Why and How to Incorporate Your Church
If your church or ministry is already incorporated, many states require annual paperwork to maintain your corporate status. This includes submitting a simple annual report to the Secretary of State’s office.
When an organization becomes incorporated, that means it legally holds the same rights and responsibilities as an individual. There are many reasons churches and other ministries should consider incorporation. The most important is to protect individual members from personal liability associated with the negligent actions of fellow members.
Other benefits of incorporation include:
Clarification of the ministry’s purpose, procedures, and vision.
Eligibility to apply for and receive grants through federal or faith-based organizations and foundations.
Eligibility to receive special mailing rates and other discounts from vendors.
What are the risks churches face by not incorporating?
According to Richard R. Hammar, author of Church Law & Tax Report,
“Members of an unincorporated association are individually liable for [wrongful] acts of agents or employees of the association if the [act] is committed within the scope of their authority.”
This means all members of an unincorporated church can legally be found responsible for the negligent or criminal acts of one of their fellow members.