State of the Nonprofit Regulatory Environment in RHODE ISLAND

1 Bifurcation of charitable regulatory body

Bifurcated Regulatory Structure

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 7-6-1

REGULATORY BODY: Not Specific

STATUTE TEXT: ss 7-6-1. Short title. This chapter shall be known and may be cited as the “Rhode Island Nonprofit Corporation Act”. History of Section. (P.L. 1984, ch. 380, ss 1; P.L. 1984, ch. 444, ss 1.)

NOTES: Yes - R.I.G.L § 7-6-1 et seq.

Registration Office

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

BIFURCD-REGIOF-NS

REGULATORY BODY: Not Specific

NOTES: Rhode Island Department of Business Regulation http://www.dbr.state.ri.us/divisions/charitable/

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

RI Code § 7-6-46

REGULATORY BODY: Other

STATUTE TEXT: ss 7-6-46. Articles of merger or consolidation. (a) Upon approval, articles of merger or articles of consolidation shall be executed by each corporation by its president or a vice president and by its secretary or an assistant secretary, and shall set forth: (1) The plan of merger or the plan of consolidation; (2) If the members of any merging or consolidating corporation are entitled to vote on the plan, then as to each corporation: (i) A statement setting forth the date of the meeting of members at which the plan was adopted, that a quorum was present at the meeting, and that the plan received at least a majority of the votes that members present at the meeting or represented by proxy were entitled to cast; or (ii) A statement that the plan was adopted by a consent in writing signed by all members entitled to vote on it; (3) If any merging or consolidating corporation has no members, or no members entitled to vote on the plan, then as to each corporation a statement of the fact, the date of the meeting of the board of directors at which the plan was adopted, and a statement of the fact that the plan received the vote of a majority of the directors in office. (b) The articles of merger or articles of consolidation shall be delivered to the secretary of state. If the secretary of state finds that the articles conform to law, he or she shall, when all fees have been paid as prescribed in this chapter: (1) Endorse on the original the word “Filed”, and the month, day, and year of the filing; (2) File the original in the secretary of state’s office; (3) Issue a certificate of merger or a certificate of consolidation. (c) The certificate of merger or certificate of consolidation shall be delivered to the surviving or new corporation, as the case may be, or its representative. History of Section. (P.L. 1984, ch. 380, ss 1; P.L. 1984, ch. 444, ss 1; P.L. 2005, ch. 36, ss 4; P.L. 2005, ch. 72, ss 4.)

NOTES: Secretary of State, Gen.Laws 1956, § 7-6-46

Certificate of Amendments

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

REPORTS-AMMEND-AG

REGULATORY BODY: Attorney General

NOTES: No

RI Code § 7-6-41

REGULATORY BODY: Other

STATUTE TEXT: ss 7-6-41. Effectiveness of amendment. (a) The articles of amendment shall be delivered to the secretary of state. If the secretary of state finds that the articles of amendment conform to law, the secretary of state shall, when all fees have been paid as in this chapter prescribed: (1) Endorse on the original the word “Filed”, and the month, day, and year of the filing; (2) File the original in the secretary of state’s office; and (3) Issue a certificate of amendment. (b) The certificate of amendment shall be delivered to the corporation or its representative. (c) Upon the issuance of the certificate of amendment by the secretary of state, or upon any later date, not more than 30 days after the filing of articles of amendment, that is set forth in the articles, the amendment becomes effective and the articles of incorporation are deemed to be amended accordingly. (d) No amendment affects any existing cause of action in favor of or against the corporation, or any pending action to which the corporation is a party, or the existing rights of persons other than members; and, in the event the corporate name is changed by amendment, no action brought by or against the corporation under its former name abates for that reason. History of Section. (P.L. 1984, ch. 380, ss 1; P.L. 1984, ch. 444, ss 1; P.L. 2005, ch. 36, ss 4; P.L. 2005, ch. 72, ss 4.)

NOTES: Secretary of State: corrections, Gen.Laws 1956, § 7-6-41

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

RI Code § 53.1-4

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: 990 or audited financial statement (if annual income over $500k); 5 R.I. Gen Laws § 53.1-4

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

RI Code § 7-6-55

REGULATORY BODY: Other

STATUTE TEXT: ss 7-6-55. Filing of articles of dissolution. (a) The articles of dissolution shall be delivered to the secretary of state. If the secretary of state finds that the articles of dissolution conform to law, the secretary of state shall, when all fees have been paid as prescribed in this chapter: (1) Endorse on the original the word “Filed”, and the month, day, and year of the filing; (2) File the original in the secretary of state’s office; (3) Issue a certificate of dissolution. (b) The certificate of dissolution shall be delivered to the representative of the dissolved corporation. Upon the issuance of the certificate of dissolution the existence of the corporation ceases, except for the purpose of suits, other proceedings, and appropriate corporate action by members, directors, and officers as provided in this chapter. History of Section. (P.L. 1984, ch. 380, ss 1; P.L. 1984, ch. 444, ss 1; P.L. 2005, ch. 36, ss 4; P.L. 2005, ch. 72, ss 4.)

NOTES: Sec. of State Gen.Laws 1956, § 7-6-55

Judicial Dissolutions

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 7-6-96

REGULATORY BODY: Attorney General

STATUTE TEXT: ss 7-6-96. Interrogatories by secretary of state. The secretary of state may propound to any domestic or foreign corporation, subject to the provisions of this chapter, and to any officer or director of the corporation, any interrogatories that are reasonably necessary and proper to enable the secretary of state to ascertain whether the corporation has complied with all the applicable provisions of this chapter. The interrogatories shall be answered within thirty (30) days after their mailing, or within any additional time that is fixed by the secretary of state. The answers to the interrogatories shall be full and complete and shall be made in writing and under oath. If the interrogatories are directed to an individual, they shall be answered by that individual and if directed to a corporation they shall be answered by the president, vice president, secretary or assistant secretary, or treasurer or assistant treasurer of the corporation. The secretary of state need not file any document to which the interrogatories relate until the interrogatories are answered as provided in this section, and not then if the interrogatory answers disclose that the document is not in conformity with the provisions of this chapter. The secretary of state shall certify to the attorney general, for any action that the attorney general deems appropriate, all interrogatories and answers to them that disclose a violation of any of the provisions of this chapter. History of Section. (P.L. 1984, ch. 380, ss 1; P.L. 1984, ch. 444, ss 1.)

NOTES: Sec. of State may certify interrogatories to AG regarding any action the AG deems appropriate: Gen.Laws 1956, § 7-6-96

RI Code § 7-6-60

REGULATORY BODY: Other

STATUTE TEXT: ss 7-6-60. Jurisdiction of court to liquidate assets and affairs of the corporation. (a) The superior court has full power to liquidate the assets and affairs of a corporation: (1) In an action by a member or director when it is made to appear: (i) That the directors are deadlocked in the management of the corporate affairs and that irreparable injury to the corporation is being suffered or is threatened because of the deadlock, and either that the members are unable to break the deadlock or there are no members having voting rights; (ii) That the acts of the directors or those in control of the corporation are illegal, oppressive, or fraudulent; (iii) That the members entitled to vote in the election of directors are deadlocked in voting power and have failed for at least two (2) years to elect successors to directors whose terms have expired or would have expired upon the election of their successors; (iv) That the corporate assets are being misapplied or wasted; or (v) That the corporation is unable to carry out its purposes; (2) In an action by a creditor: (i) When the claim of the creditor has been reduced to judgment and an execution on it has been returned unsatisfied and it is established that the corporation is insolvent; or (ii) When the corporation has admitted in writing that the claim of the creditor is due and owing and it is established that the corporation is insolvent; (3) Upon application by a corporation to have its dissolution continued under the supervision of the court; (4) When the corporation’s certificate of incorporation is subject to revocation by the secretary of state and it is established that liquidation of its affairs should precede the issuance of a certificate of revocation. (b) Proceedings under this section shall be brought in the county in which the registered office or the principal office of the corporation is situated. (c) It is not necessary to make directors or members parties to any action or proceedings unless relief is sought against them personally. History of Section. (P.L. 1984, ch. 380, ss 1; P.L. 1984, ch. 444, ss 1; P.L. 2018, ch. 346, ss 6.)

NOTES: Secretary of State, Gen.Laws 1956, § 7-6-60

Administrative Dissolutions

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 7-6-96

REGULATORY BODY: Attorney General

NOTES: Sec. of State may certify interrogatories to AG regarding any action the AG deems appropriate: Gen.Laws 1956, § 7-6-96

RI Code § 7-6-56

REGULATORY BODY: Other

STATUTE TEXT: ss 7-6-56. Revocation of certificate of incorporation. (a) The certificate of incorporation of a corporation may be revoked by the secretary of state upon the conditions prescribed in this section when it is established that: (1) The corporation procured its articles of incorporation through fraud; (2) The corporation has continued to exceed or abuse the authority conferred upon it by law; (3) The corporation has failed to file its annual report within the time required by this chapter, or has failed to pay any fees, when they have become due and payable; (4) The corporation has failed for 30 days to appoint and maintain a registered agent in this state as required by this chapter; (5) The corporation has failed, after change of its registered office or registered agent, to file in the office of the secretary of state a statement of the change as required by this chapter; (6) The corporation has failed to file in the office of the secretary of state any amendment to its articles of incorporation or any articles of merger within the time prescribed by this chapter; or (7) A misrepresentation has been made of any material matter in any application, report, affidavit, or other document submitted by the corporation pursuant to this chapter. (b) No certificate of incorporation of a corporation shall be revoked by the secretary of state unless: (1) The secretary of state shall have given the corporation not less than sixty (60) days notice thereof by regular mail addressed to the registered office of the corporation in this state on file with the secretary of state’s office; provided, however, that if a prior mailing addressed to the registered office of the corporation in this state currently on file with the secretary of state’s office has been returned to the secretary of state as undeliverable by the United States Postal Service for any reason, or if the revocation notice is returned as undeliverable to the secretary of state’s office by the United States Postal Service for any reason, the secretary of state shall give notice as follows: (i) To the corporation at its principal office of record as shown in its most recent annual report, and no further notice shall be required; or (ii) In the case of a domestic corporation that has not yet filed an annual report, then to any one of the incorporators listed on the articles of incorporation, and no further notice shall be required; and (2) The corporation fails prior to revocation to file the annual report or pay the fees, or file the required statement of change of registered agent or registered office, or file the articles of amendment or articles of merger, or correct the misrepresentation. History of Section. (P.L. 1984, ch. 380, ss 1; P.L. 1984, ch. 444, ss 1; P.L. 2001, ch. 26, ss 2; P.L. 2001, ch. 268, ss 2.)

NOTES: Sec. of State Gen.Laws 1956, § 7-6-56

4 Notice, Oversight or Filing of Hospital Conversions

Has Statute

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 23-17.14

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: R.I. Gen. Laws Ann. § 23-17.14

Requires Notice or Oversight

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 23-17.14-7

REGULATORY BODY: Attorney General

STATUTE TEXT:

NOTES: R.I. Gen. Laws Ann. § 23-17.14-7

RI Code § 23-17.14-8

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Department of Health, R.I. Gen. Laws Ann. § 23-17.14-8

Requires Filing

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 23-17.14-6

REGULATORY BODY: Other

STATUTE TEXT:

NOTES: Department of Health, R.I. Gen. Laws Ann. § 23-17.14-6

5 Audits

Requires Audit

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 5-53.1-4

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: R.I. Gen. Laws § 5-53.1-4

Audit Threshold

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

AUDITFI-THRESH-NS

REGULATORY BODY: Not Specific

NOTES: All charities; but those with annual income of $500,000 or less may provide Form 990

6 Registration Law

Registration Law

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

RI Code § 5-53.1-2

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Gen.Laws 1956, § 5-53.1-2

7 Exemptions from Registering for Specific Organization Types

Religious Organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

RI Code § 5-53.1-3(a)(13)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Gen.Laws 1956, § 5-53.1-3(a)(13)

Small organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

RI Code § 5-53.1-3(a)(3)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Gen.Laws 1956, § 5-53.1-3(a)(3) ($25k)

Educational Institutions

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

RI Code § 5-53.1-3(a)(1)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Gen.Laws 1956, § 5-53.1-3(a)(1)

Governmental Organizations

Regulatory Action: EXEMPTION

A regulation is NOT defined in the state

ORGTYPE-GOVMNT-NS

REGULATORY BODY: Not Specific

NOTES: NO

Hospitals

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

RI Code § 5-53.1-3(a)(7)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Nonprofit and charitable hospitals: Gen.Laws 1956, § 5-53.1-3(a)(7)

Veterans organizations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

RI Code § 5-53.1-3(a)(8)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Gen.Laws 1956, § 5-53.1-3(a)(8)

Foundations

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

RI Code § 5-53.1-3(a)(6)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Gen.Laws 1956, § 5-53.1-3(a)(6) (religious, educational, non-profit, hospitals, libraries as beneficiaries)

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

RI Code § 5-53.1-3(a)(6)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Gen.Laws 1956, § 5-53.1-3(a)(6)

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

RI Code § 5-53.1-3(a)(3)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Gen.Laws 1956, § 5-53.1-3(a)(3)

Fraternal/ Membership

Regulatory Action: EXEMPTION

YES: A regulation is defined in the state

RI Code § 5-53.1-3(a)(4)

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Gen.Laws 1956, § 5-53.1-3(a)(4)

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

YES: A regulation is defined in the state

ORGTYPE-OTHTYP-NS

REGULATORY BODY: Not Specific

NOTES: specific beneficiary (2), solicit only from corporations/foundations/gov’t (5), public libraries (9), historical societies (10), art museums (11), grange organizations (12), volunteer firefights (14), land trusts (15)

8 Defined remedies

Dissolution

Regulatory Action: REMEDY

YES: A regulation is defined in the state

RI Code § 7-6-60

REGULATORY BODY: Not Specific

NOTES: Secretary of State: Gen.Laws 1956, § 7-6-60

Removal of Board Members

Regulatory Action: REMEDY

A regulation is NOT defined in the state

REMEDYT-BRDRMV-NS

REGULATORY BODY: Not Specific

NOTES: No

9 Oversight of professional fundraisers

Does the state require registration by commercial fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 53.1-8

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Professional Fund Raisers: 5 R.I. Gen Laws § 53.1-8; Professional solicitor: 5 R.I. Gen Laws § 53.1-10

RI Code § 53.1-10

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Professional Fund Raisers: 5 R.I. Gen Laws § 53.1-8; Professional solicitor: 5 R.I. Gen Laws § 53.1-10

Does the state require registration by fundraising counsel?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 53.1-9

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: *5 R.I. Gen Laws § 53.1-9

Does the state oversee commercial-coventuring (e.g. by requiring that the co-venture be registered or by requiring that the charitable organization files the co-venture contract)?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

FNDRAZE-VENTUR-NS

REGULATORY BODY: Not Specific

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

A regulation is NOT defined in the state

RI Code § 53.1-9

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: No, contract must be filed within 10 days of execution. 5 R.I. Gen Laws § 53.1-9

Does the state require specified disclosures to donors?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 53.1-12.1

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: 5 R.I. Gen Laws § 53.1-12.1

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

RI Code § 53.1-9

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: 5 R.I. Gen Laws § 53.1-9

Does the state require annual financial reporting by commercial fundraisers?

Regulatory Action: REQUIREMENT

A regulation is NOT defined in the state

RI Code § 53.1-8

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: Accurate books and records must be maintained for 3 years. 5 R.I. Gen. Laws § 53.1-8 All persons applying for or seeking to renew registration must certify state taxes are paid. 5 R.I. Gen. Laws § 76-2

RI Code § 76-2

REGULATORY BODY: Not Specific

STATUTE TEXT:

Does the state require bonding of professional fundraisers?

Regulatory Action: REQUIREMENT

YES: A regulation is defined in the state

RI Code § 53.1-8

REGULATORY BODY: Not Specific

STATUTE TEXT:

NOTES: A professional fundraiser who has access or the ability to access or control funds that are being solicited shall at the time of making application for registration or re-registration, file with, and have approved by, the director a bond in the sum of $10,000, with the filer as the principal obligor and with one or more sureties. 5 R.I. Gen Laws § 53.1-8