Jerald Finney
Copyright © September, 2009
Jerald Finney: Audio teaching on legal versus spiritual entities and incorporation of churches
Jerald Finney continues his audio teaching on incorporation of churches
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“Woe unto them that call evil good, and good evil; that put darkness for light, and light for darkness; that put bitter for sweet, and sweet for bitter” (Is. 5.20)! I would guess that most Christians would apply this verse, as I have in the past, to the unregenerate, and possibly to carnal Christians. But having been intimately involved in two fundamental Bible believing churches since being saved, I have by experience learned that many pastors, missionaries, and other Christians have been deceived as to the doctrines of church, government, and separation of church and state to the extent that they call certain evil good and certain good evil, put darkness for light, and light for darkness, bitter for sweet, and sweet for bitter. Please let me explain.
My pastors have always stood for the biblical doctrines of church, state, and separation of church and state. Nonetheless, they associate with pastors and other Christians who are members of state churches. By state churches, I mean churches who are legal entities. Legal entity means:
“Legal existence. An entity, other than a natural person, who has sufficient existence in legal contemplation that it can function legally, be sued or sue and make decisions through agents as in the case of corporations” (BLACK’S LAW DICTIONARY 893-894 (6th ed. 1990), definition of “legal entity).”
Many avenues are open for a church to become a legal entity. A few of many examples are incorporation, corporation sole, unincorporated association, 501(c)(3) tax exemption, and taking insurance in the name of the church.
A New Testament church (which, in America, is also a United States Constitution First Amendment church) cannot also be a legal entity. A New Testament or First Amendment church is a spiritual entity only, and cannot sue or be sued. A New Testament church is a spiritual body of whom Christ is the head and the members on earth the body (Jn. 3.28-29; Ro. 7.4; 1 Co. 12.12-27; Ep. 1.22-23; 4.15-16; Col. 2.19). The Bible calls Jesus Christ the bridegroom and husband of the church who is the bride and wife (see, e.g., Ep. 5.22-33; 2 Co. 11.1-4; Re. 19.6-8).
When a believer who is walking in the Spirit according to knowledge, wisdom, and understanding applies earthly fact to biblical principle, he cannot help but see that a church who becomes a legal entity puts herself at least partially under another head, submits herself at least partially to another lover, entangles herself in earthly as opposed to biblical or spiritual procedures and requirements, and is at least partially financed, educated, directed, and/or controlled by an earthly entity (two such entities if a church is both incorporated and also under Section 501(c)(3) of the Internal Revenue Code). In other words, such a church has violated the biblical principle of separation as well as many other biblical principles. (See God Betrayed/Separation of Church and State: The Biblical Principles and the American Application and/or Separation of Church and State/God’s Churches: Spiritual or Legal Entities? and other books by Jerald Finney for a thorough analysis of these matters. Click the following link to preview God Betrayed: Link to preview of God Betrayed. The book can be ordered from the “Books” page of the “Church and State Law“ website.” These books and many other resources are available on the “Books” page of the “Church and State Law” website.)
Here are some earthly facts about incorporation which can be applied to biblical principles:
(1) The sovereign of a non-profit or private corporation such as an incorporated church is the state (see, e.g. 18A AM. JUR. 2D Corporations §§ 74, 156 (2007)).
(2) “A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law. As a mere creature of law, it possesses only those properties which the charter of its creation confers upon it, either expressly or as incidental to its very existence; these are such as are supposed best calculated to effect the object for which they were created. It is essentially the legal identity of a set of contractual obligations and entitlements” (18 AM. JUR. 2D Corporations § 1 (2007)).
(3) “A corporate charter frequently is described as a contract of a threefold nature; that is, a contract between the state and the corporation, a contract between the corporation and its stockholders [or members if a private religious corporation], and a contract between the stockholders [or members] inter se. The charter also is spoken of as a contract between the state and the corporators” (18 AM. JUR. 2D Corporations § 81 (2007)). Other contracts are created by the bylaws of the corporation: contracts between the members or stockholders of a corporation, and contracts between the corporation and its members or its stockholders. Contract is not biblical because contract leaves God out of the equation. The controlling party to the contracts involved in church incorporation is the state, and the state will not allow biblical principles to be invoked in resolving any disputes arising under those contracts. The multiple contracts created by the articles of incorporation and the bylaws entangle the incorporated church with earthly satanic concerns.
(4) An incorporated 501(c)(3) church gets part of her powers from God and part from two civil governments-the state of incorporation and the federal government. She is under three heads. The church, as a legal entity, can sue and be sued as to both earthly and spiritual matters. The church must have elected officers who conduct business meetings, meet statutory requirements, etc. as required by the law of the sovereign, the state of incorporation. The church, be getting 501(c)(3) status, agrees that she will abide by the rules that go along with 501(c)(3); the church has become part of the 501(c)(3) government education and control scheme for churches.
(5) The incorporated church, as has been stated, is an artificial person and a separate legal entity. This has many ramifications.
(6) The purpose of the corporation is at odds with the God-given purpose of a church. Ultimately, the purpose of a church is to glorify God by submitting herself to her Husband in all things (See Ep. 5.24). The basic purpose of incorporation is to allegedly increase the happiness of man by creating a “distinct legal entity, with legal rights, obligations, powers, and privileges different from those of the natural individuals who created it, own it, or whom it employs” (18 AM. JUR. 2D Corporations § 44 (2007)).
(7) A corporation and a church have different creators. Church members, under authority of and in conjunction with the state, create the corporation. God supernaturally creates a church: “And the Lord added to the church daily such as should be saved” (Ac. 2.47b).
(8) The organization of a church and a corporation are different. The incorporated “church” has “employees.” Even should the incorporated “church” call their “employees” ministers, the state looks at them as “employees,” and the state is the sovereign of the corporation. A New Testament church cannot have employees and remain a New Testament church.
(9) Whereas a church is to have pastors, teachers, and so forth, state laws which create corporations require the corporation to have officers such as president, treasurer, secretary, and so forth.
(10) Ownership of a church and a corporation differ. “Members in a nonprofit corporation are the ‘owners’ of the corporation and generally play a role similar to shareholders in for-profit corporations” (18A AM. JUR. 2D Corporations § 609 (2007)). The corporation owns the assets of the church. Jesus Christ owns a New Testament church, and a New Testament church owns nothing. In America, a New Testament church can still enjoy the use of both real and personal property without owning it. Old Paths Baptist Church church and state law ministry helps churches structure themselves as New Testament churches.
(11) An incorporated church must deal with all the government red tape that comes with incorporation. The incorporated church must now elect officers, hold business meetings, notify members of those meetings pursuant to statutory requirements, keep records, etc. All these secular activities take tremendous time, energy, and resources which could be used in pursuing the God-given purposes of a church. The incorporated church who does not comply with statutory requirements is being dishonest and could face further problems from her sovereign state.
(12) An incorporated church, having compromised her love for her Husband, will continue to make incremental compromises, and ultimately (perhaps in 1, 5, 10, 50, 100, or 200 years or more) will fall into heresy and apostasy. And from the beginning of that initial compromise, the Lord, even though longsuffering in His love and mercy, is grieving because of His wife’s compromise.
(13) A corporation cannot be the bride of Christ, the wife of Christ. The incorporated part of an incorporated church is not the bride of Christ, the wife of Christ, but rather an extramarital illicit relationship existing alongside the marriage.
An analysis of corporation sole and unincorporated association reveals the flaws in those types of legal entities when applied to churches. Internal Revenue Code 501(c)(3) tax exempt status puts a church further under the control of the state and is thoroughly analyzed in two of the above mentioned books written by Jerald Finney. Any time a church sets herself up to be a legal entity, she violates biblical principle, grieves our Lord, and puts herseslf on the road to heresy and apostasy. As long as a church has a good pastor, God will still bless that church to an extent. However, both the Old and New Testaments warn about the ultimate consequences of taking that first step away from our spiritual lover. Sooner or later, a state church will have a pastor who will no longer honor God, and she will degenerate deeper and deeper into heresy, and ultimately into apostasy.
My pastor is a great man of God who preaches the whole word of God. In the past, before I became a member of Old Paths Baptist church, I attended church conferences which were well attended by pastors and missionaries. At those conferences, certain of those pastors and missionaries have struck out against the fact that the church which I attended was not a state incorporated 501(c)(3) church. In addition, I have, over the years, witnessed many other Christians who believe that a church in America should become state incorporated 501(c)(3) church, and have seen them become very angry at a pastors who refuse to operate as a state church. These Christians are, in effect, calling evil good and good evil. They are, as to this aspect of their Christian walk, proceeding without knowledge and wisdom; they are walking in darkness rather than light. They know not of which the speak (and act). They are on the road to heresy and apostasy.
One more relevant matter (mentioned above) needs to be addressed. A church in the United States can choose to be either a New Testament church who operates according to biblical principles or a state church. The First Amendment to the United States Constitution as well as provisions in most or all state constitutions provide that churches can operate totally free from governmental control. Churches in America, by law, can operate according to the principles of the Word of God. Those who choose the latter will not be defined, controlled, and restricted by the world as is the state church, but they will suffer a degree of persecution by some other Christians.
Many Christians have not heeded the warning of Col. 2: 6-8:
“As ye have therefore received Christ Jesus the Lord, so walk ye in him: Rooted and built up in him, and stablished in the faith, as ye have been taught, abounding therein with thanksgiving. Beware lest any man spoil you through philosophy and vain deceit, after the tradition of men, after the rudiments of the world, and not after Christ.” They have not, to one degree or another, escaped the corruption that is in the world through lust because they have not added to their faith knowledge without which they are “blind, and cannot see afar off.” When God’s people reject knowledge, they will be destroyed (see 1 Peter 1.4-10; Hosea 4.6).
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Simply Church: God's Prescribed Relationship Between Church and State 