Here is the exact dissolution language the IRS told us had to be in our Articles Of Incorporation in order for them to grant our 501(c)(3) (which we just got yesterday!). If it is in your AOI or Constitution, it does not necessarily need to be repeated in your bylaws unless you want to be more specific than the IRS language.
The paragraph basically means that if the PTO folds, you must give the assets to another 501(c)(3). You can't distribute the money to your current members, for example. Our bylaws specify that the assets would go to the school first, then to the district if the school is closed.
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"Upon the dissolution of the organization, assets shall be distributed for one or more exempt purposes within the meaning of section 501 (c)(3) of the Internal Revenue Code, or corresponding section of any future federal code, or shall be distributed to the federal government, or to a state or local government, for a public purpose. Any such assets not disposed of shall be disposed of by the Court of Common Pleas of the county in which the principal office of the organization is then located, exclusively for such purposes or to such organization or organizations, as said Court shall determine, which are organized and operated exclusively for such purposes."
I have gone through almost every post regarding By-Laws here and have forgotten where I got the dissolution stuff from. I believe it was DaveP who had the information. He believed it to be a pretty important part of the By-Laws. I had never thought about it before, but this year we decided to up date our 1978 set and I went ahead and put it in. Well, as life would go, we just found out 3 weeks ago, our school is being taken over for a new "magnet" school and all students, staff and principal are being moved to a new facility double the size of our current school. So this clause, started looking like it might be important. We haven't even begun to discuss the options of just moving the PTO to the new school, splitting the funds for each school (some students will be staying at the magnet school), or just disolving the current PTO and letting the new schools reform their own. I just thought I would gather some more info for next weeks meeting and the voting on the new laws.
From what I can understand from ours. A dissolution cause is what would happen to any funds, bills, etc. from the PTO if the PTO disolved. We only have to have it in our Articles of Organization, I talked to the legal dept. of the Attorney Generals Office and they said it didn't need to be in the bylaws. But basically thats what it is.
I want to thank everyone here for helping me with suggestions and ideas to re-do our by laws. I am very happy with my final proposal. I submitted it to the PTO and it is to be voted on soon. My problem is that the principal has deleted the dissolution clause I put in. Do I really need it and why? I need some good answers for the questions I am going to face. Any ideas?
