While churches tend to the spiritual well-being of individuals, their relationship with the real world is more mundane. Legally speaking, churches, mosques, synagogues, temples, etc. are structured as non-profits, with all the privileges and responsibilities this legal entity implies.
The freedom of religion in the USA is expressed in many ways, including a multitude of variations of cults and ways to worship from Protestant mainline, and Evangelical churches, Traditional Black Church, to synagogues, mosques, shuls, temples, and others.
Many of these centers of worship are small operations and are not attached to a big, long-standing non-profit. You can see many of these small churches driving by immigrant neighborhoods in cities.
Sadly, some of these places of worship do not look for an attorney unless they are confronted with a legal crisis.
This is a mistake. Crises may be preventable with good counsel’s advice, preparation, and guidance.
The reality is that principals at churches and other places of worship should look for legal advice from an attorney familiar with corporate formation during the planning and creation stages.
However, it is never too late to put many governance items in order and work on non-profit hygiene, in addition to managing the growth and development of operations of a religious non-profit.
These are some of the 10 compelling reasons churches and places of worship should look for an attorney:
1.-Incorporation. The entity will need to create, revise or change governing documents according to the non-profits laws of the USA and the state where it operates.
2.-Non-profit checklist. A lawyer with non-profit experience can guide you through all the steps of setting up the non-profit and obtain the needed documentation such as state incorporation, obtain the 501c3 tax exempt status, the Federal Employment Identification Number (FEIN), the creation of the bylaws and other documents to be able to start operations.
3.-Nonprofit compliance. The religious entities need to create and revise, with a lawyer’s advise, a set of policies and procedures such disclosures, codes of conduct, employee’s handbooks, conflict of interests statements, resolutions, etc. to ensure that is doing all in its power to follow the law and adopt best practices for corporate compliance. Not only to avert crisis but as part of normal business practices.
4.-Managing employees. These non-profit entities depend for their administration on employees and deal with the same issues any enterprise deals with such as hiring, firings, training, etc. Engage a lawyer not only to fix an unsavory relationship with a former employee but to prevent any conflict down the road.
5.-Counsel should work in coordination with an accountant to check the sources of revenue and accurate reporting to the IRS, especially if the church is looking for new ventures.
6.-An attorney can assist with risk management and revise policies and procedures.
7.-A good counselor can guide the non-profit principals to review contracts, real state purchasing or selling, and other transaction documents.
8.-The religious non-for profit may need to create other legal entities to shelter the main corporation if it plans to engage in activities such as offering social services, other ventures or sources of revenue.
9.-Religious nonprofits should have an attorney on speed dial to answer appropriately any inquiry from the IRS, bank, in response to a lawsuit, breach of contract or other legal inquiries.
10.-There may be intellectual property to protect. Many do not have idea of how often the name of a church is stolen by competitor pastors. We do and we recommend looking into protecting the many aspects of intellectual property including trademarks and copyrights.
Pastors and spiritual leaders must be sensitive to their responsibilities as a non-for-profit and engage one of the best allies, a trusted lawyer.
Marcos E. Garciaacosta is a business and intellectual property attorney. He has experience advising religious non-profits in legal matters. Schedule an appointment at (480) 324-6378 for a consultation.