The West Virginia Nonprofit Corporation Act, specifically West Virginia Code Chapter 35, Article 1, governs the formation, operation, and dissolution of nonprofit corporations within the state. When a nonprofit corporation in West Virginia decides to dissolve voluntarily, the process involves several statutory steps to ensure proper winding up of affairs and distribution of assets. The initial step in a voluntary dissolution is typically the adoption of a resolution by the board of directors, followed by approval from the members, if the corporation has members. This resolution must outline the intent to dissolve and the effective date. Following the adoption of the resolution, the corporation must file a Certificate of Dissolution with the West Virginia Secretary of State. This certificate formally notifies the state of the corporation’s intention to cease operations. During the winding-up period, the corporation’s affairs are managed by its directors or designated officers. This includes ceasing all business activities except those necessary for winding up, collecting assets, paying debts and liabilities, and distributing any remaining assets in accordance with the West Virginia Nonprofit Corporation Act and the corporation’s own governing documents. The Act requires that after paying or making provision for all known debts and liabilities, any remaining assets held for charitable purposes must be distributed to one or more organizations fitting a similar purpose, as specified in the articles of incorporation or bylaws, or as determined by the circuit court of the county where the corporation has its principal office. This ensures that assets dedicated to public benefit are not diverted to private gain. The final step involves filing a Certificate of Termination with the Secretary of State after the winding-up process is complete.

The West Virginia Nonprofit Corporation Act, specifically West Virginia Code Chapter 35, Article 1, governs the formation and operation of nonprofit corporations in the state. When a nonprofit corporation in West Virginia seeks to dissolve voluntarily, it must follow a specific procedural pathway. This process typically involves a resolution adopted by the board of directors, followed by approval from the members, if applicable, or a specific majority of the board if there are no members. Following this internal approval, the corporation must file Articles of Dissolution with the West Virginia Secretary of State. This filing is the formal act that officially terminates the corporation’s legal existence. The Act requires that before filing, the corporation must provide notice to creditors and claimants and wind up its affairs, which includes paying or making provision for all known debts and liabilities. The filing of the Articles of Dissolution signifies that the corporation has completed this winding-up process. Therefore, the critical step to effectuate voluntary dissolution and cease legal existence is the filing of the Articles of Dissolution with the appropriate state authority.

The West Virginia Nonprofit Corporation Act, specifically under Chapter 35, Article 1, outlines the process for dissolving a nonprofit corporation. When a nonprofit corporation intends to dissolve voluntarily, it must first adopt a resolution of dissolution. This resolution must be approved by a specific voting threshold of its members or, if the corporation has no members, by its board of directors. The Act specifies that for corporations with members, a majority of the members present and voting at a meeting where a quorum is present is generally required, unless the articles of incorporation or bylaws mandate a higher threshold. For corporations without members, a majority vote of the directors then in office is typically sufficient. Following the adoption of the resolution, the corporation must file a Certificate of Dissolution with the West Virginia Secretary of State. This certificate serves as formal notification of the dissolution. Furthermore, the Act requires the corporation to wind up its affairs, which involves 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 West Virginia Nonprofit Corporation Act and its own governing documents. Specifically, any remaining assets must be distributed to one or more qualified organizations or governmental entities for a public purpose, as defined by the Act, or as otherwise permitted by law. This ensures that the assets of a dissolved nonprofit continue to serve charitable or public interests, preventing private inurement.

In West Virginia, nonprofit corporations are governed by the West Virginia Nonprofit Corporation Act, which is codified in Chapter 31E of the West Virginia Code. A key aspect of this Act pertains to the dissolution of nonprofit corporations. When a nonprofit corporation dissolves, its assets must be distributed in accordance with its articles of incorporation, bylaws, and applicable law. Specifically, West Virginia Code § 31E-14-1407 mandates that after paying or making provision for all liabilities, remaining assets shall be distributed to one or more domestic or foreign corporations or not-for-profit corporations, or to any other person, that are qualified under the laws of West Virginia and the United States to receive distributions. This ensures that the assets are used for purposes consistent with the nonprofit’s mission or for charitable purposes. Failure to adhere to these distribution requirements can lead to legal challenges and potential penalties. The distribution of assets upon dissolution is a critical step in winding up the affairs of a nonprofit organization, ensuring that its residual property continues to serve public or charitable interests rather than reverting to private individuals, except in specific circumstances outlined by law, such as if the articles of incorporation provided for such a distribution.

The West Virginia Code, specifically Chapter 35, deals with religious, charitable, and educational organizations. When a nonprofit corporation in West Virginia, such as the “Appalachian Heritage Foundation,” intends to sell or otherwise dispose of substantially all of its assets, the West Virginia Code mandates a specific procedure to ensure transparency and protect the interests of stakeholders and the public. This procedure is designed to prevent the misuse or dissipation of assets that were dedicated to charitable purposes. The law requires that such a disposition be authorized by a resolution of the board of directors. Crucially, this resolution must then be submitted to and approved by the West Virginia Secretary of State. This approval process involves a review to ensure the transaction aligns with the organization’s stated charitable mission and complies with state law. Furthermore, the law often requires public notice of the proposed transaction to allow for any objections or concerns to be raised. The process is not merely an internal board decision; it involves oversight from a state agency. The filing of the resolution with the Secretary of State is the formal mechanism for obtaining the necessary state authorization for a fundamental change in the corporation’s asset structure.

The West Virginia Secretary of State oversees the registration and ongoing compliance of nonprofit corporations. A key aspect of this oversight involves the filing of annual reports, which are crucial for maintaining active status. West Virginia Code §31E-16-1601 mandates that each nonprofit corporation must file an annual report with the Secretary of State. This report serves to update information about the corporation’s officers, directors, and registered agent, and confirms its continued operation. Failure to file this report by the due date, which is typically the anniversary date of the corporation’s formation or qualification in West Virginia, can lead to administrative dissolution. The process for reinstatement after dissolution is outlined in West Virginia Code §31E-14-1422, which generally involves filing all delinquent annual reports, paying any accrued fees or penalties, and submitting a reinstatement application. The filing fee for the annual report is a nominal amount, and there are also late filing penalties. The question tests the understanding of the consequences of failing to file the annual report and the general process for rectifying such a lapse in compliance. The calculation is not mathematical but conceptual: understanding the statutory requirements and consequences. The correct option reflects the statutory requirement for filing delinquent reports and paying fees/penalties for reinstatement.

The West Virginia Code Chapter 31, Article 13, Section 31-13-7 addresses the dissolution of nonprofit corporations. Specifically, it outlines the procedures for voluntary dissolution. For a nonprofit corporation to voluntarily dissolve, a resolution to dissolve must be adopted by the board of directors and then submitted to the members for approval. The code requires that such a resolution be approved by a majority of the votes cast by the members entitled to vote thereon at a meeting of members duly called for that purpose. Alternatively, if the corporation has no members or no provision for members to vote on dissolution, the resolution must be adopted by the board of directors and then approved by a majority of the incorporators, if any. The subsequent steps involve filing a certificate of dissolution with the West Virginia Secretary of State, which includes specific information such as the name of the corporation, the date the dissolution was authorized, and a statement that the corporation has no debts or has made adequate provision for the payment of all debts and liabilities. The question tests the understanding of the member approval requirement for voluntary dissolution under West Virginia law, differentiating it from situations that might require only board approval or a different voting threshold.

The West Virginia Uniform Prudent Management of Institutional Funds Act (UPMIFA), as codified in West Virginia Code Chapter 36, Article 10, governs the management and investment of endowment funds held by charitable organizations. A key provision of UPMIFA relates to the spending from an endowment fund. While the Act permits spending from an endowment fund, it mandates that such spending must be prudent and consider various factors to ensure the long-term sustainability of the fund. Specifically, Section 36-10-5 outlines the factors an organization must consider when determining the total return to be expended. These factors include the duration and preservation of the endowment fund, the purposes of the organization and the endowment fund, general economic conditions, the possible effect of inflation and deflation, the expected total return from investments, whether and to what extent an institutional unit should resort to an endowment fund in its entirety or to portions of it under an endowment restriction, and the agency’s spending policies and practices. The Act does not, however, mandate a fixed percentage withdrawal rate; rather, it emphasizes a prudent process of decision-making. Therefore, an organization considering spending from an endowment fund must engage in a careful, documented process that weighs these statutory considerations. The specific amount spent is not predetermined by a simple calculation but by a deliberative process guided by the prudence standard.

In West Virginia, the dissolution of a nonprofit corporation is governed by specific statutory provisions. When a nonprofit corporation intends to dissolve voluntarily, it must follow a prescribed process to ensure that its assets are distributed appropriately and that its legal existence is properly terminated. The West Virginia Code, specifically Chapter 31E, addresses nonprofit corporations. According to this chapter, a voluntary dissolution typically requires a resolution adopted by the board of directors, followed by approval from the members, if the corporation has members. Once these internal approvals are secured, the corporation must file a Certificate of Dissolution with the West Virginia Secretary of State. This certificate officially notifies the state of the corporation’s intent to cease operations. Crucially, before or concurrently with filing the certificate, the corporation must undertake steps to wind up its affairs. This winding up process involves ceasing its business operations, collecting its assets, paying or providing for its liabilities, and distributing any remaining assets. For a public benefit or religious corporation, remaining assets must be distributed for charitable or religious purposes consistent with the corporation’s purposes. For a mutual benefit corporation, assets are distributed according to its articles of incorporation or bylaws. The filing of the Certificate of Dissolution is the final legal step to effectuate the dissolution. Therefore, the correct sequence involves board approval, member approval (if applicable), winding up affairs, and finally, filing the Certificate of Dissolution.

The West Virginia Uniform Prudent Management of Institutional Funds Act (UPMIFA), codified in West Virginia Code Chapter 36, Article 2, governs the management and investment of institutional funds held by nonprofit organizations. A key aspect of UPMIFA is the concept of “historic dollar value,” which is defined as the fair value in dollars of an institutional fund at the time it became an institutional fund, plus the fair value in dollars of any additions to the fund, minus any amounts withdrawn. When an organization expends funds that are designated for a specific purpose or are subject to donor restrictions, the determination of whether the expenditure exceeds the historic dollar value is crucial for maintaining the integrity of the endowment. If an expenditure from an endowment fund is made without regard to the historic dollar value, and if the remaining value of the fund falls below the historic dollar value, this action would be considered a violation of UPMIFA principles, as it effectively invades the principal of the endowment. Therefore, to avoid such a violation, any expenditure from an endowment must ensure that the remaining balance of the fund, after the expenditure, is at least equal to its historic dollar value. In this scenario, the endowment fund’s historic dollar value is \$500,000. The organization decides to use \$75,000 from this endowment for operational expenses. To determine if this expenditure is permissible under UPMIFA, we check if the remaining balance is above the historic dollar value. The remaining balance would be \$500,000 – \$75,000 = \$425,000. Since \$425,000 is less than the historic dollar value of \$500,000, this expenditure would be considered an impermissible invasion of the endowment principal according to UPMIFA. The question asks about the consequence of spending \$75,000 from an endowment with a historic dollar value of \$500,000. The remaining value is \$500,000 – \$75,000 = \$425,000. This is below the historic dollar value. Therefore, the organization would have effectively invaded the principal of the endowment.

The West Virginia Uniform Prudent Management of Institutional Funds Act (UPMIFA), as codified in West Virginia Code Chapter 36, Article 10, governs the management and investment of endowment funds held by nonprofit organizations. UPMIFA, adopted by West Virginia in 2009, replaced the older Uniform Management of Institutional Funds Act (UMIFA). A key provision of UPMIFA is the ability for an organization to spend from an endowment fund without donor restriction if the fund has been in existence for at least 20 years and its fair value is less than 25% of the total value of all endowment funds of the organization. This provision, found in West Virginia Code § 36-10-6(f), allows for the termination of small, old endowments that are no longer economically viable to manage and invest effectively, provided specific conditions are met. The 20-year threshold and the 25% of total endowment value are critical components of this exception to the general rule of preserving endowment principal. The purpose is to provide flexibility for organizations to manage their resources efficiently without being unduly burdened by insignificant or outdated endowment restrictions. This specific rule is designed to prevent administrative costs from consuming the value of very small, long-standing endowments.

The West Virginia Uniform Prudent Management of Institutional Funds Act (UPMIFA), codified in West Virginia Code Chapter 36, Article 2A, governs the management and investment of institutional funds held by nonprofit organizations. A key aspect of UPMIFA is the concept of “total return” investing, which allows for the use of both income and appreciation of the fund for expenditures, provided certain conditions are met. Specifically, Section 36-2A-5 of the West Virginia Code outlines the factors a fiduciary must consider when making decisions regarding the management and expenditure of institutional funds. These factors include the duration of the institutional purpose, the purposes of the institution and the fund, the effect of general economic conditions, the possible effect of inflation and deflation, the expected total return from income and the appreciation of investments, the resources of the institution from other sources, and an investment in relation to others, considering whether the total portfolio is prudent. The Act also permits the delegation of investment and management functions, but this delegation does not relieve the fiduciary of responsibility. The prudent investor rule, as adopted by UPMIFA, requires a fiduciary to act with care, skill, and caution that a prudent person acting in a like capacity and familiar with such matters would use. The determination of an “appropriated amount” for expenditure is not based on a fixed percentage but rather on a prudent assessment of all relevant factors to ensure the long-term health of the endowment. Therefore, when a board of directors of a West Virginia nonprofit is considering expending funds from an endowment, they must engage in a thorough analysis of these statutory factors to ensure their decision is prudent and aligns with the long-term preservation and growth of the fund, consistent with the donor’s intent and the organization’s mission. The calculation of a specific dollar amount for expenditure is a result of this prudent process, not a predetermined formula.

The West Virginia Nonprofit Corporation Act, specifically referencing the requirements for dissolution, outlines a process that involves both internal corporate action and external filings. For a nonprofit corporation intending to dissolve voluntarily, the initial step typically involves the board of directors adopting a resolution recommending dissolution. This resolution must then be submitted to the members, if the corporation has members. Approval by the members is generally required, with the voting threshold specified in the articles of incorporation or bylaws, or by default as per the Act. Following member approval, the corporation must file Articles of Dissolution with the West Virginia Secretary of State. This filing formally notifies the state of the corporation’s intent to cease operations and begin the winding-up process. The winding-up process itself involves satisfying liabilities, distributing assets, and completing any unfinished business. The Articles of Dissolution are the official document that initiates this formal dissolution procedure with the state. Therefore, the correct sequence for voluntary dissolution under West Virginia law involves board action, member approval, and the filing of Articles of Dissolution.

In West Virginia, a nonprofit corporation, upon dissolution, must distribute its assets for charitable purposes. This is a fundamental principle governed by West Virginia Code §35-1-4, which mandates that assets of a dissolved nonprofit, after payment of debts and liabilities, shall be distributed to one or more domestic or foreign corporations or other organizations engaged in activities substantially similar to those of the dissolving corporation, or for other charitable purposes. The key here is the prohibition against private inurement, meaning that no part of the net earnings of a nonprofit can inure to the benefit of any private shareholder or individual. Therefore, distributing assets to members or founders as a return on their investment or contribution is generally impermissible. The distribution must align with the organization’s stated charitable mission. If the articles of incorporation specify a particular recipient or class of recipients for dissolution assets, that directive must be followed, provided it aligns with charitable intent. Absent such specific provisions, the board of directors has the fiduciary duty to identify a suitable charitable recipient.

The West Virginia Uniform Prudent Management of Institutional Funds Act (UPMIFA), codified at West Virginia Code §36-15-1 et seq., governs the management and investment of endowment funds by nonprofit organizations. A key aspect of UPMIFA is the concept of “historic dollar value,” which is defined as the fair value in dollars of an endowment fund on the date it was created or on January 1, 1977, whichever is later, plus the fair value of any additions to the fund in the form of other endowment funds, plus the fair value of any amounts transferred from other endowment funds, minus the amounts paid from or appropriated for the fund in accordance with the terms of the applicable gift instrument and the terms of this article. When an organization appropriates for expenditure an amount exceeding the historic dollar value, it is considered a violation of UPMIFA unless specific conditions are met, such as a determination by the governing board that the expenditure is prudent and consistent with the purposes of the fund and the organization, and that the expenditure does not impair the long-term ability of the fund to meet its purposes. The question probes the understanding of when an appropriation from an endowment fund might be permissible even if it dips below the historic dollar value, focusing on the prudence standard and the specific notification requirements outlined in the West Virginia statute. Specifically, West Virginia Code §36-15-5(a) allows for the appropriation of amounts exceeding the historic dollar value if the institution determines that the appropriation is prudent and consistent with the purposes of the fund and the institution, and that the expenditure does not impair the long-term ability of the fund to meet its purposes. Furthermore, West Virginia Code §36-15-5(b) requires that the institution notify the Attorney General of West Virginia in writing of its intent to appropriate for expenditure an amount exceeding the historic dollar value of the fund at least 60 days before the appropriation is made. This notification must describe the appropriation and the institution’s determination that it is prudent and consistent with the purposes of the fund and the institution, and that the expenditure does not impair the long-term ability of the fund to meet its purposes. Therefore, the critical element missing for the organization to proceed with the appropriation, even with a prudent determination, is the required 60-day advance notification to the West Virginia Attorney General.

The West Virginia Uniform Prudent Management of Institutional Funds Act (UPMIFA), codified in West Virginia Code Chapter 36, Article 2A, governs the management and investment of institutional funds, including those held by nonprofit organizations. A key provision of UPMIFA addresses the modification or termination of a restriction on the use or investment of an institutional fund. Section 36-2A-6 of the West Virginia Code outlines the circumstances under which a court may modify or terminate such a restriction. Specifically, it allows for modification or termination if, due to circumstances not anticipated by the donor, compliance with the restriction would substantially impair the accomplishment of the organization’s charitable purposes. The standard for modification or termination is high, requiring a demonstration that the restriction has become unlawful, impracticable, or impossible, or that it is materially altered or destroyed the material purpose of the fund. This is distinct from a cy pres doctrine application, which is a broader equitable principle that can be applied to charitable trusts. UPMIFA provides a statutory framework for institutional funds, which may include endowments. The statute emphasizes the need for prudence in managing these funds and allows for flexibility when circumstances change significantly, ensuring the organization can continue to fulfill its mission. The question probes the specific statutory authority in West Virginia for altering fund restrictions when faced with unforeseen circumstances that hinder the organization’s core mission, as established by UPMIFA.

The West Virginia Nonprofit Corporation Act, specifically concerning the dissolution of a nonprofit corporation, outlines a multi-step process. For voluntary dissolution, the board of directors must adopt a resolution recommending dissolution, which then requires approval by a majority of the voting members. Following member approval, a Certificate of Dissolution must be filed with the West Virginia Secretary of State. This certificate must include specific information such as the corporation’s name, the date the dissolution was authorized, and a statement that the corporation has no debts or obligations or that provision has been made for their satisfaction. Crucially, before filing the Certificate of Dissolution, the corporation must wind up its affairs, which involves collecting assets, paying or making provision for liabilities, and distributing any remaining assets in accordance with the corporation’s articles of incorporation or bylaws, or if not specified, to a recipient that qualifies as an exempt organization under federal tax law. The Act does not mandate a specific waiting period after member approval before filing the certificate, but the winding up process must be substantially complete. Therefore, filing the Certificate of Dissolution immediately after member approval, provided the winding up process has been adequately addressed and documented, is permissible.

In West Virginia, the dissolution of a nonprofit corporation is governed by specific statutory procedures to ensure that assets are distributed appropriately and that the organization ceases to exist legally in an orderly manner. The West Virginia Nonprofit Corporation Act, specifically referencing West Virginia Code §31-1-141, outlines the process. For a nonprofit corporation that has not commenced its activities or has no debts or liabilities, the dissolution can be initiated by a resolution adopted by a majority of the directors. This resolution then typically requires approval by the members if the corporation has members, or by a vote of the incorporators if there are no members. However, the question specifies a scenario where the nonprofit has commenced activities and has outstanding liabilities. In such cases, the dissolution process becomes more formal. A plan of dissolution must be adopted by the board of directors and then submitted to the members for approval. The minimum vote required for member approval is typically two-thirds of the votes cast by members entitled to vote on the dissolution, as per the corporation’s articles of incorporation or bylaws, or as otherwise provided by statute if the governing documents are silent or less stringent. Following member approval, the corporation must file Articles of Dissolution with the West Virginia Secretary of State. Prior to filing, the corporation must cease conducting its business, notify creditors, and wind up its affairs. This winding up includes paying or making provision for all known debts and liabilities. The distribution of remaining assets must follow the statutory order, generally prioritizing creditors and then distributing any remaining assets to one or more exempt organizations or for other exempt purposes, as specified in the articles of incorporation or by the members, in accordance with federal and state tax-exempt status requirements. Therefore, the correct procedural step after member approval and before filing Articles of Dissolution, when liabilities exist, is to satisfy all known debts and liabilities.

The West Virginia Uniform Prudent Management of Institutional Funds Act (UPMIFA), codified in West Virginia Code Chapter 36, Article 14, governs the management and investment of institutional funds, which includes endowments held by nonprofit organizations. A key provision of UPMIFA addresses the concept of “historic dollar value.” Historic dollar value is defined as the fair value in dollars of an initial gift plus the fair value in dollars of all subsequent gifts received by the fund, minus all total expenditures from the fund. This value serves as a baseline for determining whether an endowment fund has experienced a net depreciation or appreciation. Under UPMIFA, a nonprofit organization may expend so much of an endowment fund as the organization determines is prudent for the uses and purposes of the fund, provided that the expenditures do not cause the fund to fall below its historic dollar value. This safeguard ensures that the principal of the endowment, as measured by its original value adjusted for contributions and expenditures, is preserved. Therefore, if an endowment fund’s current fair value is \$500,000, and its historic dollar value is \$600,000, the organization cannot expend any funds, as doing so would reduce the fund below its historic dollar value. The calculation to determine the maximum spendable amount is: Current Fair Value – Historic Dollar Value. In this scenario, \$500,000 – \$600,000 = -\$100,000. Since the result is negative, no expenditure is permissible without potentially impairing the historic dollar value.

In West Virginia, a nonprofit corporation’s ability to merge with another entity is governed by specific statutory provisions designed to protect the interests of members, creditors, and the public. The West Virginia Nonprofit Corporation Act, particularly Chapter 31E of the West Virginia Code, outlines the procedures for mergers. A merger typically requires approval from the board of directors and, depending on the nonprofit’s bylaws and the nature of the merger, may also necessitate approval from the members. The Act specifies that a plan of merger must be adopted by the board of directors, detailing the terms and conditions of the merger, the manner of converting the interests of members or other stakeholders, and any amendments to the articles of incorporation of the surviving or new corporation. Following board approval, the plan is usually submitted to the members for their vote. The required vote threshold is often a supermajority, such as two-thirds of the votes cast by members entitled to vote, unless the articles of incorporation or bylaws specify a different percentage. The dissenting members, if any, may have appraisal rights, allowing them to receive the fair value of their interest in the corporation. Public notice or notification to relevant state agencies might also be required depending on the type of nonprofit and the nature of the merger. For instance, if the nonprofit is a charity, the West Virginia Attorney General’s office may need to be notified or provide consent, particularly if the merger involves a significant change in the organization’s mission or assets. The primary goal of these procedural safeguards is to ensure that such significant corporate actions are undertaken in a manner that is fair, transparent, and in the best interest of the nonprofit’s mission and its stakeholders.

The West Virginia Uniform Prudent Management of Institutional Funds Act (WV UPMIFIA), codified in West Virginia Code Chapter 36, Article 2, governs the management and investment of institutional funds held by nonprofit organizations. A key provision relates to the delegation of investment functions. Section 36-2-5 outlines the permissible delegation of investment and management functions by an institutional fund’s governing board. Specifically, a governing board may delegate investment functions to an agent, which can include a bank, trust company, investment advisor, or other entity with demonstrated expertise in managing institutional assets. The delegation must be made with reasonable care in selecting the agent, establishing the scope and terms of the delegation, and periodically reviewing the agent’s performance. The statute emphasizes that delegation does not relieve the governing board of its fiduciary duties. The question probes the specific statutory allowance for delegation of investment management functions by a West Virginia nonprofit, referencing the WV UPMIFIA as the governing legal framework. The correct option reflects the statutory allowance for delegation to a qualified agent, a core principle of prudent fund management under the Act.

The West Virginia Uniform Prudent Management of Institutional Funds Act (WV UPMIFA), codified in West Virginia Code Chapter 36, Article 2, governs the management and investment of institutional funds held by nonprofit organizations. A key aspect of this act is the concept of “expenditure” from an endowment fund. An expenditure is generally permissible if it is consistent with the organization’s mission and the terms of the endowment, and if the fund has a net appreciation. WV UPMIFA defines net appreciation as the amount by which the fair value of an endowment fund exceeds the historical dollar value of the fund. Historical dollar value is the aggregate of (1) the fair value of endowment fund assets at the time they first became endowment funds, (2) subsequent donations of realized gains, and (3) any amounts transferred into the fund from other endowments. For an expenditure to be prudent and lawful under WV UPMIFA, the organization must consider factors such as the duration of the endowment, the purpose of the endowment, the general economic conditions, the possible effect of inflation and deflation, the expected total return from income and the appreciation of investments, other resources of the institution, and the policies of the institution. Therefore, an expenditure is permissible if it is for the stated purpose of the endowment, the fund has experienced net appreciation, and the expenditure is prudent considering all relevant factors.

The West Virginia Code, specifically Chapter 35, addresses religious, charitable, and educational corporations. Section 35-2-1 outlines the process for incorporating such entities, requiring a certificate of incorporation to be filed with the Secretary of State. This certificate must contain specific information, including the name of the corporation, its purpose, the names and addresses of its initial directors, and a statement that the corporation will not issue stock or declare dividends. The question focuses on a critical procedural step for a nonprofit seeking to operate in West Virginia: the initial filing requirement. The correct answer reflects the statutory mandate for filing the certificate of incorporation with the West Virginia Secretary of State, as stipulated by West Virginia Code § 35-2-1. Other options present plausible but incorrect alternatives. Filing with a county clerk is generally for business entities, not state-level nonprofit incorporation. Obtaining a federal tax exemption under Section 501(c)(3) of the Internal Revenue Code is a subsequent step after state incorporation. Filing with the West Virginia Tax Commissioner is relevant for tax matters but not the primary act of establishing the legal entity itself.

The West Virginia Uniform Prudent Management of Institutional Funds Act (UPMIFA), codified in West Virginia Code Chapter 36, Article 2A, governs the management and investment of institutional funds, which includes funds held by nonprofit organizations. A key provision of UPMIFA addresses the concept of “historic dollar value.” Historic dollar value is defined as the fair value in dollars of an endowment fund at the time it was donated to the institution, or at another time specified by the donor, plus the net appreciation realized from the investment of the fund. Importantly, UPMIFA allows for the spending of amounts above the historic dollar value, provided that the spending is prudent and consistent with the organization’s mission and the terms of the endowment. However, spending below the historic dollar value would constitute a violation of the endowment’s principal. The question asks about the minimum amount that can be spent from an endowment fund without violating its principal. This minimum amount is precisely the historic dollar value. Therefore, if an endowment fund has a historic dollar value of $500,000, the organization can spend any amount up to $500,000 above this value, but spending any portion of the $500,000 itself would impair the principal. Thus, the maximum amount that can be spent from the fund without impairing its principal is the historic dollar value.

The West Virginia Uniform Prudent Management of Institutional Funds Act (WV UPMIFA), codified in West Virginia Code Chapter 36, Article 2, governs the management and investment of institutional funds held by nonprofit organizations. A key aspect of WV UPMIFA is the concept of “total return,” which allows for the use of both income and capital appreciation for expenditures, provided certain conditions are met. When an organization wishes to spend from an endowment fund, it must consider the prudence standard, the purpose of the endowment, and the duration of the endowment. Specifically, WV UPMIFA requires that expenditures from an endowment be prudent and consistent with the donor’s expressed intention. The Act permits an organization to appropriate for expenditure so much of any amount of the endowment fund as the organization determines to be prudent. This determination must consider factors such as the duration and preservation of the endowment, the purposes of the organization and the endowment, general economic conditions, the possible effect of inflation, the expected total return from the endowment, and other resources of the organization. The prudent investor rule, as incorporated by WV UPMIFA, mandates that a trustee or manager of an endowment must act with the care, skill, and caution that a prudent person familiar with such matters would use in similar circumstances. The Act also allows for the delegation of investment and management functions, but the ultimate responsibility remains with the governing board. It is crucial to note that WV UPMIFA does not mandate a specific percentage for spending; rather, it emphasizes a prudent determination based on the specific circumstances of the fund and the organization. Therefore, the ability to spend from an endowment is not automatic and requires careful consideration of the Act’s provisions and the organization’s fiduciary duties.

In West Virginia, a nonprofit corporation seeking to dissolve must follow specific statutory procedures to ensure a proper winding up of its affairs. The West Virginia Nonprofit Corporation Act, specifically Chapter 31E of the West Virginia Code, outlines these requirements. A voluntary dissolution typically begins with a resolution adopted by the board of directors. This resolution must then be submitted to the members for approval. The required vote for member approval of dissolution is generally two-thirds of the votes cast by members entitled to vote thereon, unless the articles of incorporation or bylaws specify a different voting threshold, provided it is not less than a majority of all votes entitled to be cast. Once approved, the corporation must file Articles of Dissolution with the West Virginia Secretary of State. Prior to filing, the corporation must cease conducting its business except as necessary for winding up, notify creditors, collect assets, pay liabilities, and distribute remaining assets to designated recipients, typically other nonprofit organizations with similar purposes, or as otherwise provided by law or the articles of incorporation. The question asks about the initial step required by West Virginia law for a nonprofit to initiate voluntary dissolution. This initial step involves the board of directors formally proposing the dissolution.

The West Virginia Secretary of State’s office oversees the registration and ongoing compliance of nonprofit corporations. When a nonprofit corporation in West Virginia wishes to change its name, it must formally amend its Articles of Incorporation. This amendment process requires filing a specific document with the Secretary of State. The relevant statute governing this is West Virginia Code §31E-10-1001, which details the procedures for amending articles of incorporation. The filing fee for such amendments is established by administrative rule, typically found in the Code of State Rules, Title 142, Series 1. As of the current administrative rules, the fee for filing an amendment to the articles of incorporation is $25. This fee is paid to the Secretary of State’s office at the time of filing the amendment. The process ensures that the public record accurately reflects the current legal name of the nonprofit organization.

In West Virginia, a nonprofit corporation that is incorporated under Chapter 35 of the West Virginia Code and intends to operate as a public charity or a private foundation under federal tax law, must adhere to specific state-level reporting and governance requirements. While the Internal Revenue Code (IRC) governs federal tax exemption, West Virginia law also imposes its own obligations. The West Virginia Secretary of State’s office is the primary state agency for the registration and oversight of nonprofit corporations. Annual reports are a critical component of maintaining active status. These reports provide an update on the organization’s leadership, registered agent, and basic operational information. Failure to file these reports can lead to administrative dissolution. Furthermore, West Virginia law, mirroring federal guidelines for public charities, often requires that a significant portion of an organization’s activities and funding be directed towards its charitable purpose, with limitations on private benefit and inurement. The specific filing requirements and the nature of the information submitted in annual reports are detailed in West Virginia Code §35-5-4 and §35-5-5. These statutes outline the necessity of providing current board member information and confirmation that the corporation continues to operate in accordance with its stated charitable mission. The annual report is a mechanism for the state to ensure that entities claiming nonprofit status are actively fulfilling their public benefit purposes and are compliant with state corporate law.

The West Virginia Nonprofit Corporation Act, specifically Chapter 35 of the West Virginia Code, outlines the procedures for the dissolution of nonprofit corporations. When a nonprofit corporation in West Virginia decides to dissolve voluntarily, it must follow a specific process to ensure that its assets are distributed appropriately and that the dissolution is legally recognized. The Act requires that a plan of dissolution be adopted. For corporations with members, this plan is typically approved by the members. For corporations without members, or where the articles of incorporation or bylaws specify, the board of directors may adopt the plan. Following adoption, the corporation must file Articles of Dissolution with the West Virginia Secretary of State. This filing formally signals the intent to dissolve and allows the corporation to cease its activities and begin winding up its affairs. The winding-up process involves settling debts, liquidating assets, and distributing any remaining property. Crucially, according to West Virginia Code §35-5-11, any remaining assets after the satisfaction of liabilities and obligations must be distributed to one or more qualified organizations engaged in activities substantially similar to those of the dissolving corporation, or to any other organization or organizations 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. This ensures that the charitable purpose for which the nonprofit was established continues to be served. The filing of the Articles of Dissolution with the Secretary of State is the critical legal step that initiates the formal dissolution process under West Virginia law.

The West Virginia Uniform Prudent Management of Institutional Funds Act (UPMIFA), as codified in West Virginia Code Chapter 36, Article 7, governs the management and investment of institutional funds held by nonprofit organizations. A key aspect of UPMIFA is the concept of “historic dollar value.” Historic dollar value represents the fair market value of an endowment fund at the time it was established or the fair market value of a subsequent donation to the fund. It serves as a baseline to ensure that the principal of an endowment fund is preserved over time, protecting against erosion due to inflation or imprudent spending. When an organization considers spending from an endowment, it must ensure that the spending does not cause the fund to fall below its historic dollar value, unless the endowment document explicitly permits otherwise or the organization has followed specific procedures for modifying or terminating the endowment. This preservation of the original corpus is fundamental to the long-term sustainability of endowed charitable assets. The calculation of available spending involves determining the current fair market value of the fund and comparing it to its historic dollar value, along with considering other factors like the endowment’s purpose, the age and duration of the fund, and the reasonable needs of the organization. Specifically, if the current fair market value of an endowment fund is \$1,000,000 and its historic dollar value is \$800,000, and the organization wishes to spend \$50,000, this spending would be permissible as it would not cause the fund to fall below its historic dollar value. The remaining value would be \$950,000, which is still above the \$800,000 historic dollar value.