Zenas’ Brief – February 2024
Registering and Maintaining Nonprofit Status with the State
The church is the gathering of the saints for the purpose of worshipping God, edifying the saints, and evangelizing to the world. The church does not need to be recognized by the state to be a church. For example, the saints may gather in a home and worship God together. A house church is no less a part of Christ’s Church because it meets in a home instead of in a separate building.
That said, there are benefits to incorporating the church as a nonprofit with the state. As a nonprofit, the church grounds (note this does not include house churches) will likely qualify as exempt from property taxes. Plus, if the church gets sued, the pastors and church body are not personally liable for any negligent act taken on behalf of the church. So, there are benefits to incorporating with the state.
If you choose to incorporate with the state, it is important to register your church and maintain its status as a nonprofit organization. To incorporate, you will need to file Articles of Incorporation with your State’s Secretary of State, which will include: (1) the name; (2) the purpose of the church; (3) the names and addresses of the directors or trustees; (4) the name and address of the incorporator; (5) whether the church will have members (members here means corporate members, not church members); (6) the registered agent (this is the person who receives any lawsuits); and (7) a dissolution clause. After you file the Articles of Incorporation and pay a small fee, your church will be incorporated with your respective state.
Each year, you will need to file an annual report with your state. The purpose of the annual report is to notify the Secretary of State that your church is still alive and active. The annual report usually takes 10-15 minutes to fill out and is your chance to update your church’s information with the state.
You will pay a small fee when filing the annual report. The small fee is worth it to maintain your corporate status. If you fail to file your annual report, your church’s corporation status will expire putting your pastors and congregants at personal risk if your church is sued. Finally, if your corporate status is expired, you will have to file for reinstatement and pay a fee (the reinstatement fee will be higher than the renewal fee).
If you have any questions or need assistance with registering or maintaining your corporate status with the state, please do not hesitate to contact your UISBC Legal Team.