7 Steps to Establishing Your New Church as a Legal Organization
Guest post by Scott Cheatham, Church Planter with The Way Church in Denham Springs. Scott is one of the facilitators for the Admin Session of our Basic Training for Church Multiplication Workshop in Louisiana.
As church planters, we get excited about the task, but often neglect administrative details. To start with integrity & assure long term success, we must take care of legal issues that can serve as future threats to the health of our organization if neglected. Here are seven steps that new churches need to take to become legal & maintain organizational integrity:
STEP 1- Secure Your Name
Once you have chosen a name for your church, you have to determine whether it is available for use. To do that, go to: www.sos.la.gov/Pages/default.aspx. Go to the “Start a business” tab and search for business filings. Look for the business name in the directory. If it is not already taken, then you can use it. If it is being used, then you will either have to add something to distinguish it, like your city or community. (i.e. Calvary Baptist of Denham Springs) or change the name. Once you have found a name that can be used, you can move on to the next step.
STEP 2- Writing Your Articles of Incorporation
The next step in the process is writing your Articles of Incorporation. I recommend using a lawyer. These documents can be complicated and difficult. Information you will need to have to write your articles: Who are the officers of the church? What is the mailing address? How will your church make decisions and function legally? It would be a good idea if you have some by-laws to present to the lawyer so he can get a clear understanding of the polity of your church. Once the Articles of Incorporation have been written, they need to be filed.
STEP 3- Filing Your Articles of Incorporation
The Articles of Incorporation have to be filed with the Secretary of State. You can either go to the office to file personally or you can file online. Your lawyer should be able to help direct and/or file for you. To file, there is a $75 fee. The Secretary of State also requires you to file an annual report. This can be done online as well. This process only takes a few minutes and insures that the church stays in good standing with the state. Once you have filed, you can then go to step four.
STEP 4- Tax ID Number
Churches need an EIN (employer identification number) or what is referred to as a tax identification number. This number is used to file your quarterly tax reports. This number can easily be obtained by going to the IRS website and filling out the appropriate form. Go to this link and follow the appropriate steps: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/. Once completed, you will have your EIN. Print a copy and keep in your records. You will need this for conducting business.
STEP 5- State Tax Number
Louisiana churches also need to have a state tax number. This state tax number will allow you to file your quarterly state tax forms. This can be obtained online as well. Go to: http://revenue.louisiana.gov/Businesses/BusinessRegistration. Follow the instructions to apply for a Louisiana taxpayer identification number. Once you have been emailed this number, print it and keep for your records.
STEP 6- Open a Bank Account
Now it is time to open a bank account. You will need to bring all of the above-mentioned documents to the bank and open an account. There are a few things that you need to know when you arrive at the bank. Who will sign checks? Do you want a bankcard? What is the mailing address for the church? Knowing these things in advance will expedite the process of opening an account.
STEP 7- Bookkeeping
Step seven is very important. This step involves setting up a good record keeping system. There are several good systems that are available. There are systems designed just for churches. You can go online and find one to match your needs. Quick Books is another option as well. This may require a little experience with bookkeeping, but is user friendly. Another option is to hire a local CPA or Bookkeeper to keep your books. This would insure that you are filing timely and proper tax forms. These firms will also pay bills and do payroll. The expense is usually minimal.
These steps will insure that God’s church is started and operated legally and with integrity.
Other articles about getting started on the church planting journey: