North Carolina HB 517: Modify Nonprofit Corporations Act/Charitable Organizations.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2026-52
HOUSE BILL 517

*H517-v-6*
AN ACT TO MAKE VARIOUS CHANGES TO THE NORTH CAROLINA NONPROFIT
CORPORATIONS ACT AND TO ALLOW A CHARITABLE ORGANIZATION'S
DISCLOSURE UNDER STATE LAW TO BE SATISFIED BY THE
ACKNOWLEDGEMENT REQUIRED FOR A TAX DEDUCTION UNDER FEDERAL
LAW AND TO MODIFY THE EMERGENCY VIDEO SUNSETS.

The General Assembly of North Carolina enacts:

PART I. MODIFY LIMITATIONS ON MERGERS AND SALES OF ASSETS
SECTION 1.(a) G.S. 55A-11-02 reads as rewritten:
"§ 55A-11-02. Limitations on mergers by charitable or religious corporations.
(a) Without the prior approval of the superior court in a proceeding in which the Attorney
General has been given written notice, a charitable or religious corporation may merge only with
any of the following:
...
(5) A limited liability company that satisfies both of the following conditions:
a. Its sole member is a domestic or foreign corporation that is exempt
from income tax under section 501(c)(3) of the Internal Revenue Code
of 1986 or any successor section.
b. It is disregarded for income tax purposes but would be eligible for an
exemption under section 501(c)(3) of the Internal Revenue Code of
1986 or any successor section if it were not disregarded for income tax
purposes.
...."
SECTION 1.(b) G.S. 55A-11-09 reads as rewritten:
"§ 55A-11-09. Merger with unincorporated entity.
(a) As used in this section, "business entity" means a (i) domestic business corporation
(including corporation, including a professional corporation as defined in G.S. 55B-2), a
G.S. 55B-2, (ii) foreign business corporation (including corporation, including a foreign
professional corporation as defined in G.S. 55B-16), a G.S. 55B-16, (iii) domestic or foreign
nonprofit corporation, a (iv) domestic or foreign limited liability company, a (v) domestic or
foreign limited partnership, a (vi) registered limited liability partnership or foreign limited
liability partnership as defined in G.S. 59-32, or any other partnership as defined in G.S. 59-36
whether or not formed under the laws of this State.State, or (vii) nonprofit association as defined
in G.S. 59B-2 whether or not formed under the laws of this State.
(b) One or more domestic nonprofit corporations may merge with one or more
unincorporated entities and, if desired, one or more foreign nonprofit corporations, domestic
business corporations, or foreign business corporations if:if all of the following apply:
(1) The merger is permitted by the laws of the state or country governing the
organization and internal affairs of each of the other merging business
entities;entities.

Page 2 Session Law 2026-52 House Bill 517
(2) Each merging domestic nonprofit corporation and each other merging
business entity comply with the requirements of this section and, to the extent
applicable, the laws referred to in subdivision (1) of this subsection;
andsubsection.
(3) The merger complies with G.S. 55A-11-02, if applicable.
...
(c3) In the case of a merging domestic nonprofit corporation, approval of the plan of
merger requires that the plan of merger be adopted as provided in G.S. 55A-11-03. If any member
of a merging domestic nonprofit corporation has or will have personal liability for any existing
or future obligation of the surviving business entity solely as a result of holding an interest in the
surviving business entity, then in addition to the requirements of G.S. 55A-11-03, approval of
the plan of merger by the domestic nonprofit corporation shall require the affirmative vote or
written consent of the member. In the case of each other merging business entity, the plan of
merger must shall be approved in accordance with the laws of the state or country governing the
organization and internal affairs of such merging business entity.
...
(d) After a plan of merger has been approved by each merging domestic nonprofit
corporation and each other merging business entity as provided in subsection (c) of this section,
the surviving business entity shall deliver articles of merger to the Secretary of State for filing.
The articles of merger shall set forth:forth all of the following:
...
(e) A merger takes effect when the articles of merger become effective. When a merger
takes effect:effect, all of the following apply:
(1) Each other merging business entity merges into the surviving business entity
and the separate existence of each merging business entity except the
surviving business entity ceases;ceases.
(2) The title to all real estate and other property owned by each merging business
entity is vested in the surviving business entity without reversion or
impairment;impairment.
(3) The surviving business entity has all liabilities of each merging business
entity;entity.
(4) A proceeding pending by or against any merging business entity may be
continued as if the merger did not occur, or the surviving business entity may
be substituted in the proceeding for a merging business entity whose sepa