How to Incorporate a Church Organization

Incorporate your church.

There are many different types of church organizations from men's, women's and youth groups to other organizations whose purpose is to advance the mission of the church. If a church organization chooses to incorporate, it must follow the state laws regarding incorporation procedures. Most church organizations qualify as tax-exempt organizations, and therefore must also follow the additional state and federal laws to establish this tax-exempt status.

Instructions

1. Choose a name for the organization. Check with the appropriate state agency to verify that the name is available.

2. Create a mission statement for the organization. This statement must include the purpose of the organization as a religious organization.

3. File articles of incorporation with the applicable state agency. Articles of incorporation must include the organization's name, headquarters, and purpose.

4. Select members for the organization's board of directors. The board of directors governs the organization, and votes on all important decisions.

5. Form bylaws for the organization. The bylaws should describe the management and operating procedures of the organization.

6. Apply for federal tax exemption by filing a Form 1023 with the Internal Revenue Service (IRS).

   Many church organizations qualify for federal tax exemption under Internal Revenue Code Section 501(c)(3). To qualify, these organizations must be exclusively for religious or other charitable purposes; they cannot be intended to produce monetary gain for any private individual or shareholder; they must not engage in substantial activity to influence legislation; they are not allowed to be involved in political campaigns; and they must not engage in activities that are illegal or that violate public policy.

7. Apply for state and local tax exemption with the appropriate agencies. To apply, check with the state and local departments of finance and taxation for the necessary forms.

8. Check to see if your city requires a license to solicit funds if the organization plans on fundraising. Apply for the necessary license.

Tips & Warnings

• Although all the above-mentioned forms may be filed without legal assistance, it is very advisable to seek legal assistance from an attorney or a public interest organization that supplies legal advice.

• For more information regarding federal tax, the IRS provides publications and forms that may be downloaded from its website at www.irs.gov, or by calling [phone].

• For tax exemption consideration, the IRS distinguishes between "church auxiliaries," and "religious organizations." These definitions are fully described in the IRS tax guide for "Churches and Religious Organizations" found at http://www.irs.gov/pub/irs-pdf/p1828.pdf

References

• National Association of State Charity Officials
• Foundation Center; Establishing a Nonprofit Center
• IRS; Application for Recognition of Exemption
• IRS; Tax Guide for Churches and Religious Organizations