A. Winding Up
The process of winding up of the business of a domestic entity is triggered as a result of the occurrence of certain events. Chapter 11 of the BOC and the applicable spokes govern the winding up of a domestic entity.
Section 11.051 of the BOC sets forth five events that require the winding up of a domestic entity. These five events are:
the expiration of an entity’s duration;
a voluntary decision to wind up the business/affairs of the entity by a vote of the persons authorized under the BOC to approve the winding up of the entity;
the occurrence of an event provided for in the governing documents of the entity that requires the winding up of the entity;
the occurrence of an event specified in the BOC as requiring the winding up of the domestic entity; and
a judicial decree that requires the winding up or dissolution of the entity.
Unless the event requiring the winding up of the domestic entity is revoked (Sec. 11.151) or canceled (Sec. 11.152), the governing persons, or other persons authorized by the BOC, are required to wind up the business of the domestic entity as soon as reasonably practicable. Look to chapter 11 and the specific title governing the domestic entity for requirements and procedures relating to a revocation or cancellation of an event requiring the winding up of a domestic entity.
B. Certificate of Termination
A domestic filing entity must file a certificate of termination after the process of winding up is completed.
Pursuant to sections 11.101 and 11.105, a certificate of termination for a Texas nonprofit corporation must include the following:
the name and address of the filing entity;
the name and address of each governing person;
the nature of the event that requires the filing entity’s winding up;
a statement that the entity has complied with the provisions of the BOC governing its winding up;
a statement that any property of the nonprofit corporation has been transferred, conveyed, applied, or distributed in accordance with chapters 11 and 22 of the BOC;
a statement that there is no suit pending against the nonprofit corporation or that adequate provision has been made for the satisfaction of any judgment that may be entered against the nonprofit corporation in a pending suit; and
if the nonprofit corporation received and held property permitted to be used only for charitable, religious, eleemosynary, benevolent, educational, or similar purposes, but the nonprofit corporation did not hold the property on a condition requiring return, transfer, or conveyance because of the winding up and termination, a statement that distribution of that property has been effected in accordance with a plan of distribution adopted in compliance with the BOC for the distribution of that property.
A nonprofit corporation may use SOS form 652 for the purpose of submitting a certificate of termination.
A. Winding Up