I.M.I.Navigation.Table
Meet The Chaplain
AMI
IMI Ministries
IMI Fellowships
IMI Fellowship By Laws
IMI Home Groups
What We Believe
AMD Music Tracks
IMI Corporation Sole
CS Online Order Form
Corp Sole Package
Custom Ministry Seal
Corporation Sole Study
Corporation Sole
Blacks Law Definitions
Why Corporation Sole?
Corp Sole Defined
Corporation Sole FAQ
Corp Sole History
NRS Chapter 84
IRS
IRS Regulations
Mandatory Exception
Tax Exempt 508
Title 26 USC 6033
Presiding Officer
State Resources
Corporation Sole FAQ
This part of our website is here to deal with some of the most commonly asked questions we receive with respect to corporation sole. We have made them available for you here. As you scroll down through each one, we trust that they will answer many of the questions you may have as well. Each of these questions is answered from a ministry or charitable perspective.
Corporation Sole is for you if?
Understanding that a "Corporation Sole" is established for ecclesiastical purposes , we have a great commission that lay before every Chris tian person. In the Holy Bible we can read in Mark 16:15 & 16. Go ye into all the world and preach the gospel to every creature. He that believeth and is baptized shall be saved; but he that believeth not shall be damned. This commission comes from the High Priest Himself; The chief corner stone and head over all the church, Jesus The anointed one. We can see that every believer has been given a call to evangelism from the King of kings and Lord of lords.
Our purpose in providing this material is specifically for individuals and organizations whose true intentions are exemplified through eleemosynary (charitable) practices as divergent to merely selfish or self centered motives. Impact Ministries International supports the establishment of corporation sole for religious, educational and charitable purposes. Impact Ministries International does not support , condone or intend to participate in any way in the formation or operation of corporation sole for any illegal, fraudulent or unethical purposes. Impact Ministries International maintains spiritual, lawful and ethical integrity as it pertains to all respective matters and proper formation of corporation sole.
Impact Ministries International supports government's rights to exercise it's powers within the proper context. However, there are may instances where intrusion by governments agencies at the local, state and federal levels have not always served in the best interest of certain individuals or organizations. With laws and public policy changing almost annually, the corporation sole is a welcomed answer to limiting government intrusion unnecessarily as our ministerial or charitable goals are brought to fruition.
How Can I Be A Church?
When considering this question it is wise to look to the scriptures of the Holy Bible for the answer. You will find that throughout the entire New Testament God's people have always been referred to as the church. In the original translation of the Holy Bible as written in Greek language you will find that everywhere the word "church" is mentioned in the New Testament is the Greek word "Ekklesia" meaning the called out ones , believers, those who have accepted Jesus as Lord and Savior of their life. Additionally, corporation sole allows for you as a Chris tian to form an ecclesiastical office as representative of the church. In Black's Law Dictionary , one of the definitions for a church is: the clergy or officialdom of a religious body. Webster's Dictionary states that a religion is: a personal set of beliefs and practices held to with faith and ardor.
What Is A Simple Definition of a CS?
It is an unusual type of corporation consisting of only one person whose successor becomes the corporation on his death or resignation and therefore , lives on in perpetuity.
What Powers Does A CS Have?
Contract in the same manner as a natural person.
Sue and be sued.
Defend and be defended in all courts.
Borrow money and give promissory notes.
Buy, sell, lease, mortgage and in every way deal in real & personal property.
Receive bequests and income for its own use.
Appoint attorneys in fact.
What Are The Modern Uses For CS?
The Catholic Church, the Mormon Church, and Jewish Synagogues represent the largest segment of those to whom use the CS today. The structure of the CS is so flexible it can run a very large or a very small organization. The CS can be used for all kinds of Ministerial, Educational and Charitable activities. It has quite a bit of latitude in this regard.
Can A CS Accept Charitable Donations?
Yes. IRS Publication 526 indicates that "qualified organizations" can accept charitable donations simply by virtue of being a church. Churches do not need to apply to be a "qualified organization." The CS can take tax-deductible donations for its mission. It qualifies as a 50% organization, meaning that the deduction for a taxable person's charitable contributions can be 50% of their adjusted gross income for the year. If you work for W-2 wages and are the office holder in a CS, you could donate 50% of your adjusted gross income to the CS for its mission. IMI is strongly recommending that if you elect to donate 50% of your adjusted gross income to the CS that you are the officer of , then you absolutely do not want to claim a tax deduction on your personal income tax. Why? Under current law , as recently amended, contributions by a taxpayer to his own church , even including compulsory dues, tithes, or fees are deductible so long as the congregant receives in return only "intangible religious benefits...which generally [are] not sold in a commercial transaction outside of the donative context" 26 U.S.C. ~ 170(f)(8)(B)(3). This new language does not solve the puzzle concerning personal donations to ones ministry, however it does give us a clue as to where the IRS is going with it. Ultimately the IRS would like to disallow this type of deduction. Don't become a test case! Bottom line is in most cases you will be receiving some type of "tangible benefits" through your CS thereby disallowing your personal tax deduction.
The CS can make charitable donations to other organizations, too , with NO reporting requirement. When accepting a tax-deductible donation for the CS, it is important to write a formal letter of acceptance to the contributor. It must have the name of the CS, the address of the CS, the amount of the donation and a general statement accepting the donation of goods or monies on behalf of the CS to be used to further the mission, less any remuneration to the giver such as receiving a special gift for their donation. Also it is a good idea to include the EIN of your ministry somewhere on your formal letter of acceptance or donation receipt.
Can the CS Run a Business?
Impact Ministries International does not condone or recommend that you use your corporation sole to be engaged in any type of active business that operates out side of the scope of your ministerial, educational, or charitable purposes. Furthermore, even though strategically and theoretically the CS can be tied in a passive way to other businesses through private contract, there is absolutely no case law in the courts that will support this position. Additionally, it is IMI's position that within the next few years there will be court cases that will deal with these issues as it relates to UBTI and the misuse of corporation sole among other entities. A word to the wise is sufficient here. If you are doing for profit business activity, we urge you to use proper system structures appropriate for the type of business you are doing and let "Corporation Sole" be used for all of your non-profit activities.
Now, there are those among corporation sole providers that will answer the question of "Can the CS run a Business" with a resounding Yes. In examining this matter in more detail, we find their prevailing thought is theoretically... The CS can enter into a contract with an existing business to be the fiduciary or administrative/managerial head of the business so all profits go to the CS tax-free. If the business is set up as an LLC , S or C Corp. , there are reporting requirements for those entities even though there is no tax liability. You would be exposing the CS as the head of the business. Not a problem, but you give away some privacy. The CS could "buy" the existing business, the former business would close on paper, following the IRS guidelines for closing or ending this entity.
The CS owned business could continue with a slightly different name. Example: Rapha Care Center, LLC is sold to Rapha Care Ministry, Mission, Foundation, Affiliation, Group, Assembly , Community Center, or RC Group, etc. The Rapha Care Center, LLC is closed according to the guidelines for your state. Avoid standard commerce terms for the CS such as services , company , corporation , etc. Think of the Apostle Paul who was a tent-maker. The CS can run a business to provide a means to follow its mission. It can be a grocery, contractor, carpenter, department store, school, medical office just about anything you can think of that is legal and lawful.
Again, I want to reiterate here that IMI does not condone or even recommend that you use your corporation sole in this manner! We have only included this language in order that you would be aware of some of the misuses of corporation sole today. Sooner or later these type of people are going to have address issues of UBTI [Unrelated Business Tax Income]. We do not want you to be one of them.
Can a CS get a Business License, should it?
If the license is for a business which must have a license in order to do business, it would be appropriate. Examples would be contractors doing humanitarian projects and medical offices providing benevolent care. If you are speaking of a broker's license, the CS cannot, because those are issued to individuals and not businesses. Local laws will establish if a Church HAS to get a license. Check with your city or county laws in the area in which you live/operate.
Should the CS have Employees?
It is a question that needs to be asked and part of the answer it is better to have independent contractors working for the CS and give 1099's if the person wants one. The CS is not obligated to give 1099's. In doing this one must remember to consider and understand the IRS rules for what determines employee status and what determines contractor status or you may find yourself dealing with a potential problem as it relates to the individual you were contracting for services. As a general rule, if you control when a worker comes and leaves and limit them in the scope of their assignments, IRS may regard this type of person as an employee of the church.
Another consideration could be , the CS also has the power to provide an honorarium or gift to those whom volunteer there efforts and talents to extend the vision and scope of the ministry. We always recommend pursuing strong volunteer support for your ministry.
While a CS can act as an employer for hiring working staff, we recommend that you consider using an employment staffing agency as necessary, thus you do not put the CS in a position of having to do payroll deductions for hourly/staffed employees. If you already have a 501(c)(3) organization established , you may want to consider using it as the employment arm for your ministry while using the CS for all other aspects of ministry work.
Can I still get Insurance on the things in the CS?
Yes. The CS in the banking world is considered a business entity and so all insurance of items qualifies as being owned by the business and standard insurance is available as such. Some State Farm Bureau Insurance agencies have been helpful, but I would check with your own insurance company first.
Is the CS liable for Property and Sales Taxes?
Depending on your zoning ordinances and county assessor, the property can be rezoned or taken off the tax roles (Can you have a commercial property in your residential area?). Consider whether the amount of the property tax is great enough for you to want to petition for exemption. Remember, property tax is handled on a county by county issue across the United States. In most cases if the property is not being used exclusively for exempt purposes, the county tax assessment office will typically only allow a (%) percentage deduction based on the size of the property and what percentage of the property is being used for exempt purposes. Presently in most cases Parsonages, personal residential dwellings and rental properties do not qualify for tax exempt status in many counties around the United States.
Sales tax is much the same and can depend on city, county and state ordinances. Typically if a CS is wanting to be exempt from sales tax it will have to file in the state that it is wanting sales tax exemption from. Usually this will entail an additional filing of the CS as a foreign non-profit organization within the state you are seeking a sales tax exemption from. You should consider well the ramifications of such a filing as it will give the state certain access to piecing the corporate veil of your CS. Questions regarding this matter can be directed to the attention of Impact Ministries International by consultation should you need it.
What if I already have a 501(c)(3) organization?
There are procedures in the regulations of non-profit organizations that you can follow to terminate this designation. At the same time you can change the name slightly and continue your mission as a Corporation Sole. The relief from the reports and scrutiny are worth it. Is your covenant with God or the government? Which will be the most beneficial to the mission? However, it is the view of Impact Ministries International that it is much better to establish a new CS rather than trying to undo what you have already established as a 501(c)(3) organization. You can then decide what you want to do with the 501 (c)(3) organization. We suggest this because more than likely you have established an aggregate corporation which is a creature of the state and therefore statutorily regulated by the state. A CS is not a creature of the state. There is an important difference between the two.
What Do I Do with the CS Documents?
These are very important documents and you will want to keep in a safe place. You will be adding documents to the initial formation documents, and it is wise to keep them all together and well organized. IMI has already provided you with a custom portfolio for your documents. We strongly suggest that you use it or an additional binder to safe store any important document related to your CS.
Opening a Bank Account
Once you have the Certificate of Existence and the Certificate of Incorporation , you can open a bank account. Most banks now a days will request to see The Articles of Incorporation. While you can refuse to do this, be aware that the US Patriot Acts 1 & 2 give the banks the authority to basically make their banking policy law. In other words, if you do not comply with the banking policies of the bank, they do not have to do business with you.
When choosing a bank to open account the terminology you will be using is simply this: I need to open a non-interest bearing, business checking account for a non profit corporation.
What to take with you
Corporate resolution/ letter of introduction on CS letterhead.
The original page-protected Certificate of Existence/Authorization.
The original page-protected Certificate of Incorporation.
EIN number
Drivers license # or Passport
A photocopy of the Articles of Corporation Sole placed in a manila envelope .
We hope that this has been a help to you. If you still have questions remaining concerning how CS can be properly used for ministry, education, and charitable purposes, then please feel free to contact us at:
Impact Ministries 877-397-5263
Email:
corporationsole@impactministries-int.net
If you would like to receive a free 22 page report on Corporation Sole click
here.
