Generally the not for profit corporation leaves so much room to create a
corporate form amenable to one's needs that this should not be a problem
Marc stern
----- Original Message -----
From: religionlaw-boun...@lists.ucla.edu <religionlaw-boun...@lists.ucla.edu>
To: Law & Religion issues for Law Academics <religionlaw@lists.ucla.edu>
Sent: Thu Mar 12 11:55:39 2009
Subject: Re: NY Religious Corporations Law
Having statutes with apparently mandatory organizational provisions directed at
religious organizations is problematic for the reasons Doug and the other
signatories of the Connecticut letter mention. There are subtler but none the
less troubling issues if a state says that a religious organization can, if it
wishes to incorporate, use the generic nonprofit corporation law, without
providing ample "opt-out" provisions for those aspects of the normal corporate
structure that conflict with the religion's tenets. By and large, this isn't an
issue when the statute allows the charter or bylaws to override statutory
defaults, since an individual church can implement any changes in organization
later mandated by the church's denomination without resort to any public body.
Where such opt-out is lacking, though, there might be a problem of
unconstitutional conditions, since the benefits of limited liability and
perpetual existence have long since ceased to be discretionary with the state
just by virtue of its issuing a corporate charter. When Madison vetoed the
Arlington church's charter, that wasn't the case--corporations had to be
chartered by special act of the legislature.
It seems to me that income tax exemption, whether federal or state, is a
different issue entirely. Exemptions, at least at the federal level (many
states simply rubber-stamp the federal exemption), are not entirely ministerial
for the general run of nonprofit organizations (and there's no requirement that
the organization be incorporated). It seems that the only mandatory provisions
noted on Form 1023 regarding organizational structure require a statement of
exempt purpose and a commitment to using the organization's assets solely for
exempt purposes on dissolution. I'm not aware of cases where these requirements
have been challenged by anyone on religious grounds. I'm also not sure whether
the organization would have to satisfy the same "non-inurement" tests that,
say, an educational or civic organization would; if so, these might provide
grounds for religious objection.
On Thu, Mar 12, 2009 at 10:56 AM, Friedman, Howard M.
<hfri...@utnet.utoledo.edu> wrote:
Probably the earliest development of the corporate form in Roman law
and English law was the "corporation sole" that permitted property to pass from
one bishop to the next when the bishop died. This avoided the inheritance
problems that would be present if title were held in the personal name of the
bishop. Some of the same issues would likely arise if religious entities today
tried to operate in non-corporate form. Beyond this, do we really want clergy
holding property, often purchased with funds from their congregants, in their
own names with the potential for abuse that this could pose? Also, to the
extent that religious corporation statutes impose greater restrictions on
incorporated churches than are imposed on other incorporated non-profits and
charities, isn't there an equal protection problem?
Howard Friedman
________________________________
From: religionlaw-boun...@lists.ucla.edu on behalf of hamilto...@aol.com
Sent: Wed 3/11/2009 3:57 PM
To: religionlaw@lists.ucla.edu
Subject: Re: NY Religious Corporations Law
The question here is whether you can satisfy the rule against judicial
oversight of ecclesiology and permit the states to serve their
legitimate interest in overseeing those that obtain corporation status.
Religious entities need and/or want to be able to operate with the
benefits of a corporation, including property ownership by an entity
that surpasses the lives of any particular individuals and limited
liability. Incorporation is voluntary, so why isn't there an argument
that if they choose incorporation and its benefits, they have to
agree to certain state oversight? While it is relatively easy to point
to potential constituitonal difficulties in the laws as written, there
are difficult issues getting the balance correct.
Marci
Marci A. Hamilton
Paul R. Verkuil Chair in Public Law
Benjamin N. Cardozo School of Law
Yeshiva University
55 Fifth Avenue
New York, NY 10003
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Vance R. Koven
Boston, MA USA
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