014: Why Your Church Should Be Incorporated

One quick way to reduce your church’s liability is to make sure your church is incorporated as anon-profit corporation. Why does this matter? If your church is not a non-profit corporation, you are an unincorporated association. You may have been an unincorporated association for years and years. A good indication that your church is formed as an unincorporated association is if your church has a constitution and not by-laws. What this means is that if sued, and if there is not insurance coverage or enough insurance coverage, the liability for judgment is going to rest on the shoulders of all the members of the church (not the church itself), and they will have to pay the judgment. Those with the highest net worth may be the most at risk, because the judgment would be joint and several with all the members, and the member with the deepest pocket is the one who would be at the most risk. By incorporating your church, you limit the liability to only the assets of the church and thereby reduce the liability of the members of your church.