Every so often, I get a phone call from a ministry leader asking about allowable activities for the church. In many instances, the question concerns an activity the church is considering undergoing and wants some guidance as to whether they can engage in an endeavor.
This question is answered by taking a look at two authorities. First, we must consider what activities are permitted under North Carolina state law. Secondly, a church should look at its own governing documents to see if any limitations exist. For the purposes of this article, we examine the powers granted an incorporated church by North Carolina statutory law.
Churches and ministries organized as corporations in North Carolina have specific powers granted under state law. These powers have been approved by the NC General Assembly to help corporations know what is generally allowable in this state. The law that outlines these powers is called the North Carolina Nonprofit Corporation Act.
The Act states that “Every corporation incorporated under this Chapter has the purpose of engaging in any lawful activity unless a more limited purpose is set forth in its articles of incorporation.” The Act goes onto to provide a list of general powers incorporated churches may conduct. Here is a partial list of some of the activities afforded an incorporated church:
- To sue and be sued, complain and defend in its corporate name;
- To have a corporate seal, which may be altered at will, and to use it, or a facsimile of it, by impressing or affixing it or in any other manner reproducing it;
- To make and amend bylaws not inconsistent with its articles of incorporation or with the laws of this State, for regulating and managing the affairs of the corporation;
- To purchase, receive, lease, or otherwise acquire, and own, hold, improve, use, and otherwise deal with, real or personal property, or any legal or equitable interest in property, wherever located;
- To sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property;
- To purchase, receive, subscribe for, or otherwise acquire; own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of; and deal in and with shares or other interests in, or obligations of, any other entity;
- To make contracts and guarantees, incur liabilities, borrow money, issue its notes, bonds, and other obligations, and secure any of its obligations by mortgage or pledge of any of its property, franchises, or income;
- To lend money, invest and reinvest its funds, and receive and hold real and personal property as security for repayment;
- To be a promoter, partner, member, associate or manager of any partnership, joint venture, trust, or other entity;
- To conduct its affairs, locate offices, and exercise the powers granted by this Chapter within or without this State;
- To elect or appoint directors, officers, employees, and agents of the corporation, define their duties, and fix their compensation;
- To pay pensions and establish pension plans, pension trusts, and other benefit and incentive plans for any or all of its current or former directors, officers, employees, and agents;
- To make donations for the public welfare or for charitable, religious, cultural, scientific, or educational purposes, and to make payments or donations not inconsistent with law for other purposes that further the corporate interest;
- To impose dues, assessments, admission and transfer fees upon its members;
- To establish conditions for admission of members, admit members and issue memberships;
- To do all things necessary or convenient, not inconsistent with law, to further the activities and affairs of the corporation.