Charities, Nonprofits & Fundraisers

Transactions frequently asked questions (FAQs)


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 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.

Sales of assets

There is no arithmetic test for determining how much is "substantially all." We use a commonsense 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 the Religious Corporations Law (RCL) section 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 a limited-liability company (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 section 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. The 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 section 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 section 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 section 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 use 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 that 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 do one of the following:

  • follow the procedures set forth in Article 10 of the N-PCL for the dissolution of a corporation with assets
  • seek court approval via N-PCL sections 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 sections 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 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 Office of the New York State Attorney General 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 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 section 201(b) for descriptions of the different corporate types).

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

No. However, the dissolving corporation will have 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.