North Carolina SB 489: Modify Nonprofit Corp. Act/Charitable Org.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 489

Short Title: Modify Nonprofit Corp. Act/Charitable Org. (Public)
Sponsors: Senator Sawrey (Primary Sponsor).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S489-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO MAKE VARIOUS CHANGES TO THE NORTH CAROLINA NONPROFIT 2
CORPORATIONS ACT AND TO ALLOW A CHARITABLE ORGANIZATION'S 3
DISCLOSURE UNDER STATE LAW TO BE SATISFIED BY THE 4
ACKNOWLEDGEMENT REQUIRED FOR A TAX DEDUCTION UNDER FEDERAL 5
LAW. 6
The General Assembly of North Carolina enacts: 7
8
PART I. MODIFY LIMITATIONS ON MERGERS AND SALES OF ASSETS 9
SECTION 1.(a) G.S. 55A-11-02 reads as rewritten: 10
"§ 55A-11-02. Limitations on mergers by charitable or religious corporations. 11
(a) Without the prior approval of the superior court in a proceeding in which the Attorney 12
General has been given written notice, a charitable or religious corporation may merge only with 13
any of the following: 14
... 15
(5) A limited liability company that satisfies both of the following conditions: 16
a. Its sole member is a domestic or foreign corporation that is exempt 17
from income tax under section 501(c)(3) of the Internal Revenue Code 18
of 1986 or any successor section. 19
b. It is disregarded for income tax purposes but would be eligible for an 20
exemption under section 501(c)(3) of the Internal Revenue Code of 21
1986 or any successor section if it were not disregarded for income tax 22
purposes. 23
...." 24
SECTION 1.(b) G.S. 55A-11-09 reads as rewritten: 25
"§ 55A-11-09. Merger with unincorporated entity. 26
(a) As used in this section, "business entity" means a (i) domestic business corporation 27
(including corporation, including a professional corporation as defined in G.S. 55B-2), a 28
G.S. 55B-2, (ii) foreign business corporation (including corporation, including a foreign 29
professional corporation as defined in G.S. 55B-16), a G.S. 55B-16, (iii) domestic or foreign 30
nonprofit corporation, a (iv) domestic or foreign limited liability company, a (v) domestic or 31
foreign limited partnership, a (vi) registered limited liability partnership or foreign limited 32
liability partnership as defined in G.S. 59-32, or any other partnership as defined in G.S. 59-36 33
whether or not formed under the laws of this State.State, or (vii) nonprofit association as defined 34
in G.S. 59B-2 whether or not formed under the laws of this State. 35

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 489-First Edition
(b) One or more domestic nonprofit corporations may merge with one or more 1
unincorporated entities and, if desired, one or more foreign nonprofit corporations, domestic 2
business corporations, or foreign business corporations if:if all of the following apply: 3
(1) The merger is permitted by the laws of the state or country governing the 4
organization and internal affairs of each of the other merging business 5
entities;entities. 6
(2) Each merging domestic nonprofit corporation and each other merging 7
business entity comply with the requirements of this section and, to the extent 8
applicable, the laws referred to in subdivision (1) of this subsection; 9
andsubsection. 10
(3) The merger complies with G.S. 55A-11-02, if applicable. 11
... 12
(c3) In the case of a merging domestic nonprofit corporation, approval of the plan of 13
merger requires that the plan of merger be adopted as provided in G.S. 55A-11-03. If any member 14
of a merging domestic nonprofit corporation has or will have personal liability for any existing 15
or future obligation of the surviving business entity solely as a result of holding an interest in the 16
surviving business entity, then in addition to the requirements of G.S. 55A-11-03, approval of 17
the plan of merger by the domestic nonprofit corporation shall require the affirmative vote or 18
written consent of the member. In the case of each other merging business entity, the plan of 19
merger must shall be approved in accordance with the laws of the state or country governing the 20
organization and internal affairs of such merging business entity. 21
... 22
(d) After a plan of merger has been approved by each merging domestic nonprofit 23
corporation and each other merging business entity as provided in subsection (c) of this section, 24
the surviving business entity shall deliver articles of merger to the Secretary of State for filing. 25
The articles of merger shall set forth:forth all of the following: 26
... 27
(e) A merger takes effect when the articles of merger become effective. When a merger 28
takes effect:effect, all of the following apply: 29
(1) Each other merging business entity merges into the surviving business entity 30
and the separate existence of each merging business entity except the 31
surviving business entity ceases;ceases. 32
(2) The title to all real estate and other property owned by each merging business 33
entity is vested in the surviving business entity w