Read the Latest Blog - Ending Well: A Thoughtful Approach to Dissolution

December 10, 2025 -
By Sport Law Team

The email subject line reads "Board Meeting - Urgent." Everyone knows what's coming. After months of declining registrations, volunteer burnout, and mounting debt, the conversation no one wanted to have can no longer be postponed. Is it time to dissolve the organization?

The decision to dissolve a sports organization is rarely made in the spur of the moment. Boards typically arrive at this conclusion after months of challenging meetings and uncomfortable discussions about whether the organization can continue. The word "dissolution" conveys both a legal and a human goal, which is why it feels heavy.

Why Organizations Choose Dissolution

Most boards begin with a straightforward question: Why are we dissolving? The answer is often driven by a complex combination of emotional and pragmatic factors. It may be that there is no clear leadership prepared to take over, and volunteers are worn out. Perhaps fewer people are registering, or sponsorship offers have stopped coming in. Every season, debt has increased until it seems impossible to move forward. Sometimes leaders recognize that another club or association is better suited to continue the core programs, even though they still believe those programs are important.

Some of the most common questions we see include:

• Who will lead the organization?
• What's another, less complicated option?
• How will the money be divided?
• Could we merge with another organization?
• What are our legal and moral obligations?

By reviewing these factors, the board can make a well-reasoned decision about the future of the organization rather than feeling like they have failed. Additionally, it ensures the organization can clearly communicate the rationale for the decision to members.

Legal Considerations

An essential component of dissolution requires Directors to ensure that the organization continues to meet statutory requirements right up until the date of dissolution. That includes keeping minutes, following the bylaws on how dissolution decisions are made, and communicating with members in the way the bylaws require.

You also need a clear picture of the financial landscape. Boards should confirm outstanding debts, speak with major creditors, and understand the conditions on any funds received through grants or donations. If the organization is a not-for-profit corporation, there are usually rules about where remaining assets can go once debts are settled. In sport, that often means transferring equipment or surplus funds to another club, a provincial body, or a community partner that will continue similar programming. The organization's governing documents, including articles and bylaws, will provide this road map.

Before You Dissolve: Consider the Alternatives

Dissolution isn't always the only path forward. Before finalizing the decision, boards should explore whether other options might preserve the organization's mission while addressing current challenges.

Amalgamation involves merging with another organization that shares similar values and objectives. This can maintain program continuity while reducing administrative burden and combining resources. The process requires careful negotiation around governance structure, asset transfer, and program integration, but it may allow the sport programming to continue under a stronger organizational umbrella.

Program Transfer is another option where the organization dissolves but deliberately transfers specific programs, equipment, or participant registrations to another established organization. This ensures that athletes and coaches have a clear landing place and the community doesn't lose access to the sport entirely.

An early exploration of these alternatives provides greater flexibility to negotiate mutually beneficial outcomes. If another organization shares your values and has capacity, these options are worth serious consideration before proceeding with full dissolution.

The Human Factor and Grief in Dissolution

People do not typically feel neutral about dissolution, even when everyone believes it is the best course of action. For athletes and coaches, there may be a sense of loss at not being associated with their club, or uncertainty about what will happen to their coach. Losing their sense of home might be a concern for coaches. Long-serving volunteers may experience anger or embarrassment at the decision to dissolve. That is one reason why communication is so important.

Grief does not indicate that the board made a poor decision. It indicates that the organization had a purpose.

Designing a Humane Process

It is beneficial to create a comprehensive process that respects both the legal and relational aspects of dissolution. Instead of hurrying to close the doors, start with a realistic timeframe.

With tax filings, member votes, creditor communications, and other legal obligations, dissolution typically takes 12 to 18 months to complete properly. This timeline provides enough space for Directors to file corporate tax returns, resolve outstanding debt, ensure that Board resolutions are captured in the minutes, and give members a chance to vote on the dissolution. Rushing this process often creates legal complications and leaves people feeling disrespected.

Key Steps in the Dissolution Process

Here are some of the steps that we've helped clients with as they look to dissolve:

Step 1: Make an informed decision that meets legal requirements

• Review your governing documents (articles, bylaws) to understand the required process
• Confirm you have the necessary board and member approval thresholds
• Consult with legal counsel to understand your jurisdiction's specific requirements
• Document the rationale clearly in board minutes

Step 2: Proactively communicate with stakeholders

• Reach out to staff, registered participants, devoted volunteers, coaches, officials, sponsors, and other partners
• Explain the decision with honesty and compassion
• Give people time to process the news before moving to next steps

Step 3: Create spaces for questions and dialogue

• While not all organizations will need this step, some might benefit from holding town halls or virtual meetings
• Offer one-on-one conversations for those who need them
• Be prepared to answer difficult questions with transparency

Step 4: Honor your legacy and preserve important artifacts

• Ensure that trophies, historic photographs, uniforms, and other precious legacy items have been gifted to another home or disposed of honorably
• Sport has so many cultural items that may find a home with another club, a local museum, or community center
• Consider creating a digital archive of important documents and memories

Step 5: Create meaningful closing rituals

• Mark the end of the organization's contribution to sport and to the community
• Invite people to express their gratitude, share memories, and come together
• This allows members to complete their experience with the organization in a respectful and honoring way

These steps may not remove the emotions related to dissolution entirely, but they reduce confusion and mistrust. They also signal that the board respects the time and care that people invested.

Endings That Honor the Story

A thoughtful dissolution process gives people a chance to make sense of what they have built together. That might mean inviting past leaders to a final event or writing personal thank-you notes to key volunteers and staff. These gestures are not about glossing over the hard parts. They are about recognizing that even if conflicts arose, a real community was created.

Dissolution is more than shutting down a corporation. It is a relational process that blends careful legal compliance with intentional communication, grief work, and meaningful ritual so that all members feel their contributions truly mattered.

The way an organization ends shapes how people remember it and how they approach future community involvement. By approaching dissolution with both legal rigor and compassion, boards can close one chapter while protecting the legacy of what was built.

If your board is wondering whether dissolution or amalgamation is the next right step, you do not have to navigate these questions alone. Sport Law has supported many organizations through endings and new beginnings and can help you understand both the legal and human implications of each path. If you are considering dissolution and need experienced guidance, we would be happy to help. Please contact us at hello@sportlaw.ca.