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Dissolve or Surrender a Nonprofit Corporation

Nonprofit California business entities doing or transacting business in California and incorporated or qualified with California Secretary of State (SOS) can dissolve or surrender to terminate their legal existence when they cease operations in California.

There are multiple ways a nonprofit corporation can dissolve or surrender. The best way to dissolve or surrender a corporation is through SOS.

We use the terms domestic and foreign corporation throughout this page.

  • Domestic corporations (those incorporated in California) legally dissolve.
  • Foreign corporations (those incorporated outside California) legally surrender.

All domestic public benefit, religious, and mutual benefit corporations that hold charitable assets in a trust should obtain a Dissolution Waiver from California Office of the Attorney General (AG).

Refer to AG’s publication,General Guide for Dissolving a California Nonprofit Corporation, at oag.ca.gov.

File the Dissolution Waiver and all other required documents with the California Secretary of State.

California Secretary of State (SOS) cannot accept termination documents if the entity is suspended or forfeited. If the entity is suspended or forfeited by FTB, you must complete all of the following FTB requirements before you submit your termination documents to SOS:

  • Pay all outstanding balances due.
  • File all delinquent returns.
  • File FTB 3557 BC, Application for Certificate of Revivor, (Banks and Corporations) or FTB 3557 E, Application for Certificate of Revivor, (Tax-Exempt Corporations).

To reinstate tax-exempt status, file FTB 3500, Exempt Application

FTB requirements

  • File all delinquent returns and pay all balances, including any penalties, fees, and interest.
  • File the final/current year return.
    • Check the applicable Final Return box on the return’s first page.
    • Write “final” at the top of the first page.
      • All returns remain subject to audit until the statute of limitations expires.
  • Cease doing or transacting business in California after the final taxable year.

Exceptions:

  • Corporations that request voluntary dissolution.
  • Corporations that we administratively dissolve or surrender.

Go to the California Secretary of State’s (SOS) website to get these forms.

Qualified taxable foreign and qualified foreign tax-exempt corporations

File a Certificate of Surrender of Right to Transact Intrastate Business.

Domestic taxable nonprofit corporations and domestic tax-exempt corporations

File one or more of the following forms as applicable:

  • Certificate of Election to Wind Up and Dissolve (Form ELEC NP).
  • Certificate of Dissolution (Form DISS NP).
  • Short Form Certificate of Dissolution – Nonprofit (Form DSF NP).
  • A Dissolution Waiver the California Office of the Attorney General provides.
    • For information regarding the letter or approval, call 916.445.2021.

Nonqualified tax-exempt organizations

If your tax-exempt organization did not incorporate or qualify in California, SOS does not require any action to dissolve or surrender. However, the organization must file a final return with us.

 

  • Tax-exempt corporations must file a final return. File the appropriate return:
    • Form 199, California Exempt Organization Annual Information Return
    • FTB 199N, Annual Electronic Filing Requirement for Small Exempt Organizations(California e-Postcard)
    • Form 109, Exempt Organization Business Income Tax Return
  • File the appropriate dissolution or surrender documents with California Secretary of State within 12 months of the filing date of your final return.

We don’t require tax-exempt churches, corporations that request voluntary dissolution, or corporations we administratively dissolve or surrender, to file a final return.

An officer, director, or authorized representative can submit a written request to abate unpaid qualified taxes, interest, and penalties before a qualified nonprofit corporation dissolves (California Revenue and Taxation Code Section 23156).

Qualified nonprofit corporation

A qualified nonprofit corporation that is not doing business and:

  • Was operating and previously obtained tax-exempt status with FTB and we revoked the status for failure to file a return or pay a balance due.
  • Was operating and previously obtained tax-exempt status with the Internal Revenue Service (IRS) and the IRS revoked the status for failure to file a return or notice.
  • Was never doing business after incorporation or qualification in California.

The qualified nonprofit corporation may file a FTB 3502, Nonprofit Corporation Request for Pre-Dissolution Tax Abatement. See the FTB 3502 Instructions for who can qualify. They have 12 months from the date they file FTB 3502 to complete the dissolution process with California Secretary of State (SOS).

We will notify the qualified nonprofit corporation and tell them they must complete the dissolution with SOS after we approve the FTB 3502. They must submit a copy of our notice with the appropriate SOS forms.

We will administratively dissolve or surrender a corporation that:

  • We suspended or forfeited for more than 48 continuous months.
  • Is no longer in business.
  • Has not filed returns for 4 or more years.
  • Has not filed a Statement of Information with California Secretary of State (SOS) for 4 or more years.

Administrative dissolution process

  • We send a notice to the nonprofit corporation’s last known address. If we do not have a valid address, we deem that posting on the SOS nonprofit corporation's website that the nonprofit corporation is administratively dissolved or surrendered is sufficient notification.
  • We send the SOS and the Office of the Attorney General, Registry of Charitable Trusts (AG), the pending administratively dissolved or surrendered nonprofit corporations’ names and SOS file numbers.
  • The SOS provides a 60-calendar day notice of the pending administrative dissolution or surrender on their website. They list the corporation name and the SOS file number.
  • If we receive no written objection before the 60 day period expires, the nonprofit corporation is administratively dissolved or surrendered.
  • We abate qualified tax, interest, and penalty liabilities upon administrative dissolution or surrender.
  • Liabilities to creditors do not discharge. Liabilities of the director or persons related to the administratively dissolved or surrendered nonprofit corporation do not discharge. A nonprofit corporation’s administrative dissolution or surrender shall not diminish or adversely affect the AG’s ability to enforce liabilities.

Objection to administrative dissolution or administrative surrender

If the nonprofit corporation objects to the administrative dissolution or surrender, they must notify us in writing.

Send the objection to:

EXEMPT ORGANIZATIONS UNIT
FRANCHISE TAX BOARD
PO BOX 1286
RANCHO CORDOVA CA 95741-1286

Include the SOS file number (corporation number) and name of corporation with the objection.

Our process when we receive the written objection

  • The corporation has an additional 90 days from the date we receive the written objection to pay or otherwise satisfy all accrued taxes, penalties, and interest and to file a current Statement of Information with SOS.
  • If the corporation satisfies the conditions, we cancel the administrative dissolution or surrender.
  • If the corporation does not satisfy the conditions, the nonprofit corporation is administratively dissolved or surrendered as of the date that is 90 days after we receive the written objection.
  • We may extend the 90-day period for only one additional 90 day period.

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