Religious institutions of all faiths are generally structured as nonprofit organizations. Many of these entities are registered with the Internal Revenue Service (IRS) as 501(c)(3) organizations. Due to this, they are subject to specific business and accounting standards and responsibilities. Even smaller churches that are not registered with the IRS are considered nonprofits by their very nature.
All religious organizations, including churches, mosques, temples, and synagogues, can benefit from legal counsel. While it may seem odd for a church to be involved in a legal situation, it is commonplace. Religious entities, especially large ones, often have employees, governing documents, real estate holdings, investments, and tax and compliance issues that require legal counsel. A religious or nonprofit entity will often call upon a church law attorney when there is a crisis or unexpected situation. An attorney can help a church or another type of nonprofit institution avoid damaging legal problems.
Common Business Problems for Churches
The following examples are circumstances when a church should consult with an attorney. This is not an inclusive list, but it represents some of the top reasons a church can benefit from having a trusted attorney.
Planning a New Church
An attorney can help create a nonprofit structure and advise on other items related to the new church, including taxes, finances, building and zoning problems, and more. For both new and existing churches, a church law attorney can help create or amend governing documents to ensure compliance with nonprofit laws.
An attorney knows all the requirements and documentation needed for a church to become a nonprofit. An attorney can also help the church with the following:
- Obtain tax-exempt status
- Establish a Federal Employer Identification Number (FEIN)
- Incorporate with the state
- Ensure fulfillment of all other legal requirements
An attorney can help the entity create, revise, or update bylaws, policies and procedures, codes of conduct, and other administrative guidelines that ensure compliance with nonprofit laws and reduce risk.
Additionally, on occasion, a church will offer social services or generate revenue sources that need to be separate from the church. An attorney can structure these entities according to law. Also, a church will sometimes buy or sell land, expand existing real estate, or build new churches or offices. A church law attorney can help guide them through these often complex transactions.
Many churches have at least some paid employees and will almost always have many volunteers. Whether paid or not, a church should have clear expectations and standards for anyone working on their behalf, including background checks and proper supervision. Employee and volunteer handbooks are a must as well. A church law attorney can help with all these needs.
Other employment policies, such as compensation, benefits, hours, hiring, and firing, should also be put in writing and reviewed by a church law attorney. Additionally, expectations and responsibilities for pastors, ministers, and other spiritual leaders should be reviewed by an attorney and become part of the church’s governing documents.
Churches often hire outside entities for construction work, landscaping, cleaning, supplies, and other needs. An attorney should review all contracts and other documents to ensure compliance with financial rules and regulations.
Nonprofit status requires specific IRS reporting and accounting procedures. An attorney can advise on lawful financial operations. Nonprofits are subject to specific laws regarding charitable solicitations and reporting funds, so consultation with an attorney is a good idea.
At times, a church may decide to issue bonds, finance a project, or invest sizeable funds. An attorney can ensure that the investment is beneficial and not overly risky.
Sermons, music, art, and even Sunday school lessons could be considered a church’s intellectual property. Laws regarding intellectual property can be complicated, so an attorney needs to help the church understand what is and is not intellectual property.
Crisis Management and Litigation
An attorney needs to be involved in any type of accusation, publicity, or public or private allegation of misconduct. Misconduct could be related to finances, sexual abuse, elder abuse, or any other issue that could damage a church’s reputation or harm its members, leaders, or the general public. Having a trusted attorney before a crisis hits is the best solution for effective crisis management.
Sometimes, a church leader or member will be uncomfortable with a financial transaction or other issue or activity within the church. A legal advisor can help ease minds and ensure legal and ethical proceedings.
Occasionally, a religious organization will receive a question from the IRS, the media, an attorney, or even a church member regarding a potentially sensitive or damaging issue. An attorney should always be on call to respond.
Church leaders, members, contractors, vendors, or volunteers that harm children or others can fall through the security cracks. Maybe the church did not do a thorough background check, or perhaps the church knew of prior sexual abuse but did not report it. Whatever the circumstance, a church law attorney can counsel how to prevent sexual abuse through policies and procedures. If sexual abuse does occur, contact an attorney immediately as there are strict timeframes for reporting these crimes.
At times, a church may propose or conduct financial or other activities that benefit a family member or a church leader or employee. Whenever there is a potential for conflict of interest, consult an attorney for guidance.
Although no one likes to think that someone could sue a church or church leader or member, it happens more often than one might think. A church law attorney familiar with representing religious organizations must be involved immediately when a lawsuit is filed or threatened. Laws change, IRS requirements change, employees change, and finances change. Every church should review all aspects of its operations and finances with a trusted attorney every year.
Churches will often provide accommodation to their leadership, either onsite or offsite. Involve a church law attorney to ensure compliance with governing documents and nonprofit laws.
Churches will often sponsor or engage in ministries that help others, whether in their local area, state, country, or abroad. Any church with activities, such as building orphanages in a foreign country or sponsoring camps for disadvantaged youth, should consult with an attorney. The church will need to understand how it may be liable while sponsoring or conducting these activities.
There are many reasons why a church needs an attorney. An attorney can effectively handle some important business needs. For this reason, every church should have legal representation.
Church Law Attorneys at Anchor Legal Group, PLLC Advocate for Religious and Nonprofit Organizations
Churches are not immune to legal issues and lawsuits. They also need to follow nonprofit laws and adhere to accepted business practices, financing, reporting, and fundraising. The church law attorneys at Anchor Legal Group, PLLC represent religious and other nonprofit organizations. They know the liability a church can face, whether it involves finances, its members or ministries, or its contractors or volunteers. If your church needs an advocate and adviser, call us at 757-LAW-0000 or contact us online for an initial, private consultation. Located in Virginia Beach, Virginia, we represent clients throughout Chesapeake, Norfolk, Suffolk, Portsmouth, Newport News, Hampton, and Eastern Shore. We also serve our clients throughout the United States through our network of associated attorneys.