# Incorporation, Board of Trustess, Pros/Cons



## Semper Fidelis (Aug 5, 2010)

I checked some old threads on this and have been dis-satisfied with the sobriety of response.

Incorporation: Why? Why not?

Board of Trustess: Why? Why not?

Third option?

Those that have not incorporated - how do you structure to avoid personal financial liability to individuals. How do you buy property?

I guess what I'm looking for is a sober look at what the benefits of some of these things are, what the liabilities are and what other ways a Church can protect itself against litigation.

I've already anticipated the "The Church shouldn't be licensed by Caeser..." response. While I'm interested in hearing what sphere sovereignty issues the various forms would create, I want those concerns stated in sober language.


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## Edward (Aug 5, 2010)

Doug Kelly's work seems to address some of the pros and cons of incorporation of religious bodies. http://www.pcahistory.org/pca/2-118.doc


Speaking primarily to the property ownership quesiton:

Since law does vary by state (and there have been recent developments in Virginia) consultation with an attorney in your state might be helpful. 

Virginia has a specific provision for unincorporated churches to establish a special purpose corporation to hold property. § 57-16.1, apparently enacted to accommodate the Falwell decision with the state Constitutional provisions prohibiting church incorporation prior to 2007. Apart from that, a court appointed trustee or trustees would hold the property for the church § 57-8. This article might be useful to you in addressing the property question: Conveyance of Church Real Estate

These provisions differ from what is found in some other states, which treat unincorporated associations as entities for some purposes. (See Sections 5 - 10 of the Revised Uniform Unincorporated Nonprofit Association Act, for example http://www.google.com/url?sa=t&sour...7I2MAw&usg=AFQjCNFhb9He8d7pEt2BJPE8Sp-grvU5pg ).


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## rbcbob (Aug 5, 2010)

Render to Caesar those things that are Caesar’s …. 

I would counsel a pastor in Kunming, China differently than one in New York. Here, in God’s sovereignty, you have a stable government, civil and religious rights, and a (as yet) not quite dead tradition of Christianity in the land.
You may properly avail yourself of the inoculation against pandemic litigious mania afforded by Caesar which may be wise in an increasingly malicious climate here.

If you incorporate you will have to give at least a minimum of compliance with such mundane things “officers” of your “corporation”, annual meetings, bylaws, etc. as you have pledged to provide.
None of these things trump or conflict with the actual governance of Christ’s Church according to His Word. Your articles of incorporation may include such proviso’s that protect the supremacy biblical authority and elder rule of the church.


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## larryjf (Aug 6, 2010)

If i'm not mistaken, non-profit incorporation also puts you in compliance with not speaking out politically to some degree from the pulpit. Should the State have the right to control what is said behind the pulpit in such a way?


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## Semper Fidelis (Aug 6, 2010)

larryjf said:


> If i'm not mistaken, non-profit incorporation also puts you in compliance with not speaking out politically to some degree from the pulpit. Should the State have the right to control what is said behind the pulpit in such a way?


 
That's true that there are limits to political speech for non-profit incorporation. Theoretically, however, if a Church was concerned about its limits on what it is permitted to do (i.e. promote certain political candidates) then it does not have to form a non-profit corporation. It could form another kind of corporation that allowed it to speak freely. I agree with some that the primary reason to incorporate is to protect every member of a Church from liability in a litigious society. If you read The Divine Right of Church Government, for instance, it is clear that the ministers believe that Churches ought to be paying taxes as they do not exist above the State in the sphere of civil affairs.

So the question could be posed this way:

1. Incorporate: Yes or No?
2. If Yes, then non-profit or another type of legal entity?

Special thanks to Edward as I found the PCA Study Report to be very helpful to frame the issue for me. I'm not averse to hearing problems that some have with Incorporation but I think that some of the greatest critics neglect to really deal with, no matter how a Church is legally structured, it will have a relationship to the laws of the land. The Church that decides not to incorporate should consciously consider that, if the State decides to pursue litigation against it, it is going to be pursuing litigation against the association of individuals and those individuals will be liable (partially or fully) for whatever has happened within that association.


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## Scottish Lass (Aug 6, 2010)

Semper Fidelis said:


> larryjf said:
> 
> 
> > If i'm not mistaken, non-profit incorporation also puts you in compliance with not speaking out politically to some degree from the pulpit. Should the State have the right to control what is said behind the pulpit in such a way?
> ...


 
Not to be confused with tax-free status, which is not at risk. Churches have this without incorporating, If I recall correctly.


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## Semper Fidelis (Aug 6, 2010)

Scottish Lass said:


> Semper Fidelis said:
> 
> 
> > larryjf said:
> ...


 
Yes and No. From what I've read there is no inherent Constitutional guarantee for a Church not to be taxed. Federal and State governments have to be notified, somehow, that the entity they're dealing with is tax-exempt. Theoretically, any two people (or even one person) can call themselves a Church and if no legal structure is set up to identify them as tax-exempt then the IRS won't treat them as such. That's what I've read at least.


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## Scottish Lass (Aug 6, 2010)

Semper Fidelis said:


> Yes and No. From what I've read there is no inherent Constitutional guarantee for a Church not to be taxed. Federal and State governments have to be notified, somehow, that the entity they're dealing with is tax-exempt. Theoretically, any two people (or even one person) can call themselves a Church and if no legal structure is set up to identify them as tax-exempt then the IRS won't treat them as such. That's what I've read at least.


 
My understanding is that belonging to a recognized denomination or association helps with this.


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## Curt (Aug 6, 2010)

rbcbob said:


> Render to Caesar those things that are Caesar’s ….
> 
> I would counsel a pastor in Kunming, China differently than one in New York. Here, in God’s sovereignty, you have a stable government, civil and religious rights, and a (as yet) not quite dead tradition of Christianity in the land.
> You may properly avail yourself of the inoculation against pandemic litigious mania afforded by Caesar which may be wise in an increasingly malicious climate here.
> ...


 
Just remember what they say in Kunming: "The mountains are high and the emperor is ar away."


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## Edward (Aug 6, 2010)

larryjf said:


> If i'm not mistaken, non-profit incorporation also puts you in compliance with not speaking out politically to some degree from the pulpit. Should the State have the right to control what is said behind the pulpit in such a way?


 
Off topic, but that's an issue of tax exemption, not corporate structure. You can be a non-profit corp or an unincorporated association, but if you engage in partisan politics, you will, in theory, suffer tax consequences. While there is overlap, taxation and structure are different issues.


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## Semper Fidelis (Aug 7, 2010)

Scottish Lass said:


> Semper Fidelis said:
> 
> 
> > Yes and No. From what I've read there is no inherent Constitutional guarantee for a Church not to be taxed. Federal and State governments have to be notified, somehow, that the entity they're dealing with is tax-exempt. Theoretically, any two people (or even one person) can call themselves a Church and if no legal structure is set up to identify them as tax-exempt then the IRS won't treat them as such. That's what I've read at least.
> ...


 
I just read something to the same effect today.


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## torstar (Aug 7, 2010)

Semper Fidelis said:


> I checked some old threads on this and have been dis-satisfied with the sobriety of response.
> 
> Incorporation: Why? Why not?
> 
> ...


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