The Law and Local Churches

Resources for running a Free Church

Most of the churches that are not presently incorporated never have been. They have simply existed since before incorporation was common. In some cases, church leaders do not even know whether they are incorporated or have 501(c)3 status. Some have such long-standing relationships with governments and local vendors that nobody ever asks about them. Someone from a church may have applied for various tax-exempt numbers years ago, the government and the church's vendors may have them, but the church has long forgotten them. Or, everyone may simply be making an exception for these well-known, well-loved churches. A long-time church may be able to effectively operate this way, but they will not be helpful to brethren starting a new free church. Other long-time free churches do have members who can explain their operating methods quite well and who would be very helpful to new congregations.

If you are starting a new congregation, try to get help from someone experienced with starting new congregations—especially someone from your state.

If you have an existing congregation, but would like to begin operating as a free church, it is vital that you properly terminate the previous corporations and tax exemptions. The basic sequence is to start the new free church, transfer all of the assets from the corporate church to it in some way, then terminate the old organizations. Talk to someone who has done it before.

1. Heal Our Land Ministries
Web site: www.hushmoney.org

This is the most thorough, though the most expensive source I found. This laborer is definitely worth his hire. Some of the quotes and ideas for this paper came from their writings and from notes of their conference that I attended (now available on video tape). Peter Kershaw and his family are the driving force behind Heal Our Land Ministries. They have an excellent 150-page full-size book entitled In Caesar's Grip. I have studied it from cover to cover and agree with nearly all of it. I found only a dozen statements with which I had some disagreement—none of which negate the overall message of the book. It contains much information on the history of religious freedom and free churches and why we need them today. The forward was written by three knowledgeable people: George Hansen, a USA senator from Idaho (1965–1969, 1975–1985), Howard Philips, the Constitution Party presidential candidate, and Steve Nestor, a retired IRS Senior Review Officer. The Heal Our Land Ministries web site is quite small. The best information is the set of videotapes and conference syllabus. It is expensive but very reasonable compared with the cost of an attorney setting up a corporate church. The syllabus has many sample documents for establishing a church, obtaining sales tax exemptions, how to terminate a corporate church, etc. It explains why such documents should use Biblical terms, not corporate legal jargon.

2. Linden Baptist Church
Web site: http://www.biblicalexaminer.org/corp.htm

This group offers a 16-page article, Church, Inc., by Ovid Need free on their web site. It contains a lot of worthwhile background information on incorporation from the Bible and legal sources.

3. Startchurch.com
Web site: www.startchurch.com

This is one of the many companies that promotes church incorporation, 501(c)3 and other government processes for churches. For a fee they claim to send all the necessary information to start an incorporated church recognized by the state. What are their reasons for so doing? 1) State recognition makes an organization "believable", so people will believe in it, 2) Some churches miss out on million-dollar donations because they can't prove they are 501(c)3 to the donor, 3) Incorporating early will save many thousands later (though they did not say how), 4) "every possible measure needs to be taken to ensure that the Constitution and Bylaws agree with the corporate documents", 5) Sales Tax exemption saves money. The many important biblical and legal issues raised by this paper are rarely ever mentioned in this site or ones like it.

4. Legal Information Institute Cornell Law School
Web site: www.law.cornell.edu/uscode/html/uscode26/usc_sup_01_26.html

This web site has the entire Internal Revenue Code (Title 26) online with search capabilities. Many other laws and cases can be found through www.findlaw.com. Obviously, not everyone is going to become an expert in finding and understanding laws. But if you ever read other literature and wonder, "Does the law really say that?" this is one easy way to read the law for yourself.