For analyses of other false arguments for church legal entity status, see, FALSE REASONS OF “CHRISTIAN” LAWYERS AND PASTORS FOR CORPORATE, 501(C)(3) STATUS OR LEGAL STATUS OF ANY KIND

Many pastors as well as Bible Colleges and their leaders give advice on church incorporation without Bible, legal, or historical knowledge, wisdom, and understanding. Click here to go to an article giving such advice by “Dr.” Charles Brown, Executive Vice President of Landmark Baptist College; plus a rebuttal article by Jerald Finney published in “The Trumpet.” The title of the article is “To Incorporate or Not to Incorporate.?” The issue is also covered in Chapter 9, page 97 of the 3rd edition of Separation of Church and State/God’s Churches: Spiritual or Legal Entities?  (Click to go to a PDF of that book or read the reproduction of that chapter below).

Note. I would now change some terminology used in the rebuttal argument mentioned above. For example, I referred to “pure New Testament church” in the article. After many more years of study, I would now use instead, “church under the authority of Jesus Christ and Him only” or something similar to that. Nonetheless, such minor misnomers do not change the truth of the conclusions.

Matthew 16:18: “And I say also unto thee, That thou art Peter, and upon this rock I will build my church; and the gates of hell shall not prevail against it.” This is the first verse in the Bible with the word “church.” There are many “churches” (local visible assemblies) in America today who profess to follow Jesus Christ. Is it not important that such a church, for one thing, be built under the sole authority of the Lord Jesus Christ and the principles for Christ’s churches (assemblies) laid out in the New Testament?

Chapter 9
Spurious Rationale for Incorporating: One’s Convictions

Dr. Charles Brown wrote an article entitled “To Incorporate or Not to Incorporate” which was published in the April, 2008 edition of The Landmark Anchor. In that article, he brought out important issues which, from a biblical perspective, are preeminent for a New Testament church. This article briefly answers some of the common assertions of various Christians which are reflected in Dr. Brown’s article.

God Betrayed/Separation of Church and State: The Biblical Principles and the American Application thoroughly addressed all the issues Dr. Brown raises and more. That book explains in some depth what a believer needs to consider and know about the issue of incorporation, 501(c)(3), and church legal entity status of any kind. This book explains all a knowledgeable Bible believer needs to know in order to understand the issues.

In the above mentioned article, Dr. Brown does not get into church United States Code §§ 501(c)(3) (“501(c)(3)”) and 508 tax-exempt status. Since almost all churches which incorporate also get 501(c)(3) status, such status should be considered in conjunction with the issue of incorporation of churches; but since Dr. Brown did not include the issue in his article, I will not address the issue herein. See Chapters 4 and 5 above for an explanation of 501(c)(3) and 508 tax-exemption of churches.

This chapter will attempt to shed some light on the issues Dr. Browne raised as succinctly as possible.

Dr. Brown stated: “A church does not have to be incorporated to be a real church.” My reply to that statement follows:

• What is a real church? The New Testament gives the answer to that question. The revelation of the mystery of the church, which was foretold, but not explained by Christ in Matthew 16.18, was committed to Paul. In his writings alone we find the doctrine, position, walk, and destiny of the church.A real New Testament church is one which follows the doctrines written by Paul as inspired by God. Such a church cannot also be a legal entity of any kind. It cannot, for example, be incorporated or have Internal Revenue Code § 501(c)(3) or § 508 status.
• New Testament churches never submitted themselves to the state in any way. In fact, the apostles were careful not to render to Caesar the things that were God’s. They were jealous of God’s churches. Paul said to the church, “For I am jealous over you with godly jealousy: for I have espoused you to one husband, that I may presentyou as a chaste virgin to Christ. But I fear, lest by any means, as the serpent beguiled Eve through his subtilty, so your minds should be corrupted from the simplicity that is in Christ.”[1] No church combined with civil government in any way until the early fourth century when Constantine made a proposal and some of the churches accepted it. The result was union of church and state.
• Is a corrupted church a real church? What if the leaders of a church reject knowledge and succumb to Satan’s seductions? In other words, what if those leaders are willfully ignorant?[2] Individuals have a responsibility after being saved—they are to add to their faith virtue, to virtue knowledge, to knowledge temperance, to temperance patience, and to patience godliness, to godliness brotherly kindness, and to brotherly kindness charity.[3] They are to engage in spiritual warfare using spiritual weapons which constitute the whole “armour of God.”[4] Included in that “armour” is having one’s loins girt about with truth.[5]
• A New Testament church is a spiritual entity only. Doing anything in America which subjects a church to the civil government in any way renders that church a “legal entity.” A “legal entity” is “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.[6]
• God desires that Christ be the only head over His churches.[7]
• The church is described as betrothed to Christ.[8] Christ is the bridegroom and the church the future bride.

Dr. Brown stated: “The United States [C]onstitution guarantees its citizens freedom of religion and freedom of speech. Churches fit in those categories.” My response:

• The First Amendment to the United States Constitution guarantees freedom of religion, speech, press, assembly, and the right to “petition the Government for a redress of grievances.” In the religion clause, churches are guaranteed freedom from government control and the soul liberty or freedom of conscience of each church member and every member of society is protected from persecution. The words and history of the Amendment make this clear.
• The words of the religion clause state, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” Thus, the First Amendment allows a church to remain under God only without persecution, or to repent if the church incorporated, or solicited and obtained 501(c)(3) or 508 status, or made themselves a legal entity in any way. Churches in America can enjoy New Testament church status without persecution because of the First Amendment. The freedom guaranteed a church by the First Amendment can be enjoyed within the parameters of the laws of the states and of the United States. The United States Supreme Court still recognizes that the state cannot interfere with a New Testament Church. Of course, there may be rogue governmental agencies and courts that may ignore these protections; but if a New Testament church makes sure to close all doors to being classified as a legal entity, there is no avenue for suit or attack against that church.

Dr. Brown stated: “Anything the state might choose to do (prosecute, regulate, etc.) to a church, they may do regardless if the church is incorporated or not.”

• This statement not only contradicts what Dr. Brown said in his previous two sentences, it also is simply not true. A New Testament church cannot be prosecuted. It is not a legal entity. An individual within a New Testament church may be prosecuted for crimes or sued for torts allegedly committed, whether as principal or party. However, a New Testament church is not a legal entity as is an incorporated 501(c)(3) or 508 church; and, therefore, she cannot sue, be sued, or be charged with a crime. Only a member or members who allegedly committed a crime or tort can be charged with a crime or sued under the laws of a civil government. Furthermore, the courts of the state of incorporation have control over the contracts created by incorporation; and 501(c)(3) or 508 status allows the federal government to control certain speech and actions of a church. This is not so for the New Testament church.
• The First Amendment guarantees that a New Testament church cannot be prosecuted, regulated, etc.

Dr. Brown’s statements concerning incorporation which follow his last mentioned statement are jumbled and very misleading. He is correct to say that incorporation “is a legal status that enables a group joined together for a stated reason (business, church, club, etc.) to act as if it was a person. That ‘legal person’ may own property, conduct business, and otherwise carry out its purpose.” His statements admit that the incorporated church has altered her status and is no longer a New Testament church. As stated above, a corporation is a legal entity. However, Dr. Brown’s description is incomplete. Civil law makes clear that:

• “A corporation is an artificial being, invisible, intangible and existing only in the contemplation of law. As a mere creature of law, it possesses only those properties which the charter of its creation confers upon it. A corporation is not a natural person but rather an artificial person, that is, a legal fiction or a creature of statute.”[9]
• The sovereign of the corporation is the state that creates it. “No corporation can exist without the consent or grant of the sovereign, since the corporation is a creature of the state and derives its powers by legislative grant…. Because the granting of the privilege to be a corporation and to do business in that form rests entirely in the state’s discretion, a state is justified in imposing such conditions on that privilege as it deems necessary, so long as those conditions are not imposed in a discriminatory manner.”[10]
• A corporation is defined as “An artificial person or legal entity created by or under the authority of the laws of the state.”[11]
• Early in our national history, the United States Supreme Court solidified already existing precedent—in a case involving a religious institution of higher learning and which influenced many churches to incorporate—concerning the attributes of incorporation which are applied to churches (Dartmouth College). In that same case, the Supreme Court defined the differences between public and private corporations. Public corporations are not voluntary associations and there is no contractual relation between the government and the individuals who compose the corporation as there is with the private corporation (such as railroad companies, banks, insurance companies, charities, churches, religious organizations, etc.); a corporation which does not possess governmental powers or functions is a private corporation.[12]

Dr. Brown states that “[a]n unincorporated church is owned by individuals.” If an unincorporated church is not a legal entity (incorporating and getting 501(c)(3) or 508 status are not the only ways to become legal entities), it is a New Testament church and the church is owned by the Lord Jesus Christ who said, “And I say also unto thee, That thou art Peter, and upon this rock I will build my church; and the gates of hell shall not prevail against it.”[13] A New Testament church remains a spiritual entity only owned by Jesus Christ.

Dr. Brown asserts that churches usually incorporate to limit liability.

However, in addition to limited liability, other reasons for incorporating are given by members of “churches:” incorporating protects their personal assets (1) from liability for the debts of the corporation, (2) from the torts and criminal acts of the corporation, and (3) from liability on contracts entered into by the corporation. Although such arguments are partially correct, they are misleading. These arguments are spurious for several reasons which are more thoroughly discussed Chapters 6-8 which are summarized in the next paragraph.

The corporate veil can be pierced. Limited liability is not absolute. Also, biblical principle is against a church going into debt; and if she does go into debt, not only does the word of God teach that God expects her to honor her debts; but also that church has become a legal entity because she can be sued if she defaults on her debts and she can sue if the other party to the debt defaults on her agreements surrounding the indebtedness. As to torts and criminal acts, only visible members of a New Testament church can commit such acts. A New Testament church cannot commit a tort or a crime. Thus, only people (members), not a New Testament church (a spiritual entity only and not a legal entity), can be charged with a tort or crime to which they have allegedly either been principal or party. As to contracts, a New Testament church (a spiritual entity) has no need to and cannot enter into contracts. One can get around these principles only by means of human reasoning which are contrary to God’s principles.

Dr. Brown asks the question, “Is becoming an incorporated church the same as being a state licensed church?”

This question is a diversionary tactic. Of course the two are not the same; but, according to biblical principles, to license a church is a wicked act, and to incorporate a church is a wicked act.

Dr. Brown then asks, “What about theological objections to incorporation?” He recommends not incorporating if one has theological objections.

• The word of God does not leave such an important issue up for grabs, and God expects His children to seek out and apply the principles He has laid down. Most lawyers, including many or most of those who call themselves Christian, apply humanistic legal concepts, not New Testament church doctrine in organizing churches. Church authority is not Supreme Court cases or civil laws. Church authority is the Bible. As long as man’s law corresponds with Bible principles a church can follow man’s law. In America, the First Amendment to the United States Constitution and corresponding state constitutional provisions reflect Bible principles. A church can remain a New Testament church by remaining a First Amendment church. When a church becomes a legal entity of any kind, that church violates the Bible principle of separation of church and state and places herself under the Fourteenth Amendment for many purposes.
• The real question should be, “What does the Bible teach about incorporation?”Other chapters of this book explain the biblical principles concerning incorporation (and 501(c)(3) or 508 tax-exempt status) for churches. God teaches that a church which incorporates has committed a wicked act. That church may continue to operate within God’s permissive will, but as with the nation Israel, the only true theocracy which has ever existed,  when she rejected God as ruler (and God permitted Israel to reject Him), once a church dishonors her relationship with the Lord Jesus Christ, that church is on a slippery downhill slope. The inevitable end result is spiritual apostasy, moral awfulness, and political tyranny. As the Bible teaches, the only remedy for apostasy is judgment.

Dr. Brown states that the Christian Law Association (“CLA”) has some excellent printed material that explains these issues simply and thoroughly. Simply yes, thoroughly, no, incorrectly, yes. Although simplistic, CLA explanations on the issue of incorporation (and 501(c)(3) or 508 status) of churches are wrong according to biblical principles. CLA founds what it believes on man’s statutory and case law, interprets the Bible according to man’s statutory and case law, revises history, and disseminates myths about the issue of separation of church and state (which involves the issues of incorporation and 501(c)(3) or 508 tax-exempt status for churches). In fact, David Gibbs of the CLA once taught biblical principles concerning these issues but was persuaded by powerful pastors who had decided that they were going to seek incorporation and 501(c)(3) status that he should go with them on the issue. According to some sources, these pastors told him that if he did so they would establish his legal practice. It is irrefutable that after Attorney Gibbs switched his position, his earthly power and influence were multiplied many times over and the CLA began to thrive materially as an earthly entity with the financial support of thousands of churches and believers. Perhaps he felt that he should go with them to help and protect them, just as Jeremiah went with some of the Jews to Egypt against God’s warning. However, Jeremiah, unlike Gibbs still spoke total truth as given him by God.

Dr. Brown then states that “Incorporated churches are not ‘state run churches.’”

• In fact, incorporated churches are two-headed monsters. “Thus, whenever there is an incorporated church, there are two entities—the one, the church as such, not owing its ecclesiastical or spiritual existence to the civil law, and the other, the legal corporation—each separate, although closely allied. The former is voluntary and is not a corporation or a quasi corporation. On the other hand, a corporation which is formed for the acquisition and taking care of the property of the church, must be regarded as a legal personality, and is in no sense ecclesiastical in its functions.”[14]
• An incorporated church gets part of her powers from God and part from the civil government. She is under two heads. Part of the church, as a legal entity, can sue and be sued as to both earthly and some spiritual matters. Part of the church must have elected officers who conduct business meetings, meet statutory requirements, etc.
• This bifurcation of a church has other consequences. As has been shown, the state is sovereign of the incorporated part of a church. “Sovereign” means: possessed of supreme power or unlimited in extent: ABSOLUTE.[15] Incorporation of churches creates contracts between the state and the corporation, the state and the members of the corporation, between the members themselves, and between the members and the corporation. Contract (agreement between two or more parties) is not biblical. The Bible teaches that the proper way to agree with another or others is through biblical covenant (covenant between two or more people and God).  The contracts created by incorporation entangle the incorporated church with earthly satanic concerns, solutions, and procedures. Furthermore, the statutory requirements as to the form and content of the articles or certificates of incorporation must be substantially followed. As sovereign, the state has ultimate authority in interpreting the articles of incorporation as well as the various contracts involved in incorporation should disputes be taken to court. By incorporating, a church gives up much of its First Amendment protection. It must, for example, keep records and make those records available to the state, on demand. Only a church which is not satisfied with the freedom and provisions afforded the church by God (which are, by the way, implemented by the First Amendment) seeks incorporation.
• 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 which does not comply with statutory requirements is being dishonest and could face further problems from her sovereign state.

Notice that Jesus said that “the gates of hell shall not prevail against [my church].” What about the church that is partly under God and partly under Satan? That church has fallen for Satan’s seduction:

“SEDUCTION, n. … 2. Appropriately, the act or crime of persuading a female, by flattery or deception, to surrender her chastity. A woman who is above flattery, is least liable to seduction; but the best safeguard is principle, the love and purity of holiness, the fear of God and reverence for his commandments.”[16]

A corporation cannot be the future bride and wife of Christ. The incorporated part of an incorporated church is an illicit relationship condemned by Bible precepts. An incorporated church, having compromised her love for her betrothed, 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 betrothed’s compromise; and the compromising church gives up at least a portion of the power of God.

With the above information it should already be completely obvious to any born again believer who loves the Lord and who has been saved any length of time at all that a church should never incorporate. Scripture contains no principle consistent with church incorporation or incorporation in general. In fact, everything about incorporation is anti-biblical. If one who loves the Lord and comes into this understanding is in a church that is already incorporated, he will do all he can to shed the 501(c)(3) or 508 corporate (aggregate of sole) status of that church.

Dr. Brown then refers to Hale v. Hinkle. He is partially right about his observations concerning that case. That case could be eliminated from any consideration without compromising any assertions in this book. Dr. Brown is correct when he states that the case did not deal with a church. He says that “this ruling had nothing to do with a church and does not mean that a church is a state run entity.” This statement is only partially true in that a church was not involved in the case. However, Hale v. Hinkle presents general incorporation law, and the principles in the case apply to the issue of church incorporation. For example, an incorporated church does give up some of its constitutional protections such as its First Amendment Rights while retaining only due process and equal protection rights just as the corporate officer in Hale v. Hinkle gave up constitutional rights.

Dr. Brown closes his article by saying he has “no particular advice to offer for a church to get or refuse to get incorporated.” This is because he understands neither the Bible principles nor the legal issues involved as is made obvious from reading his article.

In effect, Dr. Brown is stating that God does not care what a church does concerning incorporation since, as he puts it, “It is an issue to decide for themselves.” In other words, according to Dr. Brown, the Bible can be read to both support and condemn incorporation. However, when one opens the word of God, one opens the mind and heart of God concerning this and many other issues. The Bible makes clear that the arguments in Dr. Brown’s article are a disgrace to the cause of Christ.

Loving God is preeminent for a believer and for a church. This brings the reader to the next chapter which explains that men like Dr. Brown, as demonstrated by their words and actions in the light of Bible truth, do not love God. He can prove this to be wrong by repenting, teaching, and applying Bible principles concerning church organization.

[1] 2 Co. 11.2-3.

[2] See Ho. 4.

[3] 2 Pe. 1.4-7.

[4] Ep. 6.10-18.

[5] Ep. 6.14

[6] (BLACK’S LAW DICTIONARY (6^th Ed., 1990), definition of ‘Legal Entity’).”

[7] Ep. 1.22, 23; 2.22; 5.23-24; Col. 1.15-18.

[8] Jn. 3.28, 29; Ro. 7.4; 2 Co. 11.1-4; Ep. 5.23-33; Re. 19.6-8.

[9] 18 AM. JUR. 2D Corporations § 1 (2007).

[10] 18A AM. JUR. 2D Corporations § 156 (2007).

[11] BLACK’S LAW DICTIONARY 340 (6^th Ed. 1990), under definition of “Corporation,” citing Dartmouth College v. Woodward, 17 U.S. (4 Wheat.) 518 (1819)

[12] Ibid.

[13] Mt. 16.18 (Emphasis mine).

[14] 66 AM. JUR. 2D Religious Societies § 5 (2007).

[15] BLACK’S LAW DICTIONARY (6^th Ed., 1990), definition of “sovereign” BLACK’S LAW DICTIONARY (6^th Ed., 1990), definition of “sovereign”

[16] AMERICAN DICTIONARY OF THE ENGLISH LANGUAGE, NOAH WEBSTER (1828).