Washington Youth Soccer
District 3 Dissolution
Process
March 2, 2015
What do we mean by Dissolution?
Dissolution of a nonprofit corporation
means that the corporation itself ceases
to exist.
Dissolution can be voluntary or involuntary.
Why Dissolve?



The mission and purpose of the
corporation have been achieved.
or
The mission and purpose of the
corporation are better achieved by
another method.
or
The corporation is no longer able to run
effectively.
Pre – Dissolution Planning

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
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What are the current functions that the
district performs?
Which of those functions need to
continue to be performed?
Who will perform those functions?
How will the costs be paid?
Sample Pre – Dissolution Planning:
Current Functions of District


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Representation at State – Council & SOC
Leagues and Tournaments
Communication & Administration
Scholarship
Disciplinary
Soccer Development
Sample Pre – Dissolution Planning:
Distribution of Duties with Staff
Function
WYS Staff
Associations
SOC
Council
Leagues &
Tournaments

Rule Enforcement
Communication &
Administration

Scholarships &
Awards

Final Decisions
Disciplinary & interassociation mediation


Soccer Development

Representation at
State
Sample Pre – Dissolution Planning:
Costs


Use existing assets to fund staffing for first
year
Develop plan for future revenue to cover
future costs
Dissolution Process: Applicable Laws

Internal Revenue Code Section 501(c)(3)

Washington Nonprofit Corporations Act
RCW 24.03
Steps to Dissolution
1.
2.
3.
4.
5.
6.
Resolution to Dissolve
Notice of Proposed Dissolution
Plan of Distribution of Assets
Revenue Clearance Certificate Obtained
Articles of Dissolution Filed
Communication with the IRS
Step 1 – Resolution to Dissolve



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The Council passes a resolution
recommending that the corporation be
dissolved.
The Member Associations pass a
resolution to dissolve the corporation.
The member vote must pass by 2/3
majority.
What is the voting mechanism – even or
weighted?
Step 2 – Notice of Proposed
Dissolution
Mail notice of proposed dissolution to:
 Each known creditor
 Washington State Attorney General
 Washington State Dept of Revenue
Step 3 – Plan of Distribution of Assets
Develop plan for distribution of assets
which includes:
 Payment of all liabilities and obligations
 Return of all assets requiring return
 Transfer of any remaining assets to
501(c)(3) member associations in
proportion to number of registered
players (per D3 Bylaws).
Step 3 – Plan of Distribution of Assets
(cont.)
Provide notice of the proposed plan of
distribution to the Attorney General
After 20 days:
The Council adopts resolution
recommending that the plan of
distribution be adopted
The Member Associations adopt plan of
distribution. Must pass by 2/3 majority.
Step 4 – Revenue Clearance Certificate
Obtain revenue clearance certificate from
Washington State Dept of Revenue
Step 5 – Articles of Dissolution
When all liabilities and obligations of the
District have been paid, and all
remaining property and assets
transferred, prepare Articles of
Dissolution.
File Articles of Dissolution with the
Washington Secretary of State and
obtain Certificate of Dissolution
Step 6 – Communication with IRS
Send letter to IRS stating that corporation
has been dissolved.
Within 4½ months of the date of dissolution,
file final Form 990
District 3 Draft Dissolution Calendar
Aug meeting Council passes resolution to dissolve
Members vote to dissolve
Council approves proposed plan of distribution
August
Notice of Proposed Dissolution
Notice of Plan of Distribution
Sep meeting Adoption of Plan of Distribution – Council
Adoption of Plan of Distribution- Members
September Implement Plan of Distribution
File Articles of Dissolution
W/in 4½ mos File final tax return
District 3 Draft Dissolution Workplan
Now – Aug
Plan for covering district functions
Plan for distribution of assets
Aug – Sep
Execute both plans
Dissolution: Next Steps
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Plan for covering functions now handled by district
If plan is to hire staff, determine who will employ staff
– state or association?
Hire staff
Pay all liabilities of corporation
Determine where to transfer funds reserved for staff,
scholarships, etc.
Questions and Comments
?