Notice of Merger or Transfer of Assets
When is Notice to the Attorney General’s Office Required?
The North Carolina Nonprofit Corporation Act (N.C.G.S. § 55A) requires, among other things, that a charitable or religious corporation must deliver written notice to the Attorney General’s Office at least 30 days before consummating any merger with any unincorporated entity or with any business or nonprofit corporation (other than another charitable or religious corporation), unless the charitable or religious corporation has already received prior approval for the merger from the superior court as part of a court proceeding in which the Attorney General’s Office has been given written notice (N.C.G.S. §§ 55A-11-02(a) and (b)).
A charitable or religious corporation must also give the Attorney General’s Office written notice before said corporation sells, leases, exchanges, or otherwise disposes of all, or a majority of, its property, at least 30 days prior to the occurrence of the transaction, if the transaction is not in the usual and regular course of the corporation’s activities. A disposition taking place as part of or because of the dissolution of the corporation, pursuant to N.C.G.S. § 55A Article 14 or any successor statute, is generally considered to be a transaction not in the usual and regular course of the corporation’s activities. In addition, a nonprofit corporation entering into a contract that would obligate the corporation to sell, lease, exchange, or otherwise dispose of all, or a majority of, its property, at some later date and/or upon some conditional future occurrence (such as an options contract or a contract involving a right of first refusal to purchase the property), is generally considered not in the usual and regular course of the corporation’s activities.
How to Submit a Notice
Notices can be submitted by completing the webform below or by completing our fillable pdf Notice of Merger or Transfer of Assets Form and submitting by e-mail or mail to the addresses listed below.
Nonprofit Asset Transfer
Consumer Protection Division
North Carolina Department of Justice
P.O. Box 629
Raleigh, NC 27602
What Information Should be Included in the Notice?
The notice shall include all the information the Attorney General determines is required for a complete review of the proposed transaction. The checklist below, as well as our Notice of Merger or Transfer of Assets Form outlines much of the information the Attorney General’s Office will need for the review, but it is possible we may request additional information.
The notice should include the information below:
- A description of the transaction and the reason for it.
- An explanation of the transferor organization’s plan for operations (or dissolution) following the transaction, including a copy of the plan of dissolution, if the transferring entity intends to dissolve following the transaction
- Contact information for transferor and transferee entities.
- Final versions of all transaction documents (e.g., contracts, bills of sale, deeds, promissory notes, employment agreements, etc.).
- Documents demonstrating that the transaction has followed corporate formalities and is legally-binding (i.e., articles of incorporation, bylaws, corporate consents or resolutions, records of membership votes if applicable).
- Information about the transferor entity’s debts, if any, including the lenders and amounts, and how the organization will resolve them.
- A statement that the transaction does not violate the terms of any grants or restricted gifts.
- All relevant minutes of the board discussing the events surrounding the transaction and the transaction itself.
- If the transferee entity is taking on any responsibilities, appropriate documentation that it accepts those responsibilities.
- Appropriate evidence of the value of the assets being transferred.
- Names of all members of the transferor board and, if applicable, the transferee board.
- Identification of any actual or potential conflicts of interest and how those have been resolved.
What Happens After a Notice has been Submitted?
The statutes provide our office with an initial period of 30 days to review the transaction. This 30-day review period does not begin to run until the Attorney General’s Office receives all the information that it, in its discretion, determines is required for a complete review of the transaction. These statutes also allow our office to take an additional 30 days (for a total of 60 days) to review the transaction upon written notice to the charitable entity. The statutes further provide that the transaction may not be finalized until this review period expires.
NOTICE OF MERGER OR TRANSFER OF ASSETS BY A CHARITABLE OR RELIGIOUS CORPORATION
Pursuant to N.C. Gen. Stat. §§ 55A-11-02 and 55A-12-02, the charitable or religious corporation listed below hereby gives notice to the North Carolina Attorney General of its intent to merge or transfer a majority of its assets.