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Disclaimer: This document is for information only and does not represent legal, tax or accounting advise.
What is a Religious Nonprofit Corporation?
A Religious Nonprofit Corporation is the incorporation of the office of a church or religious society; an integrated auxiliary.
Does this mean I have to form a church?
No. Oregon does not have a definition of what a church is, nor do they require a definition.
Will the IRS need proof of being a church?
No. Like the state of Oregon, the IRS does not have a definition of a church, and they do not require one. (See Publication 557, page 25)
Do I need to be a credentialed minister, priest, or other type of religious facilitator?
No. Credentials and/or documentation are not required when filing in the state of Oregon.
What is the cost to establish a Religious Nonprofit Corporation?
South Beach Missions is a Registered Agent for Religious Nonprofit Corporation.
Who are the owners or shareholders of a Religious Nonprofit Corporation?
A Religious Nonprofit Corporation has no owners or shareholders. It is the incorporation of an office. A single person occupies that office (i.e. they are the Office Holder or Patriarchal/Matriarchal Overseer) and they are in full control of all assets owned/controlled by that office for and on behalf of the trust of the “Church” or Religious Society.
Does a Religious Nonprofit Corporation have a designated lifespan?
No. A Religious Nonprofit Corporation is established to function in perpetuity. Upon the retirement or demise of the Office Holder a designated individual would assume that position and continue with the control and management of all assets.
Project or The Heartfelt Institute would be appropriate. And, it is not a good idea to include a personal name such as Jake Smith’s Crusade to Change the World.
Does the Religious Nonprofit Corporation need an EIN (federal Employee Identification Number)?
Yes. This is obtained by the Registered Agent once the Religious Nonprofit Corporation has become a legal entity with the state.
What do I need to establish a bank account for the Religious Nonprofit Corporation?
Normally, you will need the Articles of Incorporation and an EIN. But call the bank to make sure.
Does this mean there is no registered agent required in Arizona?
No, all corporations must have a registered Statutory Agent.
Is a Religious Nonprofit Corporation tax-exempt?
In accordance with Publication 557 (see page 25) a “Church” and its integrated auxiliary are tax exempt and can receive tax deductable contributions.
Does this mean a Religious Nonprofit Corporation is the same as a Non-profit Corporation [501(c)3]?
No. 501(c)(3) governs non-profit corporations however not all non-profits fall under this statutes such as a CorpSole. This is due to IRS Tax Code 508.
Does the Religious Nonprofit Corporation still have to file a yearly statement with the IRS?
No. IRS Tax Code 6033 clearly states there does not exist an annual file requirement with the IRS. Having said that if a contract is created such as a 1099 this would trump 6033.
Are there any other yearly reporting requirements to the IRS?
No.
Are there any initial reporting requirements to the federal government or to the IRS?
No. A Religious Nonprofit Corporation is not required to let the government or IRS even know that it exists.
Then how will the IRS know that a specific Religious Nonprofit Corporation is exempt from paying taxes?
Religious Nonprofit Corporation are created under the “not-for-profit” laws of the State. The IRS asks nothing regarding the formation of a corporation and which statutes it falls under. The IRS deals with taxation.
Does the Religious Nonprofit Corporation have to file a yearly tax statement with the state of Oregon?
No.
Can a Religious Nonprofit Corporation accept tax-deductable donations?
Yes.
Can a Religious Nonprofit Corporation own assets?
Yes. It can own anything that an individual can own—house, car, computer, land, stocks, etc.
Can a Religious Nonprofit Corporation be the member (owner) of an LLC?
Yes. It can be the sole member of an LLC or it can be one of two or more members. It can also be the/an owner and manager of an LLC, if you choose. –Though, there are differing opinions on this point and you may want to investigate this further as to the pros and cons.
Can a Religious Nonprofit Corporation be used for asset protection?
Yes in that if someone sues you and you own no assets and the Religious Nonprofit Corporation does, those assets are protected in so far as they are not your assets.
Can a Religious Nonprofit Corporation have employees?
Yes. But it would not be a good idea. If a Religious Nonprofit Corporation has employees or contractors it must file each year with the IRS. This is something you will likely want to avoid. Remember, the IRS does not know that a Religious Nonprofit Corporation exists and it would be to your advantage to keep it that way. If you need employees and/or contractors that you 1099 at the end of the year, have the Religious Nonprofit Corporation own an LLC that would do this.
Can the Religious Nonprofit Corporation give away/donate money?
Yes.
What are some of the other financial activities a Religious Nonprofit Corporation can participate in?
The best rule of “thumb” is to think of a CorpSole as a person. In most cases whatever you can do a CorpSole can do.
What are some of the activities a Corp Sole can not participate in?
A CorpSole cannot enter into any agreement that relies on the death of the person as a condition to fulfill the contract, i.e. Joint Tenancy Deed.
Can the Religious Nonprofit Corporation pay me a salary?
Yes. However, the Religious Nonprofit Corporation would then have to contract with the IRS regarding withholding taxes, which means quarterly and yearly statements, etc. Plus you will likely have to deal with your state concerning Workman’s Compensation insurance. If you wish to maintain the anonymity of the Corp Sole (highly recommended), have it own an LLC which pays you a salary or pays you as a contractor. But understand, any salary or contractor fees paid to you directly will be personal income and you will be obligated to pay the appropriate taxes.
How do I establish credit history for the Religious Nonprofit Corporation?
— open a bank account in the name of the Religious Nonprofit Corporation
— obtain a secured credit card through the bank in the name of the Religious Nonprofit Corporation
(use it each month and make the payments on time)
— buy a used car or other items in the name of the Religious Nonprofit Corporation and make monthly payments
How long will it take to establish credit using these methods?
Usually it takes about six months. But make sure your payments are always on time and do not pay the item or credit card off after a few months. You need to make ‘payments.’ Credit scores are always based on a history of moneys received, in a timely manner, month after month. You will be able to check the credit score for the Religious Nonprofit Corporation. Once it is at a level you feel is sufficient you can then pay off the item(s) and/or credit card(s).
Can a Religious Nonprofit Corporation be sued?
Yes. It is a corporation and is thus considered by the state to be a ‘person.’
Is it possible to sue a Religious Nonprofit Corporation and obtain its assets?
Yes. Though, it would be an extreme case. In order to win a judgment it must be proved that the ‘person’ (i.e. the Religious Nonprofit Corporation) being sued actually did the thing for which they are being sued. A Religious Nonprofit Corporation cannot do anything. It does not have a mind of its own. You are the mind of the Religious Nonprofit Corporation, since the Religious Nonprofit Corporation is the incorporation of an office of a church and you are the office holder. Therefore, in order to win a case, it is much easier to sue the office holder directly than it is to sue the Religious Nonprofit Corporation itself. In turn, if the Office Holder has no assets in their name it is doubtful a suit would even be filed against them since the Office Holder does not own anything. (We all know the phrase: “own nothing, control everything.”)
copyright 2009 FCUSA
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