or bylaws), and filing the necessary documents with the North Dakota Secretary of State. The articles of incorporation of a nonprofit corporation can specify the voting requirements for such fundamental corporate changes, including mergers. If the articles are silent on a specific voting threshold for mergers, the default provisions within the North Dakota Century Code will apply. For a merger, North Dakota law typically requires approval by a majority of the votes cast by members entitled to vote thereon, unless the articles of incorporation specify a different quorum or voting threshold. However, for mergers involving a disposition of substantially all assets or a dissolution, higher voting thresholds might be implicated depending on the specific circumstances and the corporation’s governing documents. The question tests the understanding of the standard voting requirements for a merger under North Dakota law, assuming no specific deviations are noted in the articles or bylaws for this particular action. Therefore, the statutory default for member approval of a merger, which is a majority of the votes cast by members entitled to vote, is the governing principle.

The North Dakota Century Code outlines specific procedures for the dissolution of nonprofit corporations. When a nonprofit corporation is dissolved, its assets must be distributed according to the articles of incorporation and the applicable laws. North Dakota law, specifically in provisions related to nonprofit corporation dissolution, mandates that after paying or making provision for all liabilities and obligations, any remaining assets must be distributed to one or more qualified organizations engaged in activities similar to those of the dissolved corporation, or to any other organization designated in the articles of incorporation or bylaws for such purposes. If the articles of incorporation or bylaws do not specify a recipient, the assets are to be distributed to a nonprofit organization that the board of directors deems best suited to carry out the purposes for which the corporation was formed. The key is that remaining assets cannot be distributed to members, directors, or officers of the corporation. This principle ensures that charitable assets continue to serve charitable purposes, preventing private inurement. Therefore, a nonprofit corporation that has ceased operations and settled its debts must ensure its remaining assets are transferred to another entity that aligns with its original mission or a designated charitable purpose, as per North Dakota’s nonprofit dissolution statutes.

The scenario presented involves a North Dakota nonprofit corporation, “Prairie Roots Foundation,” which has received a substantial donation from a private donor designated for a specific program. The question revolves around the proper handling of these restricted funds and the legal framework governing such transactions within North Dakota. North Dakota Century Code Chapter 50-23.1 governs the operation of nonprofit corporations. Specifically, when a donor restricts funds for a particular purpose, the nonprofit organization has a fiduciary duty to use those funds solely for the stated purpose. Failure to do so could lead to legal repercussions, including potential lawsuits from the donor or beneficiaries, and could also jeopardize the organization’s tax-exempt status. The foundation’s board of directors must ensure that these funds are segregated and accounted for separately, and that all expenditures from this fund align strictly with the donor’s expressed intent. If the intended program becomes impossible or impracticable to fulfill, North Dakota law, similar to general nonprofit principles, often allows for judicial modification of the restriction if it can be shown that the donor’s general charitable intent can still be met. However, the initial and primary obligation is to adhere to the restriction as closely as possible. Therefore, the most legally sound and ethically appropriate action for the Prairie Roots Foundation is to establish a separate account for the restricted funds and allocate them exclusively to the specified agricultural education initiative. This demonstrates compliance with donor intent and prudent financial management under North Dakota nonprofit law.

In North Dakota, a nonprofit corporation’s ability to merge with another entity is governed by specific statutory provisions, primarily found within the North Dakota Century Code. When considering a merger, the board of directors plays a crucial role in approving the merger plan. Following board approval, the plan must typically be submitted to the members for their vote, if the nonprofit has members with voting rights. The North Dakota Nonprofit Corporation Act, specifically Chapter 50-34, outlines the procedures for mergers. Section 50-34-11 dictates that a plan of merger must be adopted by the board of directors and then submitted to the members for approval at a meeting. Unless the articles of incorporation or bylaws specify a greater vote, a majority of the votes cast by members entitled to vote is generally sufficient for approval. However, if the nonprofit has no members, or if the members have no voting rights on the merger, then only the board of directors’ approval is required. The question asks about a scenario where the articles of incorporation are silent on member voting for mergers and the organization has members. In such a case, the default statutory provision for member approval applies. The North Dakota Century Code, in the absence of specific provisions in the articles or bylaws, requires member approval for a merger, with a majority of the votes cast by members entitled to vote being the standard for adoption. Therefore, the merger plan must be submitted to the members for their approval.

The scenario involves a North Dakota nonprofit corporation, “Prairie Roots Initiative,” which has received a substantial donation designated for a specific educational program. The question revolves around the proper handling of these restricted funds. North Dakota law, consistent with general nonprofit principles, distinguishes between unrestricted and restricted funds. Restricted funds are those donated for a specific purpose, program, or time period, as stipulated by the donor. The board of directors has a fiduciary duty to ensure that these funds are used solely for the purpose for which they were donated. Commingling restricted funds with general operating funds without proper accounting segregation would violate this duty and potentially lead to legal complications, including challenges from the donor or regulatory bodies. The key legal principle here is the donor’s intent and the corporation’s obligation to honor it. Therefore, the Prairie Roots Initiative must maintain separate accounting records for the restricted donation and can only disburse these funds for the approved educational program. Transferring the funds to an unrestricted endowment, while potentially beneficial for long-term financial stability, would require the donor’s explicit consent or a court order under specific cy-pres doctrines if the original purpose becomes impossible or impracticable to fulfill, which is not indicated in the scenario. The scenario does not suggest any issues with the corporation’s tax-exempt status that would necessitate a dissolution or liquidation. The primary concern is the stewardship of restricted assets.