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Dissolution of an Organization


Guest P. Wanger
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I have been called in to consult on an independent church that is dissolving after 105 years and merging with another similar church in the city.  When they first incorporated, state law did not require a dissolution article in the bylaws, so none was added.  RONR11 is vague on the topic, other than saying to follow state laws regarding the dissolution.

The church is consulting with an attorney regarding the assets, liabilities, etc.

State laws say that the body of the corporation (as a non-stockholding corporation) must vote on the dissolution.

My questions:  1) Would this be a resolution vote, subject to the regulations of the church's bylaws on amending the bylaws?  2) If it is not an amendment vote, is this treated as a regular motion or a privileged motion? 3) Can the motion be properly amended?

I'm sure additional questions will come up...

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3 minutes ago, Guest P. Wanger said:

I have been called in to consult on an independent church that is dissolving after 105 years and merging with another similar church in the city.  When they first incorporated, state law did not require a dissolution article in the bylaws, so none was added.  RONR11 is vague on the topic, other than saying to follow state laws regarding the dissolution.

The church is consulting with an attorney regarding the assets, liabilities, etc.

State laws say that the body of the corporation (as a non-stockholding corporation) must vote on the dissolution.

My questions:  1) Would this be a resolution vote, subject to the regulations of the church's bylaws on amending the bylaws?  2) If it is not an amendment vote, is this treated as a regular motion or a privileged motion? 3) Can the motion be properly amended?

I'm sure additional questions will come up...

1-2). A motion to dissolve has the same requirements as a motion to amend the bylaws.

3.) Yes. The motion to dissolve generally includes details such as how the society's assets will be disposed of, and such details may be amended.

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You say the church is dissolving, but you also say that it is merging with another church. Mergers and dissolutions are not at all the same, and the procedures to be followed are not the same.

The church will want to pay close attention to the advice it receives from its attorney in this regard.

 

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4 hours ago, Daniel H. Honemann said:

You say the church is dissolving, but you also say that it is merging with another church. Mergers and dissolutions are not at all the same, and the procedures to be followed are not the same.

The church will want to pay close attention to the advice it receives from its attorney in this regard.

 

Beyond RONR, there may be "denominational" differences and distinctions between taking in a "dissolved" church and "merging one" in. In addition to a civil attorney, someone skilled and experienced in church denominational issues could be helpful.

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Clarification: In the classic sense, this is not a merger.  The congregation and its corporation (as defined by state law) is being dissolved.  The assets and membership are being absorbed by another church of the same denomination (independent Christian Churches).  The situation is almost like a takeover, but the dissolving church initiated it.

Mr. Martin's comments lead to a different quandary: The Bylaws cede all authority to the Board of Elders, but state law does state that a membership vote must be taken to dissolve the corporation. Am I correct in my understanding that the situation then requires two votes--one of the Elders, and one of the congregation?  How then would I advise them if the votes do not go the same way (Elders vote to dissolve, congregation does not)?

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1 hour ago, P. Wanger said:

Clarification: In the classic sense, this is not a merger.  The congregation and its corporation (as defined by state law) is being dissolved.  The assets and membership are being absorbed by another church of the same denomination (independent Christian Churches).  The situation is almost like a takeover, but the dissolving church initiated it.

Mr. Martin's comments lead to a different quandary: The Bylaws cede all authority to the Board of Elders, but state law does state that a membership vote must be taken to dissolve the corporation. Am I correct in my understanding that the situation then requires two votes--one of the Elders, and one of the congregation?  How then would I advise them if the votes do not go the same way (Elders vote to dissolve, congregation does not)?

Once again, I highly recommend that the church address questions of this nature to its lawyer, and I gather you are not its lawyer.

State law often provides that the board of directors must first vote to declare dissolution of the corporation advisable, and then the membership must vote on the question as to whether or not to dissolve the corporation, but since I'm not the church's lawyer either, no one ought to be asking me. :)   

 

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On 3/3/2017 at 6:14 AM, Daniel H. Honemann said:

Once again, I highly recommend that the church address questions of this nature to its lawyer, and I gather you are not its lawyer

We meet with the lawyer on Tuesday...and no, I'm not a lawyer, I'm a high school math teacher who has a passion for parliamentary issues.

 

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On 3/4/2017 at 3:51 PM, Joshua Katz said:

Did you know that the NAP holds student competitions?  It might be fun to see if any students want to form a team that you can coach.

Did not recall that...I'm already the academic competitions coach and NHS sponsor, so that might add just a touch too much for the plate.

 

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