How to Dissolve a Washington Nonprofit Corporation the Right Way

How to Dissolve a Washington Nonprofit Corporation

Nonprofits are formed with passion and purpose, but sometimes the best decision for the organization, and the community it serves, is to wind things down.

A nonprofit may reach the end of its useful life because of funding challenges, leadership transitions, the completion of its mission, declining participation, or the availability of another organization better positioned to carry the work forward. Whatever the reason, dissolving a Washington nonprofit requires more than simply stopping operations or allowing the corporation’s registration to lapse.

The Washington Nonprofit Corporation Act, Chapter 24.03A RCW, establishes a formal process for authorizing dissolution, addressing creditors, obtaining approval for the disposition of charitable assets, and filing Articles of Dissolution. The Act took effect in 2022 and introduced more detailed requirements governing charitable assets and plans of distribution.

Following the proper process protects the organization’s mission, its charitable assets, and the directors responsible for overseeing the wind-up.

Here is an overview of the principal steps.

Step 1: Review the Governing Documents and Current Obligations

Before voting to dissolve, review the nonprofit’s:

Articles of Incorporation and amendments;
bylaws;
gift agreements and donor restrictions;
grants and government contracts;
leases and other material contracts;
employment and benefit obligations;
pending or threatened claims;
insurance policies, including directors and officers coverage;
tax filings and reporting history; and
current balance sheet and asset records.

The articles and bylaws may impose approval requirements beyond the statutory minimum. They may also contain a dissolution clause identifying the permissible recipients of the organization’s remaining assets.

The board should also determine whether the organization is a membership corporation and, if so, whether any members have the right to vote on dissolution. That distinction affects the required approval process.

Step 2: Authorize the Dissolution

Unless the articles or bylaws require a greater vote, dissolution of a nonprofit that has no members entitled to vote on dissolution may generally be authorized by a majority of the directors then in office.

If the corporation has members entitled to vote on dissolution, the board must submit the proposal to those members. Unless the governing documents require a greater vote, approval generally requires a majority of the members entitled to vote at a meeting where a quorum is present. Members who are not entitled to vote must still receive notice of the meeting and information about how the corporation’s assets will be distributed or how the distribution will be determined.

The board’s dissolution resolutions should generally:

authorize the dissolution;
explain the reasons for winding down;
approve or direct the preparation of a proposed plan of distribution;
authorize applications for tax and revenue clearances;
authorize appropriate officers to communicate with the Attorney General;
authorize the filing of Articles of Dissolution when the statutory conditions have been satisfied; and
assign responsibility for the operational wind-up.

A board can authorize dissolution before every wind-up task is complete, but the organization should avoid making premature distributions or filing inaccurate certifications.

Step 3: Prepare a Detailed Plan of Distribution

A Washington nonprofit holding property for charitable purposes must prepare a plan governing the distribution of those assets.

The plan should be based on an up-to-date inventory of the organization’s assets and liabilities. It should identify not merely the general type of recipient, but what the organization owns, whether the property is restricted, and how the property will be handled.

Under RCW 24.03A.908, the plan must briefly describe:

real property held for charitable purposes, including its nature and location;
cash, bank deposits, brokerage accounts, and other financial assets, including their approximate total fair market value;
other personal property held for charitable purposes, including its nature and approximate total fair market value; and
any gift restrictions applicable to those assets and the nature of the restrictions. (app.leg.wa.gov)

A useful plan may also address:

known liabilities and anticipated wind-up expenses;
reserves for taxes, professional fees, claims, and contingencies;
restricted grants or donations;
property subject to a right of return or reversion;
intellectual property, websites, donor lists, records, and digital assets;
the proposed charitable recipient or recipients;
the amount, percentage, or category of property each recipient will receive; and
how each proposed transfer advances a charitable purpose consistent with the articles and applicable restrictions.

The plan does not necessarily need an appraisal of every office chair or minor item, but it should provide enough information for the board and the Attorney General to evaluate the proposed disposition.

Step 4: Identify and Respect Restricted Assets

Not every asset may be placed into a single unrestricted pool.

Before approving distributions, the nonprofit should determine whether any property is subject to:

a donor-imposed purpose restriction;
a time restriction;
a grant agreement;
an endowment restriction;
a charitable trust;
a condition requiring return or transfer upon dissolution;
a naming or use restriction; or
another binding gift-instrument term.

Restricted charitable property generally must continue to be used for the applicable restricted purpose. A dissolution does not automatically eliminate a donor restriction. Washington law expressly provides that dissolution does not modify a gift restriction unless it is modified in accordance with the applicable statutory process.

If complying with a restriction has become impossible, impracticable, unlawful, or wasteful, the nonprofit may need donor consent, Attorney General involvement, or judicial relief. Those issues should be resolved before the asset is distributed.

Step 5: Notify the Washington Attorney General Before Adopting the Plan

This is one of the most important procedural requirements under the revised Washington Nonprofit Corporation Act.

A nonprofit holding charitable property must give the Attorney General notice of its intent to dissolve. The notice must include:

a copy of the proposed plan of distribution; and
the names and telephone numbers of individuals available to answer questions regarding the dissolution and proposed plan.

The notice must be delivered at least 20 days before the meeting at which the proposed plan will be adopted. The timing therefore relates to the adoption of the plan, not merely to the later filing of Articles of Dissolution.

The Attorney General may approve the plan, request additional information, or issue an objection. If the Attorney General does not deliver a written objection within 20 days after receiving the notice, approval is deemed to have been given. If the Attorney General timely objects, however, the organization should not implement the plan unless and until the objection is withdrawn, approval is provided, or court approval is obtained in a proceeding involving the Attorney General.

Although not expressly listed as mandatory components of every initial notice, it may be helpful to submit or have available:

the most recent Form 990;
the Articles of Incorporation and amendments;
the bylaws;
a current balance sheet;
documentation of material donor restrictions;
information about the proposed recipient organizations; and
contact information for someone familiar with the organization’s finances and operations.

Providing a complete and organized submission can reduce follow-up questions and delays.

Step 6: Adopt the Plan of Distribution

After the required advance notice to the Attorney General, the plan must be formally adopted.

If the corporation has no voting members, the plan is generally adopted at a board meeting by a majority of the directors in office. If members have voting rights, the board recommends the plan and submits it to the members for approval.

The minutes or written consent should clearly identify the version of the plan being approved. If the plan changes materially during the Attorney General’s review, the board—and, when applicable, the voting members—should approve the final version.

Step 7: Address Debts, Contracts, Employees, and Claims

Before distributing the remaining assets, the organization must pay, satisfy, or make adequate provision for its known liabilities and obligations. Charitable assets should not be transferred away while valid creditor claims and wind-up expenses remain unaddressed.

The wind-up process may include:

collecting accounts receivable;
paying vendors and creditors;
terminating leases and contracts;
complying with grant closeout requirements;
paying final wages and reimbursable expenses;
addressing accrued vacation or paid-time-off obligations;
making required payroll and tax deposits;
providing any legally required employee notices;
maintaining appropriate insurance coverage;
preserving corporate, financial, employment, and donor records; and
reserving sufficient funds for legal, accounting, tax, storage, filing, and other wind-up costs.

After the Articles of Dissolution become effective, the corporation must give notice of dissolution to known claimants within 30 days. Washington law also provides procedures for specifying a claim deadline and, optionally, publishing notice for other or unknown claims. Directors must cause the dissolved corporation to discharge or make reasonable provision for claims before distributing assets under the plan.

The claims process deserves individualized legal review, particularly if litigation is pending, threatened, contingent, or reasonably anticipated.

Step 8: Obtain a Washington Revenue Clearance Certificate

Before filing Articles of Dissolution, a Washington nonprofit corporation must obtain a Revenue Clearance Certificate from the Washington State Department of Revenue.

The application generally requires information about:

the corporation’s legal name and UBI number;
its Washington business address and activities;
the date and reason it ceased operations;
whether all applicable tax returns have been filed and taxes paid;
successor information, if applicable;
a contact person; and
where the clearance certificate should be sent.

All applicable returns should be filed and amounts due paid through the organization’s closing date. The Department of Revenue issues the certificate after completing its review.

The certificate must accompany the Articles of Dissolution submitted to the Secretary of State.

Because obtaining the certificate can take time, the organization should begin this process early rather than waiting until every other wind-up step is complete.

Step 9: File Articles of Dissolution

After dissolution has been properly authorized and the requirements applicable to the charitable plan of distribution have been satisfied, the corporation may file Articles of Dissolution with the Washington Secretary of State.

The filing must include the Revenue Clearance Certificate. It must also state, among other things:

the corporation’s name;
its date of incorporation;
the effective date of dissolution;
whether it is a membership corporation;
how the dissolution was authorized;
whether it is charitable or holds property for charitable purposes;
that the Attorney General approved or is deemed to have approved the plan of distribution, when applicable; and
that the remaining net assets have been or will be distributed in accordance with the governing documents and adopted plan.

As of October 2026, the Secretary of State indicates that domestic nonprofit Articles of Dissolution are submitted by mail or in person rather than through the online filing system. The filing itself has no standard filing fee, although expedited processing carries an additional charge.

The corporation is dissolved on the effective date of its Articles of Dissolution. Dissolution does not immediately erase the corporation or prevent it from handling remaining wind-up matters. The corporation continues to exist for limited purposes such as collecting assets, disposing of property, addressing liabilities, making authorized distributions, and completing other necessary wind-up actions.

Step 10: Distribute the Remaining Assets

After payment or adequate provision for liabilities, the remaining assets must be distributed in accordance with:

the Articles of Incorporation;
the bylaws;
the approved plan of distribution;
applicable donor and grant restrictions;
state charitable trust principles; and
federal tax-exemption requirements.

For a charitable corporation, unrestricted charitable assets generally must remain dedicated to charitable purposes. Permissible recipients may include entities operated exclusively for charitable purposes or governmental entities receiving the assets for a public purpose. Restricted property must generally remain subject to its restrictions unless those restrictions are properly modified. (app.leg.wa.gov)

Directors, officers, founders, members, and other insiders may not receive an improper financial benefit from the dissolution. This does not prevent the organization from paying reasonable compensation for legitimate services rendered during the wind-up. (app.leg.wa.gov)

For each distribution, retain records showing:

the recipient’s legal name and address;
its tax status or governmental status;
the property transferred;
the property’s fair market value;
the transfer date;
applicable restrictions; and
the recipient’s acknowledgment or receipt.

Step 11: Complete Federal Tax Filings

A dissolving tax-exempt organization must generally file a final Form 990-series return for the year in which it terminates.

The appropriate filing may be Form 990, Form 990-EZ, Form 990-PF, or Form 990-N, depending on the organization’s status and filing requirements. A Form 990 or Form 990-EZ filer generally must mark the return as final and complete Schedule N, which requests information about the liquidation, dissolution, asset transfers, transaction costs, asset values, and recipients. The IRS may also require copies of the dissolution documents, resolutions, and plan. (irs.gov)

An EIN is permanent and is not literally canceled or reassigned. The organization should notify the IRS of its termination through the proper final return and complete any additional account-closing steps appropriate to its circumstances.

The nonprofit should coordinate with its accountant or tax adviser concerning the final return, payroll filings, employment tax deposits, information returns, and any other federal reporting obligations.

Step 12: Close Out Remaining Operations

The final administrative steps may include:

closing bank, investment, merchant, and payment-processing accounts;
canceling state and local licenses and permits;
withdrawing charitable registrations in other states;
canceling insurance policies at the appropriate time;
terminating website, software, telephone, and subscription services;
securing or transferring corporate records;
addressing confidential employee, donor, and client information;
notifying donors, funders, volunteers, partners, and beneficiaries;
updating the organization’s mailing address;
preserving access to email and financial records; and
designating a responsible person to receive post-dissolution correspondence.

Do not close every account immediately. The organization may need an operating account, insurance, email access, document storage, or mail service while final tax returns, claims, and distributions are being completed.

Common Dissolution Mistakes

Common problems include:

allowing the corporation to become administratively dissolved instead of completing a voluntary dissolution;
failing to determine whether members have voting rights;
giving the Attorney General notice only after the plan has already been adopted;
distributing assets before paying or reserving for liabilities;
assuming all charitable funds are unrestricted;
transferring restricted assets to a recipient that cannot honor the restriction;
filing the Articles of Dissolution without a Revenue Clearance Certificate;
closing bank accounts before outstanding checks, taxes, and professional fees are resolved;
failing to notify known claimants after filing the Articles of Dissolution; and
neglecting the final Form 990 and Schedule N.

Final Thoughts

Dissolving a Washington nonprofit is not simply a matter of filing a form. It is a coordinated governance, charitable-assets, creditor, tax, employment, and operational process.

The board should begin by reviewing the governing documents, understanding the organization’s assets and obligations, and creating a realistic wind-up budget and timeline. For nonprofits holding charitable property, particular attention should be given to the content and timing of the plan of distribution and the Attorney General review process.

Handled carefully, dissolution can preserve the organization’s legacy, direct its remaining resources toward appropriate charitable purposes, and reduce unnecessary exposure for directors and officers.

Ellis Carter is a nonprofit lawyer with Caritas Law Group, P.C. licensed to practice in Washington and Arizona. Ellis advises nonprofit and socially responsible businesses on federal tax and fundraising regulations nationwide. Ellis also advises donors concerning major gifts. To schedule a consultation with Ellis, call 602-456-0071 or email us through our contact form.