Is it legal for us to join another church?

Introduction: The Increasing Number of Church Mergers

Many churches are looking into mergers as a smart method to grow their missions, reach more people, and make the most of their resources in today's changing ministry environment. But merging two religious groups is more than just bringing together their members and buildings. It also includes a complicated legal process that needs careful planning, compliance, and supervision. For churches with between 2,500 and 10,000 members, like those represented by Church Law and Strategy's PASTOR SUPPORT PLAN, merging with another church is a complicated legal process that requires expert advice, strategic operations advising, and thorough legal audits. This blog gives a complete overview of the legal side of church mergers, including the important steps, possible problems, and how the appropriate legal partnership can make the process go smoothly and be successful.

Why think about merging churches?

More and more churches are merging for a number of reasons, including:

• Some churches are seeing fewer people show up and less money coming in.
• Opportunities to work together on things like ministries, leadership, and facilities.
• Wanting to reach more people or have a bigger effect on the community.
• Strategic answers to changes in the population or ministry goals.

Knowing when and how to legally pursue a merger will help your ministry expand and stay strong while protecting its mission and assets.

The Legal Basis for Merging Churches

What does it mean to merge churches?

Two or more separate churches can combine their assets, debts, and operations into one legal body through a church merger. Mergers are different from informal partnerships or cooperative agreements since they usually mean breaking up one or more businesses and giving their assets to the one that stays.

Different kinds of mergers

• Absorption Merger: One church takes in another, which thus stops being a separate institution.
• Consolidation Merger: Two or more churches join together to make a new organization, ending the old ones.

The option depends on the specific strategic, legal, and operational factors in each case.

Important Legal Things to Think About

Due Diligence

Before moving forward, it is important to do rigorous due diligence to evaluate:

• Liabilities and financial health.
• Property titles and real estate holdings.
• Obligations, debts, and contracts.
• Agreements for work and volunteering.
• Legal problems or the risk of going to court.
• Following the rules for nonprofits and taxes.

Church Law and Strategy's church legal audit and compliance report services give a full examination to find possible hazards and what has to be done.

Documents and Approvals for the Government

When companies merge, they need to look over and often change their governing papers, such as:

• Articles of Incorporation.
• Rules of the organization.
• Rules for mergers and acquisitions.

All of the churches concerned must officially approve the board, usually through special sessions where votes are recorded.

Tax-Exempt Status and the IRS

Mergers must follow IRS rules:

• Making sure that the surviving entity only does things that are allowed by 501(c)(3).
• Sending the IRS the right notices or applications.
• Avoiding unrelated business revenue that could put your tax-exempt status at risk.

Church Law and Strategy's church 501(c)(3) compliance attorney services help with these filings and make sure that the church stays in line with federal law.

Problems with money and property

Moving Assets

Legally, churches that are merging must move their assets, which include:

• Buildings and land.
• Investments and financial accounts.
• Names and logos are examples of intellectual property.

To make sure that ownership is clear and assets are safe, deeds and titles must be properly documented and recorded.

Managing Debts and Liabilities

To avoid future financial problems, it's important to know how obligations move or stay separate. Lenders or third parties may need to agree to contracts and loans.

Things to think about while hiring or volunteering

Mergers affect both personnel and volunteers:

• You might need to renegotiate your employment contracts and benefits.
• Policies for volunteers should be looked over and made the same.
• HR must still follow all federal and state laws.

The church HR and employment law compliance service from Church Law and Strategy helps make transitions in the workforce go smoothly.

Governance and Operational Integration

After the merger, it is very important to combine operations and governance:

• Setting up a single structure for leadership.
• Putting together ministries and programs.
• Making finance and reporting systems work together.
• Keeping lines of communication open with congregations.

Our ministry strategic operations consulting helps churches handle these changes well.

Liability and Risk Management

Mergers come with new risks:

• You need to look over and update your property and liability insurance.
• Risk management policy should apply to the whole organization.
• Liability waivers and safety rules must be the same at all sites.

Church Law and Strategy's church risk management and liability waivers service can help you keep your ministry safe.

How the PASTOR SUPPORT PLAN Helps Churches Merge

The PASTOR SUPPORT PLAN gives you:

• Full legal audits and assessments of compliance.
• Quarterly meetings of the senior team to plan the merger.
• Priority access to legal counsel.
• Reviews of finances and insurance.
• Programs for pastoral support.

The legal process for merging churches step by step

1. First meetings with leadership teams to talk about feasibility and strategy.
2. Due diligence audits to look at risks and assets.
3. Writing and changing rules to allow mergers.
4. Votes from members and board approvals at all congregations.
5. Informing the IRS and submitting any necessary applications.
6. Legally and openly moving assets and debts.
7. Bringing together operations, programs, and governance.
8. Keeping an eye on legal compliance and risk management all the time.

Questions That Are Often Asked

Q: Is a merger the same thing as a partnership?

No. A merger makes two or more businesses into one legally. A partnership is an agreement between two or more businesses to work together without making them one.

Q: Can we join a church in a different state?

Yes, however you need to register in another country and follow the regulations of both states.

Q: How long does it take for two churches to merge?

Usually, it takes a few months to a year, depending on how complicated it is and how many permissions are needed.

Final Thoughts

Legally merging with another church is a great way to make your ministry stronger, but it needs a lot of legal planning and skilled advice. Church Law and Strategy's PASTOR SUPPORT PLAN gives congregations the important help they need to merge with confidence and stay within the law.

This blog article is simply meant to give you information and is not legal advice. You do not become a customer of Church Law and Strategy or its agents by reading this article. If you need legal counsel that is specific to your church or organization, please talk to a professional lawyer.

Links inside

• Church Legal Audit and Compliance Report
• Church Governance Attorney
• Church Risk Management and Liability Waivers

Links to Other Sites

• IRS Nonprofit Compliance Guide: https://www.irs.gov/charities-non-profits
• National Council of Nonprofits: https://www.councilofnonprofits.org/
• State Charity Registration Information: https://www.naag.org/charities/