What is a Legal Entity?


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Jerald Finney
Copyright © December 8, 2017


articlesofincorp.jpgA legal entity is a temporal earthly entity created and/or recognized by the law of man. The entity can be charged with a crime, sue and be sued, and act legally by entering into contracts, buying property, etc. Civil government has jurisdiction over legal entities.

Individuals are legal entities which are not created by the laws of man, but recognized by the laws of man. Legal speaks of earthly, temporal, as opposed to heavenly or eternal. A person in his/her right mind is a legal entity. If the person is lost, he is a legal entity only. If he is a born-again believer, he is both a legal entity and a spiritual entity. However, an earthly government cannot assume jurisdiction over his spiritual life. “And fear not them which kill the body, but are not able to kill the soul: but rather fear him which is able to destroy both soul and body in hell” (Matthew 10.28).

There are also legal entities which are created by the laws of man; these entities are made up of organizations of persons. Included are corporations (aggregate or sole, for-profit and non-profit), unincorporated associations, charitable trusts, business trusts, incorporated 501c3 or 508 tax exempt organizations and the list goes on. These type organizations are subject to the agreements made when they organized under man’s law.

Legal entities include associations; corporations; partnerships; proprietorships; and business, charitable, and other kinds of trusts (but not simple trusts, as explained below). Neither God nor the spirit of God have anything to do with their organization and operation. The law calls them “artificial persons.” They can be charged with crime, sue, be sued, assume legal, temporal, earthly obligations, and act legally by entering into contracts, buying property, opening bank accounts, hiring employees, running businesses (like schools, cafes, day care centers, etc.), and so forth. Satan can infiltrate and take over legal entities since they temporal, worldly, and run at least partially by maybe wholly by the laws of man. See Satan is the god of this world who orchestrates the world system.

All legal entities, other than individuals, are created by man-made civil government law. For example, American corporations, including church non-profit corporations, are created by state corporation law. Other legal entities such as sole proprietorships, are not created by man’s law, but are recognized and controlled by man’s law since they are businesses with income; they must, for example, get an assumed name, file income tax returns, get an Employer Identification Number, pay income taxes on profits and social security taxes on employees, register with the state sale tax office and pay sales taxes, etc.

A simple trust established to  manage money and property for the benefit of a beneficiary is not a legal entity. See  Trust Explained and The Bible Trust Relationship: Links to Essays and Other Resources. Other types of trusts which are either established according to man’s law or which have income are legal entities.

Many churches choose to be both legal and spiritual entities and many are legal entities only. Some churches, the remnant, protected by the law in America–the First Amendment and corresponding state constitutional provisions–choose to remain true to New Testament Church Doctrine and Example by remaining spiritual entities only. See Is a church a spiritual or legal entity? for more concerning this matter.

Churches, unlike businesses or charities, are protected by the First Amendment to the United States Constitution and corresponding state constitutional provisions which guarantee freedom of religion. Those laws give churches a choice. Churches choose whether to become a legal entity or remain a spiritual entity only. For more on this, see Is a church a spiritual entity, a legal entity, or a spiritual/legal entity?

What is a Spiritual Entity?


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What is a spiritual entity?


Jerald Finney
Copyright © December 8, 2017


“Beloved, believe not every spirit, but try the spirits whether they are of God: because many false prophets are gone out into the world” (1 John 4.1). The church of Satan and the church of Wicca are guided by spiritual forces, but not of God. In this lesson, “spiritual” refers only to spiritual entities of God, of which there are two.

The Bible teaches that a spiritual entity is eternal and heavenly (like heaven). A spiritual entity is either an individual who—unlike the lost person who is a temporal, earthly entity only—is born again and filled with the spirit of God or an assembly of such persons which the Bible calls a church.

As to the individual, we read in John 3 that to enter the kingdom of God, the spiritual realm, one must be born again, born of the spirit. A born-again believer is therefore a spiritual being. He will be an ideal earthly citizen. God predestines him to be conformed to the image of His Son (Romans 8.29). A born-again believer in Christ has been made alive spiritually, regenerated, a new creature in Christ Jesus.En1 The law was not made for such a man since he, being indwelt by the Holy Spirit, is directed by the Holy Spirit.Id. The New Testament gives many commands for the believer.En2

A spiritual man serves the Lord only, not the Lord and the world or the god of this world. “No servant can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon” (Luke 16.13).En3 By serving the Lord Jesus Christ, a believer will be an ideal citizen of the world.

Before His death, burial, and resurrection, God the son called out His apostles, walked with them, assembled with them, taught them, comforted them (Jn. 14.16), and answered their questions. After His resurrection and before His ascension, He told them to wait at Jerusalem where they would receive power after the Holy Ghost came upon them, after they were baptized with the Holy Ghost (Acts 1.5, 8). They complied, and on the day of Pentecost, were baptized with the Holy Ghost.

After the day of Pentecost there was a transition period when new believers were not immediately indwelt with the Holy Ghost when born again; but after a time, every new believer was and is indwelt by the Holy Ghost at the moment of salvation. Before, God the Son walked with believers. God the Holy Ghost now indwells believers in Christ and connects them to their new Head, the Lord Jesus Christ. They are spiritual beings.

The Lord “added to the church daily” all those saved in Jerusalem after the day of Pentecost (Acts 2.47). Such is the continuing order for all new believers and churches since that time. God desires all individuals who are saved to join with a local assembly of believers, a church ordered according to the principles of the New Testament.

New Testament churches under Christ were and are spiritual entities. Such churches can fall away and become apostate. See, The Biblical Doctrine of the Church. A  According to the example of New Testament churches and New Testament church doctrine, God desires that a church be a spiritual entity, not a spiritual and legal entity or a legal entity. A church is composed of spiritual beings, born again believers. Of course, a lost person may deceive a church, but he can never be a true member of that church even though he may be viewed as such by those deceived. See, Matthew 7: 15-20; Acts 20:28-31; 2 Corinthians 11:13-15; Galatians 2:4; 2 Timothy 3 (the apostasy predicted); 2 Timothy 5:1-5 (the faithful servant); 2 Peter 2:1-22; 1 John 4:1;  A church ordered after the principles in the New Testament and according to the examples of New Testament churches is a spiritual entity, a spiritual body, a spiritual organism, not an earthly organization.

  • 1 Peter 2:5 says, speaking to born again believers: “Ye also, as lively stones, are built up a spiritual house, an holy priesthood, to offer up spiritual sacrifices, acceptable to God by Jesus Christ.”
  • Ephesians 2.19-23: “Now therefore ye are no more strangers and foreigners, but fellowcitizens with the saints, and of the household of God; And are built upon the foundation of the apostles and prophets, Jesus Christ himself being the chief corner stone; In whom all the building fitly framed together groweth unto an holy temple in the Lord: In whom ye also are builded together for an habitation of God through the Spirit.”
  • Ephesians 4:16: “From whom the whole body fitly joined together and compacted by that which every joint supplieth, according to the effectual working in the measure of every part, maketh increase of the body unto the edifying of itself in love.” The purpose of the local spritual assembly or body is, “For the perfecting of the saints, for the work of the ministry, for the edifying of the body of Christ” (Ephesians 4:12).  The body spoken of here is the local church.  Read all of Ephesians 4 for complete explanations.
  • I Corinthians 12 also teaches on the this local spiritual assembly or body. 1 Corinthians 12:12 says, “For as the body is one, and hath many members, and all the members of that one body, being many, are one body: so also is Christ.” 1 Corinthians 12.27 says to the church at Corinth, the local visible assembly, “Now ye are the body of Christ, and members in particular.”

No where in the New Testament is any teaching or principle to be found that would lead one to believe that a church is to be an earthly, legal, temporal entity or a spiritual entity plus an earthly, legal, temporal entity. According to the New Testament, God’s order is for a church to be a spiritual entity only.En4


Ephesians looks at this issue in some depth. Go to Bible study of Ephesians for a very in depth study. For studies on other books go to Bible Studies on the Doctrine of the Church.


Endnotes


En1 “And you hath he quickened, who were dead in trespasses and sins; Wherein in time past ye walked according to the course of this world, according to the prince of the power of the air, the spirit that now worketh in the children of disobedience: Among whom also we all had our conversation in times past in the lusts of our flesh, fulfilling the desires of the flesh and of the mind; and were by nature the children of wrath, even as others.  But God, who is rich in mercy, for his great love wherewith he loved us, Even when we were dead in sins, hath quickened us together with Christ, (by grace ye are saved;)  And hath raised us up together, and made us sit together in heavenly places in Christ Jesus” (Ephesians 2.1-6).

“There is therefore now no condemnation to them which are in Christ Jesus, who walk not after the flesh, but after the Spirit. For the law of the Spirit of life in Christ Jesus hath made me free from the law of sin and death. For what the law could not do, in that it was weak through the flesh, God sending his own Son in the likeness of sinful flesh, and for sin, condemned sin in the flesh:  That the righteousness of the law might be fulfilled in us, who walk not after the flesh, but after the Spirit. For they that are after the flesh do mind the things of the flesh; but they that are after the Spirit the things of the Spirit. For to be carnally minded is death; but to be spiritually minded is life and peace.  Because the carnal mind is enmity against God: for it is not subject to the law of God, neither indeed can be.  So then they that are in the flesh cannot please God. But ye are not in the flesh, but in the Spirit, if so be that the Spirit of God dwell in you. Now if any man have not the Spirit of Christ, he is none of his. And if Christ be in you, the body is dead because of sin; but the Spirit is life because of righteousness. But if the Spirit of him that raised up Jesus from the dead dwell in you, he that raised up Christ from the dead shall also quicken your mortal bodies by his Spirit that dwelleth in you” (Romans 8.1-11).

“Not by works of righteousness which we have done, but according to his mercy he saved us, by the washing of regeneration, and renewing of the Holy Ghost” (Titus 3.5).

“Therefore if any man be in Christ, he is a new creature: old things are passed away; behold, all things are become new” (2 Corinthians 5.17).

See also, e.g., John 3, Romans 5.15-7.25; Galatians 5; 1 Corinthians 12-13.

“Knowing this, that the law is not made for a righteous man, but for the lawless and disobedient, for the ungodly and for sinners, for unholy and profane, for murderers of fathers and murderers of mothers, for manslayers, For whoremongers, for them that defile themselves with mankind, for menstealers, for liars, for perjured persons, and if there be any other thing that is contrary to sound doctrine; According to the glorious gospel of the blessed God, which was committed to my trust” (1 Timothy 1.9-11). The righteous man here is the born-again believer whose righteousness rests in Christ, not in self-righteousness.

En2 See, e.g., John 13.34; Ga. 5.1, 16, 25-26; Ep. 6.1-18; 1 Thes. 5.5-22; 2 Thes. 3.6-15; etc.

En3 See What God Has Committed to Man’s Trust: “Ye Cannot Serve God and Mammon”.

En3 See Is a church a spiritual or legal entity?

What is 508?


A Publication of Churches Under Christ Ministry


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Jerald Finney
Copyright © December 8, 2017


126 United States Code § 508, also referred to as Internal Revenue Code § 508, is a law which was enacted by Congress and signed by the President.

Some churches rely on this law rather than another law, § 501(c)(3) of the Internal Revenue Code, to establish tax exempt status.

§ 508. Special rules with respect to section 501(c)(3) organizations. “(a) New organizations must notify secretary that they are applying for recognition of section 501(c)(3) status. “(c) Exceptions. “(1) Mandatory exceptions. Subsections (a) and (b) shall not apply to— “(A) churches, their integrated auxiliaries, and conventions or associations of churches” (26 U.S.C. § 508). [Emphasis mine.]

508 churches are subject to the same rules which 501c3 churches are subject to.En1 and En2


The Bible Answer to the Question, “Is an Incorporated 501(c)(3) or 508 Church a Church of Christ?” (Prepared for a talk given at the September 16-19 Liberty Baptist Church of Albuquerque, NM, Southwest Baptist Heritage Camp Meeting. Click here to go to Part I of the video of that presentationClick here to go to Part II of that presentation, “Why a Church Is Not a Business.” Part II was removed from Part I. In Part II, Jerald Finney invited Evangelist and Pastor Terry Woodside to tell his story which demonstrates that a church which is a non-legal entity cannot be sued in America. Click here to go to the page which has links to all sermons and presentations at that meeting.)


Endnotes


En1 See Should a Church Be a 508 Church?

En2 See What is 501c3?

What is 501(c)(3)?

 


A Publication of Churches Under Christ Ministry


Click here to go to All Written Course Segments
Click here to go to General Questions Answered
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Click here for video of this lesson.


Jerald Finney
Copyright © December 8, 2017


IRC_501c3Internal Revenue Code § 501(c)(3) or 26 United States Code § 501(c)(3) is a law enacted by Congress and signed by President Dwight D. Eisenhower in 1954. It is in Volume 26 of the United States Codes. The government grants tax exempt status to 501c3 organizations and churches who choose to apply for and who are approved for 501c3 status.

As originally passed 501(c)(3) had four commandments or rules to which 501c3 organizations and churches agreed. Those rules are:

“1. must be organized and operated exclusively for religious, educational, scientific, or other charitable purposes,

“2. net earnings must not inure to the benefit of any private individual or shareholder,

“3. no substantial part of its activity may be attempting to influence legislation,

“4. the organization may not intervene in political activity.”

The above rules are listed in the 501(c)(3) law and explained by the IRS at:  Exemption Requirements-501(c)(3) Organizations.

5. In addition, the Internal Revenue Service added another rule in a case involving Bob Jones University. Bob Jones University appealed to the authority for disagreements over IRS rulings, the federal court and the case went all the way to the Supreme court. The Supreme Court upheld the rule. Bob Jones University, 461 U.S. 574 (1983). The applicability of the “fundamental public policy” added in Bob Jones University has never been applied to a church, but many pastors of incorporated 501c3 churches and “Christian” lawyers such as David Gibbs have long feared that it will be so applied. David Gibbs gave this advice on this issue many 15 or 20 years ago: “Pray about it.”

501c3 is 100% voluntary.En1 The First Amendment and corresponding state constitutional provisions guarantee that churches do not have to submit to any man-made law.En2 Most churches choose to apply for 501c3 status. Such status gives the federal government some control over 501c3 organizations, including 501c3 churches. Those applying for the status know the commandments that come with 501c3. They also understand that the sole authority for 501c3 disagreements with the IRS is the IRS agency with appeal to federal court by the losing party an option. They also know that neither God nor His Word will be allowed in any such controversy. In other words, a 501c3 church submits herself partially to an authority or head other than the Lord Jesus Christ. 501c3 is a government education control scheme which has worked, especially as to churches, but also other types of organizations.En3

To obtain 501c3 status, a church or other organization must fill out IRS Form 1023. Any pastor, as a Bible student, should know from looking at the form that he and his church violate Bible Church Doctrine by applying for tax exempt status.

One of several examples of how this affects a church and what a pastor preaches in church is examined in the article, 1,000 Pastors who pledge to defy IRS and preach politics from pulpit ahead of election misunderstand the law and the hierarchy of law. Pastors of 501(c)(3) churches have mounted this challenge several times. The IRS has ignored their actions. The pastors know, or they should have known, that 501(c)(3) is a law passed by Congress which respects an establishment of religion and prevents the free exercise thereof; so why did they voluntarily seek 501(C(3) status, especially considering the fact that the agreed authority which would decide disputes was the IRS subject to appeal to federal court? By agreeing to 501(c)(3) status, they voluntarily gave up their First Amendment status. Yet, they still planned to stand on the First Amendment should the IRS take action against them for violating the rule which prohibits church endorsement of a political candidate by preaching for or against a candidate. They planned to take their stand before their authority on the matter – the Internal Revenue Service subject to appeal to federal court. These pastors do not understand the issue. The issue is one of authority. Their chosen authority or head for the  matter is the federal government, not the Lord Jesus Christ.En 3 and En4 


The Bible Answer to the Question, “Is an Incorporated 501(c)(3) or 508 Church a Church of Christ?” (Prepared for a talk given at the September 16-19 Liberty Baptist Church of Albuquerque, NM, Southwest Baptist Heritage Camp Meeting. Click here to go to Part I of the video of that presentationClick here to go to Part II of that presentation, “Why a Church Is Not a Business.” Part II was removed from Part I. In Part II, Jerald Finney invited Evangelist and Pastor Terry Woodside to tell his story which demonstrates that a church which is a non-legal entity cannot be sued in America. Click here to go to the page which has links to all sermons and presentations at that meeting.)


 

Endnotes

En1 Is it illegal for a church in America not to incorporate? Does a church have to be a 501c3?

En2 Is it illegal for a church in America not to incorporate? Does a church have to be a 501c3?, What is a First Amendment Church?

En3 Federal government control of churches through 501(c)(3) tax exemptionThe church incorporation-501(c)(3) control scheme

En4  Does God Care if our Church is Incorporated? (The principles in this article also apply to the 501(c)(3) church), Articles, Essays, and Other Resources Related to the Doctrine of the Church, Incorporation, 501c3, Etc., What is an established church?, What is a First Amendment Church?,  A Call to Anguish: Churches Reject God’s Authority (November 21, 2017)(The real meaning of church 501(c)(3) application and status emphasized in analysis of new article: “A New Religion Forms That Will Worship A ‘Godhead’ Based on AI”)A “Christian” Refuge of Lies: An Expose of “The Church that Birthed America” (113017) ,God Betrayed/Separation of Church and State: The Biblical Principles and the American Application (covers all aspects of the relevant issues).