Corporation Or Association?

[LykosTemple]

First of all, no: I’m not looking for legal, lawyer-like advice. I’m only asking for opinions from experienced people who’ve already gone thru the hoops.

I’m in the process of developing infrastructure for my small, home-based church. And I’ve seen some people who’ve incorporated, and others who have not, and have instead created an unincorporated nonprofit association.

So far, unfortunately, most of these URLs are from documents whose authors have ceased editing these web pages, or people who, so far, haven’t bothered to email me back.

To review: I live in California, and am a chartered ULC Congregation. So far, I have a sole proprietorship business (which I’m attaching to the church, to make money for its maintenance). This business has a bank account, and a Paypal account, a toll-free, phone/FAX number, and will soon have a Meet Up account…. I even know where I want our little group to meet.

What I don’t have is a DBA (yet), articles of organizational creation and what to do after that (don’t worry, once I’ve gotten everything together, I’ll get the last part put together myself).

We’re a small group, and we don’t intend to beg on the street for money (not our style). So: corporation or association? I’m mostly asking those Congregations who are in California, and who have already done it … that’s all.

Many thanks in advance for your advice.

[mdtaylor]

We’re a small group, and we don’t intend to beg on the street for money (not our style). So: corporation or association? I’m mostly asking those Congregations who are in California, and who have already done it … that’s all.

It makes no difference if you are begging on the street, conducting bake sales, rummage sales, auctions, any other fund raising operation, or simply accepting donations from your congregation. If you want your donors to be able to deduct their donations to you from their personal (and if you score big money from businesses) income taxes, then you want to incorporate and obtain a 501c exemption.

In the case of a business donor you can be assured that they will not donate unless it is tax deductible.

[Yael - HaMorit]

It makes no difference if you are begging on the street, conducting bake sales, rummage sales, auctions, any other fund raising operation, or simply accepting donations from your congregation. If you want your donors to be able to deduct their donations to you from their personal (and if you score big money from businesses) income taxes, then you want to incorporate and obtain a 501c exemption.

In the case of a business donor you can be assured that they will not donate unless it is tax deductible.

Be aware that you will have to keep VERY GOOD accounting books. Without it, you could risk losing your 501 3c status. In fact, the ULC-Modesto won a court case simply because they were able to show its books and its activities clearly to the court.

[Fr_Chuck]

yes, and "attaching" a business to your church may very well cause many problems unless it is church related. Also non related business for profit even if owned by a church can still be taxable.

And if you take any money from it, you will owe money persoally since you are taking it as income.

[LykosTemple]

#1: Thanks for all the replies. I am getting a lawyer for this situation, and perhaps it might be different in California. If it isn't, I'll still get the unincorporated religious association designation until I can afford the corporation paperwork, which can cost upwards of $150.00, plus the tax exempt paperwork…. A minimum of $350.00

#2: I'm actually getting two DBA's --- one a sole proprietorship, which -- if it doesn't make at least $50,000 for the year -- isn't liable for income taxes. I know this because Raven Enterprises, a sole proprietorship, has been in business already for two years. We've not done that much business, so I'll be keeping it that way. This income will be donating some of its income to Lykos Temple Sanctuary (it can't donate more than 50% of said income; I found this out from a friend of mine who had a metaphysical church in Hollywood). Lykos Temple Sanctuary, as a(n) (un)incorporated religious church, won't be doing anything unrelated for quite a while, at least until I have a better idea of what we can and can't do. I believe this will help me in the long run.

I really wish that somebody in the ULC was somewhere here locally, one who's been thru this themselves… someone I can call or visit locally, to talk to; I could really use a mentor. If not, perhaps I can talk to S.C.O.R.E. (an organization of retired executives… some of whom might have been part of a religious "business"). One never knows…. The only catch is that I have to join their "student body" (which will cost me,… but then, so does everything nowadays).

If anyone can help me, I would really appreciate the advice…. As always, many thanks.