A corporation is defined as:
The legal attributes of the corporation, and the alleged benefits that attorneys most commonly discuss with churches to convince them of their need to incorporate are:
One additional legal attribute of any corporation is something that attorneys generally don't like to discuss with their church clients:
In point of fact, there is a great deal that your attorney is not likely to disclose, in the way of the various legal attributes of the corporation, that you might not find so attractive. In the landmark case of Hale vs. Henkel, the U.S. Supreme Court stated the following regarding corporations:
From this case we learn that:
These are not new or novel legal principles that the Supreme Court just discovered in 1906. Rather, these are legal principles that date back many centuries. The corporation is a product of ancient Rome. The corporation, as the legal entity we are familiar with today, dates back to at least 250 B.C.
By 6 A.D. and the codification of Corpus Juris Civilis (the first great codification of Roman civil law) all "spontaneous collectivities of persons" were required to incorporate. The early church was persecuted over their refusal to incorporate. Had they incorporated they could have avoided much of the persecution they otherwise suffered at the hands of the Romans.
Rome persecuted the Christians not for Who they worshipped. Rome had hundreds of deities, and they could care less who or what you worshipped, as long as you were "licit" (licensed). The church was persecuted not because they worshipped Jesus Christ, but because of the manner in which they functioned -- an ecclesia. The church was declared to be "illicit," and held in a state of "civil disobedience," because of their refusal to incorporate. Why did the church refuse incorporation? Largely because they knew that it would destroy their testimony that Jesus Christ is "Lord" and "Sovereign."
Under Roman civil law, "Caesar is sovereign over the corporation," and "the corporation is a creature of the State." The early church willingly suffered for its refusal to accept "State privileges and benefits."
Corporations have been known and widely used for many centuries in virtually every corner of the earth. However, the corporation was not at all widely known in America during the colonial era, and for many decades after our independency. Indeed, the corporation was an entity viewed with great suspicion, if not trepidation. For many years it was extremely difficult and expensive to incorporate and, therefore, it was rather difficult to identify corporations of any kind, especially incorporated churches.
Today, all that is necessary to incorporate is that you fill out the necessary forms and file them with your Secretary Of State's office; but that wasn't always the case. It used to be that if you wanted to incorporate you would have to petition your state legislature for a corporate charter, and they weren't in the habit of handing those out to just anyone who wanted one. In order to be issued a corporate charter, you had to prove to a majority of your state legislators that you simply couldn't operate any other way. As a result, the vast majority of businesses operated as sole proprietorships and general partnerships.
Those who have ever had to petition their state legislature for anything know that it is a time-consuming process, and often leads to frustration, if not failure. For any church to request a corporate charter would surely be met by failure (at least after ratification of the Constitution and the First Amendment), since the states viewed the incorporation of any church as a government "establishment of religion." Some state legislatures, such as Virginia and West Virginia, went so far as to amend their state constitutions to "forever prohibit the incorporation of any church."
Of Madison's historic veto, constitutional law professor John Eidsmoe states in his book, Christianity and the Constitution:
Madison's veto set an historic precedent that was seldom departed from, at least up until the turn of the twentieth-century. In 1898, New Jersey became the first state to "liberalizate" their incorporation laws. The New Jersey state legislature delegated its powers to incorporate to the New Jersey Secretary Of State. Rather than issuing corporate charters, the Secretary Of State issued "articles of incorporation." All the former impediments to obtaining corporate status were done away with.
In order to "compete" with New Jersey, other states quickly followed suit and liberalized their incorporation laws, as well. Soon the mainline church denominations, no longer hindered by state legislators, incorporated. Andrew Carnegie, a wealthy industrialist who sat on the board of directors for the largest Presbyterian denomination (PCUSA), was first to encourage his denomination to incorporate. Carnegie did so not because of all the reasons we hear today. Not once did he ever even mention limited liability protection. Rather, Carnegie spoke highly of the corporation, based upon its alleged "efficiencies."
Other industrialist tycoons, such as Cleveland Dodge and John Wanamaker, who sat on the boards of other mainline denominations, also encouraged their denominations to incorporate, based upon their theories of "improved efficiency." This was the industrial age and industrialists had rapidly become "corporate men." In their worldview, the church too must become "modernized," and incorporation was a necessary element of modernization.
Eventually, many local churches, encouraged by the example of their denominations, also incorporated. By the mid-twentieth century, incorporation of the church had become the status quo.
Madison's veto of 1811, and his reasons for that veto have, by and large, been abandoned, if not completely forgotten.
Of even greater concern is the fact that today's church has, with few exceptions, abandoned the beliefs of the early church fathers who refused to incorporate, and suffered Rome's persecution, as a direct result. Incorporation was mandatory for all "spontaneous collectivities of persons" throughout Rome. Yet they refused Caesar's "privilege."
In America, incorporation is completely voluntary. Furthermore, as we've already mentioned, it used to be almost impossible to incorporate a church, based upon the fact that no church can be free and independent of that government that incorporates it.
Yet churches today incorporate routinely, a decision which they make with about as much care and consideration as what brand of tissue paper to use in their lavatories; this in spite of the fact that there are huge legal and theological ramifications to any church seeking incorporation.
Read on to discover what some of those legal and theological ramifications are.
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