Legal Question in Civil Rights Law in Indiana
''Nonprofit Corporations''
In the event a 501C(3) entity runs out of money and has to dissolve, who is responsible for outstanding financial liabilities? Essentially, ran out of money and owes money to others. Thanks
Asked on 10/23/02, 6:37 pm
1 Answer from Attorneys
Charles Aspinwall
Charles S. Aspinwall, J.D., LLC
Re: ''Nonprofit Corporations''
Assuming a true corporation, and assuming no director or officer signed personally, the debts will remain unpaid. Essentially the corporation is bankrupt, even though formal proceeding may not have been filed. Members and officers/directors are not personally liable unless they (1) agreed to be in writing, or (2) perpetrated some sort of fraud on the creditors.
Answered on 10/23/02, 8:58 pm
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