State of the Nonprofit Regulatory Environment in CONNECTICUT

Table of contents

• 1 Bifurcation of charitable regulatory body
• 2 Notice, Filing or Review of Transactions
• 3 Notice or Action for Dissolutions
• 4 Notice, Oversight or Filing of Hospital Conversions
• 5 Audits
• 6 Registration Law
• 7 Exemptions from Registering for Specific Organization Types
• 8 Defined remedies
• 9 Oversight of professional fundraisers

1 Bifurcation of charitable regulatory body

Bifurcated Regulatory Structure

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 21a-190a

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Yes - C.G.S. § 21a-190a et seq

Registration Office

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

BIFURCD-REGIOF-NS

REGULATORY BODY: Not Specific

NOTES: State of Connecticut Department of Consumer Protection - Public Charities Unit http://ct.gov/dcp/cwp/view.asp?a=1654&q=459952

2 Notice, Filing or Review of Transactions

Sale of Assets

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-ASSETS-AG

REGULATORY BODY: Attorney General

NOTES: No

REPORTS-ASSETS-OT

REGULATORY BODY: Other

NOTES: No

Mergers

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-MERGER-AG

REGULATORY BODY: Attorney General

NOTES: No

CT Code § 33-1155(e)

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: File with Sec. of State; C.G.S § 33-1155(e)

Certificate of Amendments

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-AMMEND-AG

REGULATORY BODY: Attorney General

NOTES: No

CT Code § 33-1144

REGULATORY BODY: Other

STATUTE TEXT: After an amendment to the certificate of incorporation has been adopted and approved in the manner required by sections 33-1140 to 33-1147, inclusive, and by the certificate of incorporation, the corporation shall deliver to the Secretary of the State for filing a certificate of amendment, that shall set forth: (1) The name of the corporation; (2) the text of each amendment adopted; (3) the date of each amendment’s adoption; and (4) if the amendment (A) was adopted by the incorporators or the board of directors without member approval, a statement that the amendment was duly approved by the incorporators or by the board of directors, as the case may be, and that member approval was not required, or (B) required approval by the members, a statement that the amendment was duly approved by the members in the manner required by sections 33-1140 to 33-1147, inclusive, and by the certificate of incorporation.(P.A. 96-256, S. 101, 209; 03-18, S. 40.)History: P.A. 96-256 effective January 1, 1997; P.A. 03-18 replaced provision re a corporation amending its certificate of incorporation with provision re after an amendment to the certificate of incorporation has been adopted and approved, amended Subdiv. (4) by replacing former provisions with new Subpara. (A) re amendment adopted without member approval and new Subpara. (B) re amendment that required member approval, deleted former Subdiv. (5) re amendment that required member approval, and made technical changes, effective July 1, 2003.

NOTES: File with Sec. of State, C.G.S. §33-1144 (Nonstock Corp); C.G.S. §33-264d (Religious Corps/Societies)

CT Code § 33-264d

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: File with Sec. of State, C.G.S. §33-1144 (Nonstock Corp); C.G.S. §33-264d (Religious Corps/Societies)

Does the state require annual financial reporting by charitable organizations in addition to filing a copy of the 990 with the regulator (if filing 990 is required)?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-FINANC-NS

REGULATORY BODY: Not Specific

NOTES: Financial Statement or 990

3 Notice or Action for Dissolutions

Voluntary Dissolutions

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

DISSOLV-VOLUNT-AG

REGULATORY BODY: Attorney General

NOTES: No

CT Code § 33-1170

REGULATORY BODY: Other

STATUTE TEXT: A majority of the initial directors or, if the initial directors have not been appointed, two-thirds of the incorporators, of a corporation that has no member entitled to vote upon dissolution, and that has not commenced the activities for which it was incorporated, may dissolve the corporation by delivering to the Secretary of the State for filing a certificate of dissolution that sets forth: (1) The name of the corporation; (2) that the corporation has no member entitled to vote; (3) that the corporation has not commenced the activities for which it was incorporated; (4) that no debt of the corporation remains unpaid; (5) that the net assets of the corporation remaining after winding up have been distributed as required by sections 33-1000 to 33-1290, inclusive; and (6) that a majority of the initial directors or, if the initial directors have not been appointed, two-thirds of the incorporators, authorize the dissolution.(P.A. 96-256, S. 115, 209.)History: P.A. 96-256 effective January 1, 1997.

NOTES: File with Sec. of State, C.G.S. §33-1170 (Nonstock Corp)

Judicial Dissolutions

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 33-1187

REGULATORY BODY: Attorney General

STATUTE TEXT: (a) The superior court for the judicial district where the corporation’s principal office or, if none in this state, its registered office, is located may dissolve a corporation:(1) In a proceeding by a member or a director if it is established that: (A) The directors or those in control of the corporation have acted, are acting or will act in a manner that is illegal, oppressive or fraudulent; or (B) the corporate assets are being misapplied or wasted;(2) In a proceeding by a creditor if it is established that: (A) The creditor’s claim has been reduced to judgment, the execution on the judgment returned unsatisfied and the corporation is insolvent; or (B) the corporation has admitted in writing that the creditor’s claim is due and owing and the corporation is insolvent;(3) In a proceeding by the corporation to have its voluntary dissolution continued under court supervision; or(4) In a proceeding by the Attorney General in proceedings in the nature of quo warranto.(b) The superior court for the judicial district where the corporation’s principal office or, if none in this state, its registered office, is located shall dissolve a corporation: (1) In a proceeding by a member or members having voting power sufficient under the circumstances to dissolve the corporation pursuant to the certificate of incorporation; (2) in a proceeding by a member or a director when it is established that (A) under the provisions of sections 33-1000 to 33-1290, inclusive, or of the certificate of incorporation or bylaws, the directors are deadlocked in the management of the corporate affairs and the members, if any, are unable to break the deadlock, or (B) if there are members entitled to vote for the election of directors, such members are deadlocked in voting power for the election of directors and for that reason have been unable at the next preceding annual meeting to agree upon or vote for directors as successors to directors whose term would normally have expired upon the election of their successors.(P.A. 96-256, S. 128, 209.)History: P.A. 96-256 effective January 1, 1997.

NOTES: C.G.S. §33-1187 et seq. (Nonstock Corp); C.G.S. §33-264f (Religious Corps/Societies)

CT Code § 33-264f

REGULATORY BODY: Attorney General

STATUTE TEXT:

NOTES: C.G.S. §33-1187 et seq. (Nonstock Corp); C.G.S. §33-264f (Religious Corps/Societies)

CT Code § 33-1190

REGULATORY BODY: Other

STATUTE TEXT: (a) If after a hearing the court determines that one or more grounds for judicial dissolution described in section 33-1187 exist, it may, in the case of the grounds specified in subsection (a) of said section, and shall, in the case of the grounds specified in subsection (b) of said section, enter a decree dissolving the corporation and specifying the effective date of the dissolution, and the clerk of the court shall deliver a certified copy of the decree to the Secretary of the State, who shall file it.(b) After entering the decree of dissolution, the court shall direct the winding up and liquidation of the corporation’s activities and affairs in accordance with section 33-1174 and the notification of claimants in accordance with sections 33-1177 and 33-1178.(P.A. 96-256, S. 131, 209.)History: P.A. 96-256 effective January 1, 1997.

NOTES: Decree of dissolution (filed with Sec. of State), C.G.S. §33-1190. Deposit of assets with State Treasurer or other state official, C.G.S. §33-1193 (Nonstock Corp)

CT Code § 33-1193

REGULATORY BODY: Other

STATUTE TEXT: Assets of a dissolved corporation that should be transferred to a creditor, claimant or member of the corporation who cannot be found or who is not competent to receive them shall be reduced to cash and deposited for safekeeping with the State Treasurer or other state official empowered to hold such assets. When the creditor, claimant or member furnishes satisfactory proof of entitlement to the amount deposited, the State Treasurer or such other state official shall pay him or his representative that amount.(P.A. 96-256, S. 132, 209.)History: P.A. 96-256 effective January 1, 1997.

NOTES: Decree of dissolution (filed with Sec. of State), C.G.S. §33-1190. Deposit of assets with State Treasurer or other state official, C.G.S. §33-1193 (Nonstock Corp)

Administrative Dissolutions

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

DISSOLV-ADMINI-AG

REGULATORY BODY: Attorney General

NOTES: No

CT Code § 33-1181

REGULATORY BODY: Other

STATUTE TEXT: (a) The Secretary of the State may effect the administrative dissolution of a corporation as provided in this section.(b) Whenever any corporation is more than two years in default of filing its annual report as required by section 33-1243, the Secretary of the State may notify such corporation by registered or certified mail addressed to such corporation at its principal office as last shown on his records that under the provisions of this section the corporation is to be administratively dissolved. Unless the corporation, within three months of the mailing of such notice, files such annual report, the Secretary of the State shall prepare and file in his office a certificate of administrative dissolution stating that the delinquent corporation has been administratively dissolved by reason of its default.(c) Whenever it comes to the attention of the Secretary of the State that a corporation has failed to maintain a registered agent or that such registered agent cannot, with reasonable diligence, be found at the address shown in the records of his office, the Secretary of the State may notify such corporation by registered or certified mail addressed to such corporation at its principal office as last shown on his records that under the provisions of this section the corporation is to be administratively dissolved. Unless the corporation within three months of the mailing of such notice files an appointment of registered agent, the Secretary of the State shall prepare and file in his office a certificate of administrative dissolution stating that the delinquent corporation has been administratively dissolved by reason of its default.(d) Dissolution shall be effective upon the filing by the Secretary of the State in his office of such certificate of administrative dissolution.(e) After filing the certificate of administrative dissolution, the Secretary of the State shall: (1) Mail a copy thereof to the delinquent corporation, addressed to such corporation at its principal office as last shown on his records, and (2) cause notice of the filing of such certificate of administrative dissolution to be posted on the office of the Secretary of the State’s Internet web site for a period of sixty days following the date on which the Secretary of the State files the certificate of administrative dissolution.(P.A. 96-256, S. 124, 209; P.A. 14-154, S. 7.)History: P.A. 96-256 effective January 1, 1997; P.A. 14-154 added new Subsec. (b) re administrative dissolution of corporation that is in default of filing annual report, redesignated existing Subsecs. (b) to (d) as Subsecs. (c) to (e) and amended redesignated Subsec. (e) by deleting requirements that certificate of administrative dissolution be sent by registered or certified mail and published in 2 successive issues of the Connecticut Law Journal and by adding requirement that Secretary of the State cause notice of filing of certificate of administrative dissolution to be posted on the office’s web site, effective January 1, 2015.

NOTES: Initiated by Sec. of State, C.G.S. §33-1181 (Nonstock Corp); Deposit of assets with State Treasurer or other state official C.G.S. §33-1193 (Nonstock Corp)

CT Code § 33-1193

REGULATORY BODY: Other

STATUTE TEXT: Assets of a dissolved corporation that should be transferred to a creditor, claimant or member of the corporation who cannot be found or who is not competent to receive them shall be reduced to cash and deposited for safekeeping with the State Treasurer or other state official empowered to hold such assets. When the creditor, claimant or member furnishes satisfactory proof of entitlement to the amount deposited, the State Treasurer or such other state official shall pay him or his representative that amount.(P.A. 96-256, S. 132, 209.)History: P.A. 96-256 effective January 1, 1997.

NOTES: Initiated by Sec. of State, C.G.S. §33-1181 (Nonstock Corp); Deposit of assets with State Treasurer or other state official C.G.S. §33-1193 (Nonstock Corp)

4 Notice, Oversight or Filing of Hospital Conversions

Has Statute

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 19a-486a

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S. § 19a-486a

Requires Notice or Oversight

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 19a-486a

REGULATORY BODY: Attorney General

STATUTE TEXT:

NOTES: C.G.S. § 19a-486a

CT Code § 19a-486a

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Commissioner of Public Health, C.G.S. § 19a-486a

Requires Filing

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 19a-486i

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: FTC and U.S. DOJ, C.G.S. § 19a-486i

5 Audits

Requires Audit

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 21a-190c(b)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S. §21a-190c(b)

Audit Threshold

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

AUDITFI-THRESH-NS

REGULATORY BODY: Not Specific

NOTES: 500000

6 Registration Law

Registration Law

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

REGILAW-REGIST-NS

REGULATORY BODY: Not Specific

NOTES: Solicitation of Charitable Funds Act, C.G.S. chapter 419d

7 Exemptions from Registering for Specific Organization Types

Religious Organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

CT Code § 21a-190d(1)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S. § 21a-190d(1)

Small organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

CT Code § 21a-190d(6)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S. § 21a-190d(6) ($50k provided no compensation paid for soliciting)

Educational Institutions

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

CT Code § 21a-190d(2)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S. § 21a-190d(2)

Governmental Organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

CT Code § 21a-190d(4)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S. § 21a-190d(4)

Hospitals

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

CT Code § 21a-190d(3)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S. § 21a-190d(3) (only if nonprofit)

Veterans organizations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-VETERA-NS

REGULATORY BODY: Not Specific

NOTES: NO

Foundations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-FNDYES-NS

REGULATORY BODY: Not Specific

NOTES: NO

Foundations that don’t solicit contributions

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-FNDNOS-NS

REGULATORY BODY: Not Specific

NOTES: NO

Charitable Trusts

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-CTRUST-NS

REGULATORY BODY: Not Specific

NOTES: NO

Parent-Teacher Organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

CT Code § 21a-190d(2)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S. § 21a-190d(2)

Reports to congress

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-CONGRE-NS

REGULATORY BODY: Not Specific

NOTES: NO

Non-soliciting

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

CT Code § 21a-190b(a)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S.A. § 21a-190b(a)

Fraternal/ Membership

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-MEMFRA-NS

REGULATORY BODY: Not Specific

NOTES: NO

Political Orgs

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-POLITI-NS

REGULATORY BODY: Not Specific

NOTES: NO

Other

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-OTHTYP-NS

REGULATORY BODY: Not Specific

8 Defined remedies

Dissolution

Regulatory Action: REMEDY

YES: A regulation is defined in the state

CT Code § 33-1187

REGULATORY BODY: Not Specific

STATUTE TEXT: (a) The superior court for the judicial district where the corporation’s principal office or, if none in this state, its registered office, is located may dissolve a corporation:(1) In a proceeding by a member or a director if it is established that: (A) The directors or those in control of the corporation have acted, are acting or will act in a manner that is illegal, oppressive or fraudulent; or (B) the corporate assets are being misapplied or wasted;(2) In a proceeding by a creditor if it is established that: (A) The creditor’s claim has been reduced to judgment, the execution on the judgment returned unsatisfied and the corporation is insolvent; or (B) the corporation has admitted in writing that the creditor’s claim is due and owing and the corporation is insolvent;(3) In a proceeding by the corporation to have its voluntary dissolution continued under court supervision; or(4) In a proceeding by the Attorney General in proceedings in the nature of quo warranto.(b) The superior court for the judicial district where the corporation’s principal office or, if none in this state, its registered office, is located shall dissolve a corporation: (1) In a proceeding by a member or members having voting power sufficient under the circumstances to dissolve the corporation pursuant to the certificate of incorporation; (2) in a proceeding by a member or a director when it is established that (A) under the provisions of sections 33-1000 to 33-1290, inclusive, or of the certificate of incorporation or bylaws, the directors are deadlocked in the management of the corporate affairs and the members, if any, are unable to break the deadlock, or (B) if there are members entitled to vote for the election of directors, such members are deadlocked in voting power for the election of directors and for that reason have been unable at the next preceding annual meeting to agree upon or vote for directors as successors to directors whose term would normally have expired upon the election of their successors.(P.A. 96-256, S. 128, 209.)History: P.A. 96-256 effective January 1, 1997.

NOTES: C.G.S. §33-1187 (Nonstock Corp); CGS § 33-264f (Religious Corps/Societies)

CT Code § 33-264f

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: C.G.S. §33-1187 (Nonstock Corp); CGS § 33-264f (Religious Corps/Societies)

Removal of Board Members

Regulatory Action: REMEDY

YES: A regulation is defined in the state

CT Code § 33-1090

REGULATORY BODY: Not Specific

STATUTE TEXT: (a) The superior court for the judicial district where a corporation’s principal office or, if none in this state, its registered office is located may remove a director of the corporation from office in a proceeding commenced either by the corporation or by its members holding at least ten per cent of the voting power of any class if the court finds that (1) the director engaged in fraudulent or dishonest conduct or gross abuse of authority or discretion, with respect to the corporation and (2) removal is in the best interest of the corporation.(b) The court that removes a director may bar the director from serving on the board for a period prescribed by the court.(c) If members commence a proceeding under subsection (a) of this section, they shall make the corporation a party defendant.(P.A. 96-256, S. 66, 209.)History: P.A. 96-256 effective January 1, 1997.

NOTES: Conn. Gen. Stat. Ann. § 33-1090

9 Oversight of professional fundraisers

Does the state require registration by commercial fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 21a-190f

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Conn. Gen. Stat. § 21a-190f

Does the state require registration by fundraising counsel?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

CT Code § 21a-190e

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: No registration for counsel not having custody of funds. Contracts must be filed with the Department of Consumer Protection “Each contract between a charitable organization and a fund-raising counsel shall be in writing and shall be filed by the fund-raising counsel with the department at least fifteen days prior to the performance by the fund-raising counsel of any material services pursuant to such contract. Each contract shall be filed in a form prescribed by the commissioner. The contract shall contain such information as will enable the department to identify the services the fund-raising counsel is to provide and the manner of his compensation.” Conn. Gen. Stat. § 21a-190e.

Does the state require the fundraisers to provide notice to the regulator before any solicitation campaign (in addition to annual registration and/or filing the contract)?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 21a-190f

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Paid solicitors must file contract for each campaign 20 days before the start of each campaign: Conn. Gen. Stat. § 21a-190f

Does the state require a copy of any contract between a charitable organization and a commercial fundraiser or fundraising counsel be filed with the regulator?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 21a-190f

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Conn. Gen. Stat. § 21a-190f

Does the state require annual financial reporting by commercial fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 21a-190f

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Paid solicitors must file financial reports 90 days after end of campaign, or one year after start of campiagn (for campaigns lasting longer tham one year): Conn. Gen. Stat. § 21a-190f

Does the state require bonding of professional fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

CT Code § 21a-190f

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: An applicant for registration or for a renewal of registration as a paid solicitor shall file a bond with the department in which the applicant shall be the principal obligor in the sum of $20,000, with one or more responsible sureties. Conn. Gen. Stat. § 21a-190f

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