Dissolution of Organization

[PKR]

We are a Organization comprised of State Departments and Units within the State.  One of our State Departments has voted to dissolve with no effective date for the dissolution.  It is our standard procedure that upon dissolution the property of the organization is turned over to our National Office.  The instructions state that the Treasurer is to close the bank accounts and Cashier's Checks payable to the National Organization be issued for the balance in the accounts.  The National Organization must hold these funds for a period of 18 months in anticipation of reactivation of the Charter.

At what point was the vote to dissolve effective and once this vote was taken, did the members have the right to disburse the funds of the organization? 

[Richard Brown]

On 10/21/2021 at 10:01 AM, PKR said:

We are a Organization comprised of State Departments and Units within the State.  One of our State Departments has voted to dissolve with no effective date for the dissolution.  It is our standard procedure that upon dissolution the property of the organization is turned over to our National Office.  The instructions state that the Treasurer is to close the bank accounts and Cashier's Checks payable to the National Organization be issued for the balance in the accounts.  The National Organization must hold these funds for a period of 18 months in anticipation of reactivation of the Charter.

At what point was the vote to dissolve effective and once this vote was taken, did the members have the right to disburse the funds of the organization? 

Unless there is some law or rule to the contrary, the vote to dissolve was effective immediately upon the chair announcing the result of the vote.  Therefore, it is my opinion that the funds should be disbursed forthwith pursuant to the adopted motion or resolution.  There might be some other controlling law or rule permitting or requiring a delay, but there is no such rule in RONR.

Edited to add:  For more information on when a vote becomes effective, see RONR (12th ed.) Sections 4:41 - 4:48, particularly section 4:43, and also section 10:41.

 

Edited October 21, 2021 at 03:57 PM by Richard Brown
Added last paragraph