Sample Corporate Transition Checklist

This checklist outlines the details of a corporate merger.

The following list is not exhaustive, but it will serve as a general outline of the necessary documents and steps for merging two entities. However, this checklist shouldn’t be substituted for proper legal advice.

1. Prior to Merger:

Provide the following to legal counsel.

  • An explanation of the motivation for the merge: This will help legal counsel determine the type of transfer to utilize (i.e., merger/donation/asset purchase).
  • An articulated final version of the entities post merge: This will help legal counsel anticipate additional issues that may need to be addressed (such as, employment contracts, leases, and so on).
  • The following documents:
    • Articles of Incorporation and bylaws
    • IRS determination letter
    • Mortgage and loan documents
    • Property tax exemptions
    • Lease agreements
    • Employment contracts
    • List of restricted gifts
    • List of all assets (real property, computers, books, vehicles—basically a list of everything that the church owns)
    • List of all liabilities (such as copier leases, rental leases, and so on).

2. During the Merger:

  • State Level:

    • File a plan for distribution if required by the state you are located in. This document basically tells the state how the dissolving organization will distribute its assets to other 501(c)(3) tax-exempt organizations upon dissolution.
    • File articles of dissolution for dissolving organization.
  • Local Level: No steps necessary.
  • Internal Corporate:

    • Create a memorandum of gift transfer and appropriate resolutions that properly document each transaction and demonstrate that each action was properly authorized by the presiding authority (such as a board of directors or congregation).
  • Internal Administrative: No steps necessary.
  • 3. After the Merger:

  • State Level: No steps necessary.
  • Local Level:

    • If property is owned and transferred, new deeds must be drafted. The new deed transferring property to the “new” corporation should be recorded.
    • Transfer utilities.
    • Notify county taxing authority/submit amended tax exemption application for property tax purposes.
  • Internal Corporate:

    • After determining which employees will remain (all, some, or none), draft a letter to staff advising them that they now work for new corporation and are considered to continue as at-will employees. The church should have all employees sign new employment agreements and go through appropriate background screenings. The church should also adopt or disseminate the existing employee manual to all new employees.
    • Submit 1023 tax exemption recognition application to IRS, if recognition not previously applied for and obtained.
  • Internal Administrative:

    • Change any prerecorded voice mail messages to reflect new corporation.
    • Change website and notify webmaster.
    • Change e-mail accounts and addresses.
    • Letter or e-mail to staff to change all letterhead, business cards, envelopes, materials, or literature on church property, and to refer to church only as new corporate name; discard materials with the former name on it.
    • Change facsimile machine confirmation/transmission to new corporate name.
    • Verify key control (all keys accounted for and kept in secure location—consider changing locks).
    • Change all signage on property.
    • Change usher or volunteer badges, sign-up forms, releases, and so on.
    • Requalify all volunteers, including background checks.
    • Have parents of Sunday School students sign new releases or other papers for new corporation.
    • Change any Sunday School materials, Bible study materials, and so on.
    • Change any bulletins, overheads, and so on.
  • Vendor:

    • Notify all vendors of change and instruct to only contact church as “____ Church.”
    • Notify newspaper(s) to change any recurring notices or advertisements.
    • Change payroll information, checks, and so on.
    • Notify any associations or conferences of change.
  • This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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