Frequently Asked Questions

For Charities, Non-Profits & Fundraisers

Governance - Duties of Board Members

 A board member is entitled to inspect the corporation's books and records and may ask to see its financial reports.

The board of directors must approve the compensation of officers by the affirmative vote of a majority of the entire board, unless the corporation's by-laws provide that it may be approved by a committee of the board. A charity is authorized to pay reasonable compensation commensurate with the services performed. While there is no set process which boards must follow in approving compensation, the best practice is for compensation to be determined by an authorized body, such as a compensation committee, composed entirely of people who are impartial and do not have a financial stake in the outcome. The authorized body should obtain and rely on information as to comparability of the officer's salary to salaries paid to officers in similar positions at comparable charities, and the authorized body should document the process and basis for its determination. Compensation includes all forms of benefit provided by corporation, not just salary, and the board should be sure to look at the officer's entire compensation package. The Internal Revenue Service encourages charities to follow the procedures set out in section 4958 of the Internal Revenue Code and Treasury Regulation section 53.4958-6. They are described generally on the IRS website at

A corporation formed in New York must have at least three board members.

New York law provides that willful failure of the corporation to file a report required by law shall constitute a breach of the director's duty to the corporation. The board should make sure that the corporation is filing all its required reports including its filings with the Attorney General's Charities Bureau, the Internal Revenue Service, including both its Forms 990 and employee-related reporting.

A corporation is obligated to keep, at the office of the corporation, correct and complete minutes of all meetings, including those conducted face to face and over the telephone, of its members, board and executive committee, if any.

Charities, other than those established as education corporations, are not permitted to lend money to their officers and directors, even if they have good business reasons for wanting to make the loan.

Now that you have learned about the embezzlement, you are obligated as fiduciaries to make reasonable efforts to recover money from the embezzler and to refer the matter to the criminal authorities for possible criminal prosecution. If the corporation has insurance, you should report the loss to your carrier. As fiduciaries responsible for the fiscal administration of your charity, the board should review its internal controls and investigate how the embezzler was got away with the embezzlement. You may need to institute changes to ensure that the charity will not be a victim of embezzlement in the future. You are also encouraged to report the embezzlement to the Attorney General's Charities Bureau.

The board must apply all assets received in accordance with the provisions set out in the gift instrument. The board must ensure that accurate accounts are kept of such assets, separate and apart from the accounts of other assets of the corporation. Unless, the gift instrument provides otherwise, the corporation's treasurer must make an annual report to the board, or to the members of the corporation, if there are members, concerning the restricted, the use made of such assets and of the income thereof. The board should also ensure that the assets are invested in a manner that is appropriate to the purposes of the gift taking into consideration that corporation's overall investment policies and financial situation.


In a merger, two or more corporations combine into a single corporation and the resulting entity is one of the constituent corporations (corporation A merges into corporation B, with corporation B as the surviving corporation).  In a consolidation, two or more corporations combine into a single corporation and the resulting entity is a new corporation (corporation A and corporation B combine into new corporation C).

The merger application is filed in the county where the surviving or consolidated corporation is located, or in the county where the principal office of one of the New York constituent corporations is located.

The court application is made jointly by all of the constituent corporations in the form of a petition and/or joint affidavit.

Generally, the purposes and activities of the merging corporations should be similar and compatible.

If all of the constituent corporations are incorporated under the Religious Corporations Law, the merger is governed solely by the Religious Corporations Law.  Court approval is required but the Attorney General is not a party to the merger.  However, if one of the churches incorporated under the N-PCL or the Membership Corporations Law, then N-PCL Article 9 is applicable to the merger.

Only under limited circumstances.  A not-for-profit corporation may merge or consolidate into a business corporation, but only if the not-for-profit corporation is a Type A or Type C corporation.

No, but the mergers of Type A trade associations require approval from the Attorney General’s Antitrust Bureau.

Political Activities 

No. Organizations that are exempt from taxation under section 501(c)(3)of the Internal Revenue Code are absolutely prohibited from contributing to a candidate for office, a political party or a political action committee. An organization that violates this prohibition risks losing its tax exemption and may also be in violation of state law. Detailed information concerning the prohibition is posted by the Internal Revenue Service at Tax-Exempt-Organizations-Prohibition-From-Contributions .

Prohibited political contributions include: 
- Making a monetary contribution to a political candidate, party or action committee.
- Purchasing tickets to a fundraising event sponsored by a political candidate, party or action committee. 
- Paying for ads that support or honor a political candidate.
- Donating non-monetary items to a political candidate, party or action committee.
- Donating the use of an organization's services, premises, cars or equipment to a political candidate, party or action committee. 
- Allowing employees to volunteer for a political candidate, party or action committee during their working hours. They may, however, volunteer on their own time. 
- Reimbursing an officer, director, employee, agent, volunteer or other individual or entity for any political contribution.

An organization should adopt a policy and procedures to make sure that it does not make any political contributions and make sure that its staff understands the prohibition and follows the procedures.

Organizations that are exempt from taxation under section 501(c)(3) of the Internal Revenue Code are also absolutely prohibited from engaging in political activity that directly or indirectly supports a political party, political action committee or a candidate for office. That prohibition includes supporting a particular candidate or party in an election, urging others to support such candidate or party and hosting an event at which only some candidates for a particular office are offered an opportunity to speak.

501(c)(3) organizations may participate in non-partisan voter education programs as long as those programs are consistent with the organization's charitable purposes. For example, a 501(c)(3) organizations may host a Meet the Candidates program as long as all candidates for a particular office are given the opportunity to participate.

Registration and Annual Filing of Charities

Most organizations that hold property of any kind for charitable purposes or engage in charitable activities in New York State and/or solicit charitable contributions (including grants from foundations and government grants) in New York are required to register with the Attorney General’s Charities Bureau. Under New York law, charity is defined very broadly to include purposes such as education, relief of poverty, cultural programs, promotion of health and research to cure disease, and many other purposes that are beneficial to the community. Although most charitable organizations are required to register, the law exempts some, including religious organizations, from registering. If you believe that your organization may be exempt from the registration requirements, you will have an opportunity to claim an exemption when you fill out the online registration application.

- An EIN
- A Certificate of Incorporation or other organizing document
- Bylaws or other rules document

For a complete list, registrants should consult the online checklist detailing what is required to register prior to starting the application. 

Please note that the form requires two signatories: 
- The organization’s president or other authorized officer
- The chief financial officer, treasurer or other person with fiscal responsibility.
- The registrant will need their emails so the application can be sent for their review and e-signature.

Among the organizations exempt from registration are religious organizations (houses of worship) and other charitable organizations run by religious organizations; membership organizations that do not solicit from the public; Parent Teacher Associations, educational institutions that file annual reports with the New York State Department of Education; and governmental agencies.

Please refer to the Charities Annual Filing Checklist here.

Often members of a community collect money for a friend or neighbor who is ill or who has suffered a tragedy. Such funds are not charities and are exempt from registration as long as all of the contributions collected are paid to (or for the benefit of) the person for whom the money was collected.

You may designate up to three alternate beneficiaries, in case the person for whom you are collecting cannot use all of the funds collected. If you designated an alternate beneficiary, you should complete a form CHAR017 (Charitable Solicitation for the Relief of an Individual), which is posted on our Forms page and submit it to the Charities Bureau. Designating alternate beneficiaries will simplify distribution of excess funds and avoid a possible court proceeding to determine to whom such funds should be distributed. If you file form CHAR1017, you must advise potential contributors that the form has been filed with the Attorney General.

Sales of Assets

There is no arithmetic test for determining how much is substantially all. We use a common sense approach. If the asset in question constitutes most of the corporation's assets, court approval should be obtained. Even if the asset is a small percentage of the corporation's total assets, if the transaction will affect the ability of the corporation to carry out its corporate purposes it is considered to be substantial and court approval should be obtained. If the asset is the corporation's main premises or a house of worship, court approval should be obtained. When in doubt, it is prudent to obtain court approval.

No. However, certain financing transactions (such as Industrial Development Authority bond financing transactions) require the lease or conveyance of property serving as collateral for the loan. If such property constitutes all or substantially all of the corporation's assets, court approval is required for the transfer or lease in connection with the mortgage. Religious corporations require court approval under RCL § 12 for mortgages of any of its real property, unless the mortgage is a purchase money mortgage.

If the sale contract is to be assigned at or prior to closing, the assignment must be disclosed in the petition and order and the assignment agreement must be included as an exhibit. If the assignee is an LLC or other entity created by the purchaser for purposes of taking title at closing, these facts should be explained in the petition. If the assignee is an unrelated third party, new board and membership resolutions approving the assignment will be required.

Yes. RCL § 12 is applicable to any corporation that acts as a house of worship and meets for religious worship services, even if it incorporated under a different statute.

Kings County. Venue is determined by the county in which the corporation's principal office is located and where it carries out its corporate purposes.

In many cases, no. If a dormant church no longer has a congregation that can approve the proposed sale, it cannot meet the statutory requirement of obtaining a membership resolution approving the sale. In such cases, the church should dissolve pursuant to RCL § 18 and seek court approval for the sale of its real property as part of the dissolution proceeding. However, denominations that do not have voting memberships under the RCL can still proceed under RCL § 12.

No. The corporation must obtain its own independent appraisal valuing the property as of the contract date. Furthermore, the appraisal cannot be prepared by the real estate broker who handled the sale.

No. RCL § 12(8) provides that a religious corporation can sell real property to another religious, membership, educational, municipal or not-for-profit corporation for nominal consideration. However, the petitioner religious corporation must be solvent and there must be a showing that the claims of creditors will not be impaired. The petition should include a full explanation.

Simplified Dissolutions

A dissolving corporation may utilize the simplified dissolution procedure if it has no more than $25,000 in a reserve fund to pay for the costs of winding up its affairs (e.g., legal and accounting fees), including liabilities which do not exceed $10,000.

No. In such cases, the dissolving corporation must follow the procedures for the dissolution of a corporation with assets and obtain court approval for the distribution of its remaining assets to a charitable organization with substantially similar activities and purposes, even if the amount to be distributed is less than $25,000. 

No. If a dissolving corporation has remaining assets in excess of any reserve fund, it must either: (1) follow the procedures set forth in Article 10 of the N-PCL for the dissolution of a corporation with assets, or (2) seek court approval via N-PCL ''510 and 511 to sell or otherwise dispose of its remaining assets prior to filing a petition for a simplified dissolution. Grant-making private foundations can spend down their assets by making charitable grants to other tax-exempt organizations in the ordinary course of their operations. However, in order for a grant-making private foundation to transfer its assets to another private foundation, the dissolving foundation would need court approval either via an asset dissolution or a ''510/511 petition.

No. A corporation must have sufficient funds to pay all liabilities, which cannot exceed $10,000, in order to do a simplified dissolution. If the dissolving corporation has arranged for the reduction and/or forgiveness of any debts and liabilities with its creditors and can thereby qualify for a simplified dissolution, it should attach a copy of any relevant agreements as exhibits to its petition. Insolvent corporations must follow the procedures for a judicial dissolution as outlined in Article 11 of the N-PCL.

A corporation doing a simplified dissolution should file its Plan of Dissolution with our office after it has already carried out such plan, satisfied any of its remaining debts, and prepared a final financial report indicating a zero balance. As opposed to the procedures for the dissolution of a corporation with assets, the Attorney General's Office does not need to review or approve the Plan of Dissolution prior to its execution for the dissolution of a corporation with no assets. There need be no reference to carrying out the Plan of Dissolution in the Certificate of Dissolution if the dissolving corporation had no assets or liabilities when it adopted such plan.

The length of time of the Attorney General's review varies depending on the number and nature of the issues flagged by our office. We will contact you in writing or by telephone with any follow-up questions that we have. 

No. Generally, Type A corporations do not require court or Attorney General approval to dissolve and the simplified dissolution procedure is not applicable.However, dissolving Type A trade associations must get approval from the Attorney General's Antitrust Bureau. In addition, if a Type A corporation holds assets for Type B charitable purposes, or holds donor restricted funds, it must follow the procedures for an asset dissolution (see N-PCL ' 201(b) for descriptions of the different corporate types).

No. The dissolutions of religious corporations are governed solely by '18 of the Religious Corporations Law. Court approval is required but the Attorney General is not a party.

No. However, the dissolving corporation will need to submit a filing fee made payable to the New York Department of State when it files its original endorsed Certificate of Dissolution with the New York State Department of Taxation and Finance.