"Religious Corporation" laws
sparkesp at nku.edu
Thu Oct 14 14:36:20 PDT 2004
A church could not incorporate under the former Membership Corporations
Law, the predecessor to the current Not-for-Profit Corporation Law in
New York; it could incorporate only under the Religious Corporations
Law. The Not-for-Profit Corporation Law introduced the concept of "type"
to New York law. See NPCL section 201. The Type B corporation was made
essentially synonymous with corporations exempt from taxation under IRC
501(c)(3). Doing so destroyed the mutual exclusivity that formerly
existed between the Membership Corporations Law and the Religious
Corporations Law. The Secretary of State has since accepted certificates
of incorporation under either the NPCL or the RCL.
The Religious Corporation Law has numerous denomination-specific
articles. Churches that incorporate under the denomination-specific
articles file their certificates with county clerks rather than with the
Secretary of State. Non-denominational churches are treated as "free
churches" under the RCL, and only they file with the Secretary of State.
Many who newly incorporate such independent churches are unaware of the
existence of the RCL. However, the RCL's one-size-fits-all approach to
these non-denominational churches fits most of them poorly, so even
those who are aware tend to resort to filing under the NPCL instead.
The RCL reflects a sensitivity to constitutional concerns, at least as
they were understood years ago when it was drafted. With the passage of
time, I think Prof. Stern is correct to suggest that at least some
provisions would not withstand scrutiny. I think he is also correct to
suggest that there is little incentive to test that notion. The NPCL,
however, reflects no such sensitivity and treats a type B corporation
formed for a religious purpose as it would a corporation formed for a
secular purpose. The potential for entanglement is even stronger there.
I am not aware that any New York court has considered how a corporation
formed under the NPCL should be treated when compared to a similarly
situated corporation formed under the RCL.
Phillip M. Sparkes
Director and Assistant Professor of Law
Local Government Law Center
Salmon P. Chase College of Law
Nunn Hall 406, Nunn Drive
Highland Heights, KY 41099
From: religionlaw-bounces at lists.ucla.edu
[mailto:religionlaw-bounces at lists.ucla.edu] On Behalf Of marc stern
Sent: Thursday, October 14, 2004 2:46 PM
To: 'Law & Religion issues for Law Academics'
Subject: RE: "Religious Corporation" laws
In New York all not for profits need to secure the approval of a Supreme
Court justice for the sale of real estate -at least if it is a major
asset. For reasons that are now obscure, New York allows religious
corporations to incorporate either under the religious corporation law
or the not for profit corporation law. The Religious Corporation law
contains specific provisos for each faith .It may well be
unconstitutional, and from time to time there is talk of making it more
neutral, but too much property and other things are under this code ands
no one wants to deal with all the fall out that would arise if the rules
Unfortunately, the problem of fraud -or exploitation by officers- in the
sale of buildings by houses of worship (often almost defunct houses of
worship) is no chimera. It is a common phenomenon.
From: religionlaw-bounces at lists.ucla.edu
[mailto:religionlaw-bounces at lists.ucla.edu] On Behalf Of Will Linden
Sent: Thursday, October 14, 2004 1:07 PM
To: Law & Religion issues for Law Academics
Subject: "Religious Corporation" laws
As president of a church ("Call this 'organized religion'? I'LL give
them organized religion!") I recently had to sign a contract for the
sale of real property. We were advised that our attorney has to get
court approval for the sale under New York's Religious Corporations Law,
which we are told was created to "protect" churches against unscrupulous
cliques or something. As I muttered "So why don't secular organizations
need to be 'protected'", I thought to ask:
Is imposing additional requirements on organizations classed as
religious a form of "viewpoint discrimination"?
If the judge goes around the bend, could we bring a RLUIPA claim on the
ground that fiscal survival is essential to our mission?
Does anyone have some hard history about this law?
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