How do articles of incorporation protect our ministry?


February 28, 2013

While your church’s most important “business” is reaching people with the Gospel, cultivating spiritual vitality, and healing a broken world, certain business (corporate) matters need regular attention. We often get questions in the conference office from churches that are ready to sell property and have discovered that the name on the deed doesn’t match their church’s current name, or they can’t find their articles of incorporation, or they don’t know if they are incorporated or under what statute. If you discover these discrepancies a week before the closing date, you may lose the sale or purchase opportunity or earnest money and incur legal fees.

These types of situations can result in loss of trust in the church’s ability to manage its affairs and impair the missional outreach that is the vital core of your church’s work.

Here is a “homework” assignment to help you prepare for these situations and protect church assets and those elected to lead your church.

  1. Find your articles of incorporation and read them. If you are a 317A corporation, research your incorporation status at the Minnesota Secretary of State’s website (http://www.sos.state.mn.us/). Start by searching under your current name and any known variations. Be aware that the name you are using may not match exactly the way it was filed with the secretary of state. If you are a 315 corporation, you more than likely filed with the county and will not find the name on the Secretary of State’s website.
  2. If your church is a 317A corporation and has not annually filed with the state as required, your corporate status may have been dissolved. Contact the Secretary of State’s office to reinstate the corporation.
  3. Review your articles of incorporation to make sure they are up to date. For example, if your trustees want to meet or vote by conference call or e-mail, your articles must provide for that. Find a template of basic articles of incorporation on the General Council of Finance and Administration website (www.gcfa.org). You must work with an attorney who will make sure that your articles conform to Minnesota statute and are appropriate for your church.
  4. Considering changing your church’s name (commonly called dba, or “doing business as”)? You will need an attorney to help you do this correctly. Please work with your bank and contributors to ensure that the church’s accounts are properly named, donors know to whom to write their contribution checks, and there is no doubt about who owns the funds in the church’s accounts.
  5. Your corporate officers must be elected according to your articles of incorporation, the United Methodist Book of Discipline, and Minnesota statute. The corporate officers are elected from and by the church trustees. Make sure that the trustees approve corporate resolutions that name authorized signers of legal documents and on the church’s bank accounts. Neither the chair of the administrative council nor your pastor is the president of the corporation. Further, your pastor is not an officer of the corporation and should not be a signer on bank accounts or other legal documents.
  6. Sign legal documents properly. Officers and others authorized by the trustees to execute deeds or contracts should sign their name followed by their elected position title. For example, “Jane Doe, president” or “John Doe, secretary.” They can add the church’s name if it is not printed on or near the signature line.
  7. Be prepared to hire an attorney. An attorney will help you comply with Minnesota statutes, with the Book of Discipline, and meet the needs of your church.

You will do a great service for your church if you care for these things now. Potential loss of an opportunity to sell or buy property could be costly and dissolution of corporate status could expose trustees and others to legal liability. These types of occurrences can have detrimental effects for your church and its primary work of making disciples.

Find more information about corporate matters at www.gcfa.org (see “Legal Manual”).

Barbara Carroll is director of finance and administration for the Minnesota Annual Conference.




Minnesota Annual Conference of the United Methodist Church

122 West Franklin Avenue, Suite 400 Minneapolis, MN 55404

info@minnesotaumc.org

(612) 870-0058