Navigating changes to Pennsylvania’s Nonprofit Corporation Law
Nonprofit organizations should be aware Pennsylvania recently made numerous changes to the Pennsylvania Nonprofit Corporation Law (“NPCL”). While most changes became effective January 3, 2023, additional changes take effect in later years. Changes affect filing requirements, reinstatement for dissolved entities and fiduciary duty standards as well as other matters on the operations of a nonprofit corporation. Below is a preview of some of the changes.
Beginning July 1, 2024, Pennsylvania will require nonprofit corporations to file annual reports, eliminating the current decennial reports. Failure to file these annual reports within six months of the due date will result in administrative dissolution of the nonprofit corporation starting in 2027. A reminder of the annual report coming due will be sent at least two months in advance. A nonprofit corporation, however, must be aware the onus is upon it to make certain the annual report is filed, even if it does not receive a reminder.
The NPCL also updates laws related to the board and officers, with such updates including:
- Allowing Articles of Incorporation and Bylaws to identify an exclusive forum for resolving disputes on matters such as breach of duty claims and contractual disagreements.
- Developing new rules on how and when a director’s resignation is effective and requiring acceptance or rejection of such resignation according to the nonprofit corporation’s best practices.
- Authorizing nonprofit corporations to limit or abolish the duty of its directors and officers who may have competing interests to offer opportunities to the nonprofit.
Updates for nonprofits operating during an emergency
Entities engaging in activity in Pennsylvania solely for the purpose of responding to an emergency situation may be exempt from registering to conduct operations in Pennsylvania. Additionally, Pennsylvania now has more lenient rules regarding meetings and other forums that take place during a state or national emergency.
We’re here for you
Our firm, having experience in matters related to nonprofit organizations, can advise clients on the specifics of the changes to the NPCL so they remain in compliance with recent changes. Call us at 412-745-1040 or contact us online to learn how we can help your nonprofit organization.
