North Carolina Nonprofits Face New Annual Reporting and Governance Requirements in 2027

Nonprofit corporations will ring in the new year with new obligations under the North Carolina Nonprofit Corporation Act. During the North Carolina General Assembly’s 2026 Session, Governor Josh Stein signed House Bill 517, which provides significant changes to nonprofit governance and compliance rules regarding annual filings and board composition.

Nonprofit corporations should begin preparing for the changes established by House Bill 517, which take effect January 1, 2027. The Brooks Pierce Nonprofit and Charitable Organizations Team is here to help your organization navigate the transition, review governing documents, and address any compliance gaps before the new year.

1. Nonprofit Corporations Must File Annual Reports

Beginning in 2027, every nonprofit corporation organized in North Carolina and every nonprofit corporation organized in other states but conducting business in North Carolina will be required to file an annual report with the North Carolina Secretary of State. The deadline to file the annual report is November 15 of each year. The annual report can be filed with a paper copy for a filing fee of $25.00 or filed electronically on the North Carolina Secretary of State’s website for a filing fee of $18.00.

The annual report must include the following information:

• The name of the corporation and the state or country under whose laws it is incorporated;
• The street address and mailing address (if different from the street address) of the registered office;
• The county in which the registered office is located;
• The name and email address of the registered agent;
• The address and telephone number of the principal office;
• The names, titles, and business street addresses of all principal officers;
• The name, mailing address, email address, and telephone number of an individual who is authorized to provide information regarding persons with the authority to bind the corporation;
• A brief description of the nature of the corporation’s activities; and
• An email address for the corporation.

Failure to timely file an annual report may present serious consequences for the corporation. The North Carolina Secretary of State offers a 60-day no-penalty window for each nonprofit corporation to file its annual report. After that period expires, the Secretary of State may presume that the annual report is delinquent. Delinquency in submitting an annual report gives the Secretary of State grounds to have the corporation administratively dissolved.

Establishing an internal review process and calendaring the November 15 deadline can help ensure that future annual reports are accurate, consistent, and submitted on time. Counsel can also simplify the process by helping your organization gather and verify the required information, prepare the annual report, and file it before the deadline.

2. A Board of Directors Requires At Least Three Directors.

Starting January 1, 2027, a board of directors must have at least three directors with an exception for private foundations who will continue to have a permitted minimum of one director. In the event of a vacancy on the board, the board will be temporarily excused from complying with the minimum number of directors requirement until such vacancy is filled. 

Nonprofit corporations should review their articles of incorporation, bylaws, and current board composition to determine whether changes are necessary. These new requirements also provide an opportunity for nonprofits to evaluate what board size and composition are appropriate for the needs of their organization.

For example, a small board may be more efficient at making decisions than a large board. However, a large board can establish committees and delegate responsibilities for a more streamlined decision-making process. Directors on a small board often feel a deeper personal connection to the mission but may face burnout and overextension. A large board is more likely to have a diverse group of directors with specialized knowledge skills in a variety of professional fields. Depth of expertise, on the other hand, can also create a loss of cohesion and bolster internal politics among directors. 

As always, counsel can provide guidance on nonprofit governance to support the board in establishing internal balance, keeping day-to-day work on track, and protecting the organization from legal risks. Counsel can also keep organizations informed of critical legal developments that may impact their operations.

If you have any questions about these new requirements and how they may affect your organization, please contact Bob Saunders and Janelle Ariota.