assey, Stotser & Nichols, P.C. headquartered in Birmingham, Alabama and serving Southeastern Alabama is a full service law firm with a practice group in the area of church representations or nonprofit, tax-exempt organizations.
Churches and church activities entities can be public charities, religious organizations, private foundations, social welfare organizations, child care facilities, food banks, hospitals, schools at all levels including colleges and universities, and trade associations.
Nonprofit tax exempt organizations
Business are formed for profit or nonprofit purposes. Churches generally operate as nonprofit entities. The monies the religious organization raises are not distributed to shareholders but instead are used to fund programs and outreach activities consistent with the tenets of the faith involved.
The formation and dissolution of a nonprofit organization is just like the formation of a for profit business. The religious organization must complete the following steps:
- Choose name and ensure it is available for use
- File paperwork, including articles of incorporation, that explain nature and purpose of the nonprofit organization.
- Apply for federal and state tax exempt status
- Create corporate bylaws
- Hold appropriate incorporation meetings, including the first meeting of the Board of Directors
- Obtain any required licenses or permits from the county or state governments
Once these items are complete, the organization petitions the Internal Revenue Service to grant it tax exempt status.
Difference Between Nonprofit and Tax-Exempt Status
Nonprofit status is determined at the state level and governed by the law in Alabama. When an organization is granted nonprofit status in Alabama it is eligible for benefits like state sales, property and income tax exemptions. Tax-exempt status is a separate benefit and applies to the organization’s federal income tax, often referred to as 501(c) status. When granted by the federal government the organization is exempt from federal income tax.
Legal Representations of Churches Services
Religious organizations offer many services to their communities. Some of the activities are directly related to the church and operation of the church, while others involve the community outreach. Because of the diverse and varied nature of church activities law firms that represent churches assist churches with the following transactions:
- Guidance on day to day operations of the church
- Guidance on corporate governance of nonprofit exempt organization
- Representation of church before governmental agencies, including the Internal Revenue Code
- Representation of church in actions where the church is the plaintiff or vice versa
- Setting up and dissolving nonprofit organizations
- Provide advice and counsel on legal questions about general and specific corporate matters
- Develop children’s safety procedures
- Develop employment procedures including new hire program and employee handbook
- Develop volunteer procedures
- Develop temporary staffing procedures for events or missions
- Obtain necessary travel documents and visas for international church activities or retreats
- Representation of church in real estate transaction including buying and selling church property, renting church property, processing bequeaths or estate gifts
- Representation of church in litigation
- Representation of church in mergers or acquisitions of other churches
- Investigating white collar crimes and creating financial controls to minimize theft of church funds or property
REPRESENTATION OF CHURCHES LAWYERS IN ALABAMA
To learn more about how we can help your church, contact the law offices of Massey, Stotser & Nichols, P.C. to set up a consultation.
Massey, Stotser & Nichols, P.C. is a full service, Birmingham, Alabama law firm that serves clients throughout Jefferson, Blount, Shelby, St. Clair, and Tuscaloosa counties. Visit our website at msnattorneys.com for more information about our business law, family law, and accident and injury law practice groups.