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What are the pros and cons of incorporating a church?

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What are the pros and cons of incorporating a church?

What are the pros and cons of incorporation for our church, especially as it relates to limited liability?

Most organizations find it advantageous to incorporate in order to limit personal liability of the members. If the organization acts as an unincorporated association, depending on state law, each of the members could be personally liable for the obligations of the organization, as if they were general partners, even though they personally had nothing to do with the event that caused the liability. In many states an unincorporated association, which is the principal alternative to incorporation, may not own real property.  In addition, state corporation laws are generally more helpful in dealing with all of the procedural issues affecting governance. Probably most attorneys believe that the corporate structure is more appropriate than an unincorporated association for any organization carrying on a serious program unless the state has adopted some form of the Uniform Unincorporated Nonprofit Association Act.  (See Ready Reference Page: Revised Uniform Unincorporated Association Act Provides Clarification for Rules of Conduct")

Monday, March 3, 2008

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