Steps For Structuring A Church Organization To Avoid Internal Disputes
In the State of Illinois a church is usually organized and classified as a not-for-profit corporation. As with any organization, disputes can arise, but Illinois Courts historically are reluctant to make decisions in disputes that are of an ecclesiastical nature.
Building A Church To Operate as a Not For Profit BusinessStructuring an Illinois church as a business requires a knowledge of how a business should operate, an action plan in the form of written bylaws, and an understanding of what the State of Illinois requires of not-for-profit corporations.
A not-for-profit corporation must have articles of incorporation on file with the Illinois Secretary of State and each year an annual report must be filed.
The church bylaws should be clear, concise and in writing.
The manner in which church board members are elected should be outlined and followed during church elections. The manner in which a written budget is determined and how church donations are allocated is a must.
A provision in the bylaws that disputes will be handled via mediation or arbitration can avoid costly court litigation with no clear winner since sitting judges in Illinois are reluctant to make decisions about ecclesiastical issues. See Bruss v Przybula, 385 Ill App. 3d 399 (2005).
In many cases it is difficult for an attorney representing plaintiffs to successfully argue that a church dispute is not of an ecclesiastical nature since most church activity is ecclesiastical in nature. For example, in a recent case filed in the Chancery Division of the Circuit Court of Cook County, Illinois the sitting judge ruled in favor of the plaintiffs by declaring that one of the defendants, the church minister, was not properly elected because the church was operating off of a revised set of bylaws that the court determined was null and void. However, the judge failed to mention and did not grant the plaintiff's request for an injunction which would have barred the newly elected minister from serving.
The First Step To Avoid the Hostile Take Over Of A ChurchIt is imperative that the elected Board of Directors of a church, establish a written criteria for church membership and maintain a confidential file of members' pertinent information. This will eliminate the possibility of a hostile take over by those who have no real affiliation with the church and who seek to get control of the church finances.
As with any business entity, a lawyer and accountant should be retained for regular consultation with the board of directors.