Church Practice

Church Practice

Operations Related Policies and Procedures

As a general statement, church and ministry organizations are accorded a greater degree of autonomy and noninterference by public regulatory agencies than other non-profit corporations and for profit corporations. However, various regulatory and statutory requirements do affect religious non-profit corporations in all states. Furthermore, various federal and state laws impact the management and administration of employment and tax issues. As a general preposition, in some states, churches are not required to make the annual filings that are required of other non-profit organizations (i.e. registration with the Attorney General, federal income tax returns, state franchise tax returns, etc.). However, there are exceptions to this general rule, which obligate church and ministry organizations to comply with such reporting obligations.

We offer the following services to our church clients:

  • Development of comprehensive church oriented Bylaws/Constitution.
  • Evaluation of the types of reports and advice on which the Board of Directors is permitted to rely under the general legal standard of care.
  • Assistance in the development, and periodic review, of church corporate and Board of Directors policies.
  • Assistance in the preparation and review of church corporate resolutions.
  • Review of proposed church corporate activities for assessment of risk and liability exposure.
  • Assessment of updated legal developments affecting non-profit organizations to ensure proper corporate authorization (and evaluation of the potential necessity to amend existing church governing documents to reflect such developments).
  • Advice and counsel regarding maintenance of tax-exempt status.
  • Review and revise, if necessary, any transactions and documents that may arise if and when the non-profit expands its activities and functions.
  • Participate in meetings of the Board of Directors (regular and special), and assist in the proper documentation of such meetings.
  • Assist in the preparation of reports to the Board. *Coordinate and prepare filings connected with both federal and state “unrelated business income tax” (“UBIT”). [In most instances, this will include rental income received by a church organization from commercial real estate holdings and sometimes profits from real estate sales].
  • Coordinate and prepare periodic informational filings to applicable agencies.
  • Coordinate and prepare filing of annual and biennial reports with Secretary of State, Franchise Tax Board or Attorney General, as applicable.
  • Coordinate and prepare designation of agent for service of process (only if changed).
  • Advice and counsel (and development of appropriate guidelines) for limitations on political activities to ensure compliance with applicable IRS laws and regulations.
  • Advice and counsel of church governing bodies on First Amendment issues and limitations.

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