LEGAL STEPS TO START A MISSION Relationship between Mission and

Document Sample
LEGAL STEPS TO START A MISSION Relationship between Mission and Powered By Docstoc
					                    LEGAL STEPS TO START A MISSION

Relationship between Mission and Sponsor Church: Analysis = Entity Approach

A.    One Entity:

      The Mission is Owned and Controlled by the Sponsor Church.

      1.    Usual Characteristics:

            a)      Members of the Sponsor Church initially start the Mission

                           b)     The Sponsor Church's staff and leadership
                    work directly with the Mission to make decisions for the
                    Mission. The Mission usually has little initial leadership other
                    than the Mission pastor, and the leadership within the
                    Mission is built over time to ultimately replace the Sponsor
                    Church's control over the Mission (i.e., the Mission
                    constitutes or establishes itself as a Church).

                          c)    The Mission is legally a part of the Sponsor
                    Church. The Mission's members are also members of the
                    Sponsor Church.

                          d)      The Sponsor Church has legal authority over
                    assets of the Mission and legal liability for obligations of the
                    Mission (both contractual and tortious). Liability insurance of
                    the Sponsor Church usually covers the Mission.

                          e)      The Sponsor Church has substantial financial
                    commitment for the Mission's budget. Shortfalls in the
                    Mission's are the responsibility of the Sponsor Church.

            2.      Incorporation of the Mission: No. Because the Mission is
            legally a part of the Sponsor Church, it is not incorporated.
            Incorporation would cause the Mission to be a separate entity from
            the Sponsor Church.

            3.     Bylaws: Optional. Although the Mission is legally a part of
            the Sponsor Church, the Mission may prepare Bylaws to govern the
            internal operation of the Mission. However, these Bylaws will not
            override any decision or control which the Sponsor Church has the
            authority to make over the Mission.

            4.    Membership of Mission members in the Sponsor church:
            Yes. The members of the Mission are also members of the
           Sponsor Church, because the Mission is legally part of the Sponsor
           Church.

           5.     Property of the Mission owned by the Sponsor Church: Yes.
           Because the Mission is owned by the Sponsor Church, all property
           of the Mission is also owned by the Sponsor Church.

           6.     Liability insurance of the Sponsor Church covers the
           Mission: Yes. Because the Mission is legally a part of the Sponsor
           Church, liability insurance of the Sponsor Church will normally
           cover the activities of the Mission if property insurance coverage is
           in place. (i.e., the Sponsor Church has liability insurance that also
           covers the location where the Mission activity occurs).

           7.    Ad valorem exemption allowed for property used by the
           Mission: Yes. The property used by the Mission is owned by the
           Sponsor Church and will qualify for ad valorem tax exemption.

           8.     The Mission is required to have its own federal employment
           tax identification number: No. Because the Mission is a part of the
           Sponsor Church, the paid employees of the Mission are treated as
           employees of the Sponsor Church and the reporting with respect to
           those employees is done under the employment tax identification
           number of the Sponsor Church.

           9.       The staff of the Mission are employed by Sponsor Church:
           Yes. The Mission is a part of the Sponsor Church so the staff are
           treated as employees of the Sponsor Church, for all purposes.
           (i.e., tax purposes, worker's compensation insurance purposes,
           etc.).

B.   Two Entities:

     The Mission is Affiliated with the Sponsor Church.

     1.    Usual Characteristics:

                           a)     The Mission's staff, leadership and/or
                     congregation make decisions for the Mission, and work in
                     cooperation with the Sponsor Church.

                            b)    The Mission is legally separate from the
                     Sponsor Church. The Mission's members are not members
                     of the Sponsor Church.
               c)     The Sponsor Church has only the legal rights
      over or with respect to the Mission as set out in the affiliation
      agreement between the Sponsor Church and the Mission,
      which can vary from one case to another. The Sponsor
      Church does not own or control the Mission. (i.e., the
      Mission may own its own property and the Sponsor Church
      may provide some assets or some limited level of financial
      support to the Mission).
               d)     The Sponsor Church has only the legal liability
      for the obligations of the Mission which are set out in the
      affiliation agreement between the Sponsor Church and the
      Mission, or which the Sponsor Church otherwise voluntarily
      assumes by the actions of its representatives or by its
      contractual guarantee of indebtedness of the Mission.

            e)     The Sponsor Church has a limited financial
      commitment for the Mission's budget, for only so much as
      the Sponsor Church has agreed to pay. Any shortfalls in the
      Mission's budget are not the responsibility of the Sponsor
      Church, unless the affiliation agreement states otherwise.

2.     Incorporation of the Mission: Optional. The Mission can
either be an unincorporated nonprofit association or an
incorporated nonprofit corporation under the law. However, we
recommend incorporation.

3.      Bylaws: Yes. Because the Mission is a separate legal
entity, it will need its own rules of operation.

4.     Membership of the Mission's members in the Sponsor
Church: No. The Mission is a separate legal entity, so the
members of the Mission are not members of the Sponsor Church,
unless the affiliation agreement provides for dual membership by
the Mission's members.

5.     Property of the Mission owned by the Sponsor Church:
Optional. The Mission can own its own property, but because of
the lack of finances, most often it does not have the funds to
purchase or acquire property of its own, and the Sponsor Church
provides property for the Mission's use.

6.     Liability insurance of the Sponsor Church covers the
Mission: Probably No. You should consult with your insurance
agent to determine if the Mission can be added as an additional
insured under the Sponsor Church's liability insurance, but in most
cases there will probably be a separate premium charged for the
        Mission's liability insurance because it is a separate legal entity
        involved in its own activities.

        7.     Ad valorem tax exemption allowed for property used by
        Mission: Yes. The exemption statute for religious organizations
        allows a Mission which uses property for religious purposes to have
        the property qualify for exempt status with respect to ad valorem
        taxation, whether the Sponsor Church or the Mission owns the
        property.

        8.      The Mission is required to have its own federal employment
        tax identification number: Yes. Because the Mission is a separate
        entity, it will need its own federal employment tax identification
        number.
        9.      The staff of the Mission are employed by the Sponsor
        Church: No. Because the Mission is separate from the Sponsor
        Church, the paid staff of the Mission will be employed by the
        Mission and will not be employees of the Sponsor Church, unless
        the Sponsor Church "loans" some of its employees to work in the
        Mission on a temporary basis.


96816

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:8
posted:5/3/2010
language:English
pages:4