Articles of Incorporation — Your Church’s Legal Birth Certificate
Starting a new church involves more than gathering people or planning services—it requires taking formal legal steps to operate as a tax-exempt organization. One of the most essential steps is filing Articles of Incorporation in your state. Think of this as your church’s legal birth certificate.
This document formalizes your church as a recognized legal entity and lays the foundation for future recognition by the IRS as a 501(c)(3) tax-exempt organization.
Why Incorporation Matters: State vs. Federal Considerations
It’s important to understand that incorporation is handled at the state level, while tax-exempt status is granted federally by the IRS.
Although these are two separate processes, they are closely related. Certain IRS-required clauses must be included in your Articles of Incorporation to qualify for 501(c)(3) status.
Step 1: Understanding Articles of Incorporation
Your Articles of Incorporation establish your church as a legal entity in your state and provide national recognition. This step:
Protects your leaders from personal liability
Enables the church to conduct business and own property
Allows you to open bank accounts and operate under the church’s name
Key Elements to Include:
Church Name – Must be unique and meet state naming requirements
Purpose Statement – Clearly defines the church’s religious and charitable purpose
Registered Agent – An Individual or entity designated to receive legal notices
Governance Structure – Basic details about the board of directors or governing body
IRS-Required Clauses – These ensure compatibility with 501(c)(3) status
Step 2: IRS-Required Clauses — Where State and Federal Rules Intersect
To qualify for federal tax exemption, your articles must include specific language required by the IRS. These clauses demonstrate that your church is organized for charitable or religious purposes, not for personal benefit.
Personal Inurement & Private Benefit
Personal Inurement: No insider (e.g., pastor, board member) may benefit excessively from church assets or income. Compensation must be reasonable and tied to actual services.
Private Benefit: Your church cannot unduly benefit individuals or entities outside its charitable purpose.
Dissolution Clause
This clause specifies what happens to church assets upon dissolution. The IRS requires that remaining assets go to another tax-exempt religious or charitable organization, not to individuals.
Indemnification Clause
An indemnification clause protects your pastors, officers, and directors from personal liability, so long as they act in good faith and within the scope of their responsibilities.
Step 3: Filing Your Articles of Incorporation
Once drafted correctly, take these steps:
File with your state’s Secretary of State (or equivalent agency)
Each state has its own process and filing fee
Obtain certified copies
These may be needed for your EIN and IRS filings
Apply for your EIN
Required to open a bank account, hire staff, and apply for tax exemption
Step 4: Determining If You Need an IRS Determination Letter
By law, churches are automatically tax-exempt under Section 501(c)(3). However, you may apply for an official IRS Determination Letter for added clarity and recognition.
Why You Might Need One:
Proof of status for banks, donors, and grant applications
Required for certain state-level exemptions (property, sales tax)
Strengthens public transparency
Some grantmakers require it
Why You Might Not:
If you rely solely on tithes and offerings
If you're a smaller congregation not seeking grants or property ownership
To avoid additional paperwork and filing fees
Regardless of whether you apply for a determination letter now, including IRS-required clauses in your Articles of Incorporation keeps the door open for filing later, without needing to revise your documents.
Final Word: Don’t Skip Your Church’s Legal Birth Certificate
Before receiving offerings, entering into agreements, or holding services, your church needs its legal foundation in place.
Through Church Launch, Reynolds Law Group takes the guesswork out of drafting and filing your Articles of Incorporation.
