Bylaws need to be updated to reflect the nonproft organization's current structure and framework. Even a change in the location of the organization's “corporate” office needs to be reflected in a revision to the bylaws.
Church bylaws, articles of incorporation and in some cases a mission statement or constitution are crucial governing documents. These documents establish and define the church’s purpose and the church’s governing process. Bylaws include details on the composition of the board and their responsibilities, how operational decisions will be made, whether the church will be a membership organization, how property will be held and even how it will be distributed if the organization ceases to operate.
Besides dictating the church structure and helping to define the church’s purpose, the contents of church bylaws are critical to the church’s ability to incorporate and to obtain 501(c)(3) tax exempt status. Incorporation as a legal entity means that the church (as opposed to individual members or ministry staff) can enter into contracts, take on debt and assume liability for church activities.
Incorporation is highly recommended. To incorporate, the religious group must have properly drafted articles. For example, to incorporate as a nonprofit religious organization in the California, the articles of incorporation must state an exact church name; the general and specific purposes of the church; that the church is not organized for private gain of any person; restrictions on political activities; language regarding use and distribution of church property and assets; name and address of agent for service of process. The articles also may include a designation of the initial directors.
Failure to include the appropriate language will result in the California Secretary of State rejecting the articles and the church will not gain the benefits of being incorporated as its own legal entity. Also, when a religious organization applies to the IRS for affirmation of federal tax exempt status, the contents of the articles of incorporation and bylaws will be examined.
Given the strict requirements to incorporate and to obtain a determination letter from the IRS regarding 501c3 status, it is in the organization’s best interests to make certain that the bylaws and articles of incorporation contain the appropriate language at the outset.
By enrolling in our Nonprofit Advisor ServiceSM religious organizations can get the help they need to draft governing documents, incorporate, train their boards and staff, and more. Call (310) 242 - 5674 for more information.