Religious institutions of all faiths are generally structured as nonprofit entities and are subject to specific business and accounting standards and responsibilities. Even smaller churches are considered nonprofits because they operate for religious purposes. Any type of religious organization can benefit from legal counsel. While it may seem odd for a church to be involved in a legal situation, it is common.
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 entity will often call upon a church law attorney only when there is a crisis or unexpected situation. An attorney that serves as a trusted advisor can help churches avoid damaging legal problems.
What are Common Reasons Why a Church Needs an Attorney?
The following are circumstances when a church should consult with an attorney:
Planning a New Church
Church law attorneys can help create a nonprofit structure and advise on other items related to the new church, including taxes, financing, building and zoning, and more. For both new and existing churches, an attorney can help create or amend governing documents to ensure compliance with nonprofit laws. An attorney will know all the requirements and documentation needed to become a nonprofit entity. They will also obtain tax-exempt status, establish a Federal Employment Identification Number (FEIN), incorporate with the state, and ensure fulfillment of all other legal requirements.
An attorney can also 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, churches 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 complex transactions.
Employment
Many churches have some paid employees and will almost always have many volunteers. Whether paid or not, a church should have very clear expectations and standards for anyone working on their behalf, including background checks and proper supervision. Employee and volunteer handbooks are essential. Other employment policies, such as compensation, benefits, hours, hiring, and firing should also be put in writing and reviewed by a church law attorney. Expectations and responsibilities for pastors, ministers, and other spiritual leaders should be reviewed and become part of the church’s governing documents.
Accounting
Nonprofit status requires specific Internal Revenue Service (IRS) reporting and accounting procedures. A church law attorney can advise on lawful financial operations as well. Sometimes, a religious organization will receive a question from the IRS, the media, another lawyer, or even a church member regarding a potentially sensitive or damaging issue. An attorney should always be on call to respond. Other ways an attorney can help with finances include:
Investments: At times, a church may decide to issue bonds, finance a project, or invest a large amount of funds. An attorney can ensure that the investment is beneficial and not overly risky.
Contracts: Churches 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.
Additional Revenue: Sometimes, 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.
Internal Investigations: 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.
Fundraising: Nonprofits are subject to specific laws regarding charitable solicitations and reporting funds, so consulting with a church law attorney is wise.
Intellectual Property: 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 intellectual property is.
Crisis Management
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 issues 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.
Ministries
Churches will often sponsor or engage in ministries that help others, whether in their local area, state, country, or even 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. Additionally, churches will often provide accommodation to their leadership, either onsite or offsite.
Conflicts of Interest
At times, a church may propose or conduct financial or other activities that benefit a member or their family or a church leader or employee. Any time there is even a potential for or inkling of conflict of interest, consult an attorney for guidance.
Litigation
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 circumstances, an attorney can counsel on 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.
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. An attorney familiar with representing religious organizations must be involved immediately when a lawsuit is filed or threatened.
Church Law Attorneys at Anchor Legal Group, PLLC Advocate for All Religious Organizations
Churches of all denominations 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. Our church law attorneys at Anchor Legal Group, PLLC represent religious organizations of all faiths. Call 757-LAW-0000 or contact us online to get started today. Located in Virginia Beach, Virginia, we serve clients throughout Virginia Beach, 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.