Incorporation
There are two ways to incorporate in the state of Missouri. The easiest way is to fill out Form Corp 52 – Articles of Incorporation of a Nonprofit Corporation through the Secretary of Stateʼs office. You can download the form from this link. There is a small filing fee.
The second way is to have a lawyer draft Articles of Incorporation and file them with the Secretary of Stateʼs Office.
The main reason to incorporate is the liability of church members. Unincorporated churches are susceptible to liability among members for accident claims, contract disputes and employment issues. Another reason is unincorporated churches can not enter into legal contracts or incur debt for building.
Tax Exempt Status & Tax Issues
Unaffiliated churches need to apply with the IRS and complete Form 1023. This is a long and expensive process. It typically takes six to 12 months to receive exempt status from the IRS and costs $500 – $1,000 to apply. When a church becomes affiliated with the Missouri Baptist Convention, that church falls under the Conventionʼs federal tax exempt status. The MBC will report that church as an affiliated church in the Annual Book of Reports. The church will receive a Charter Letter from the Convention confirming that it is affiliated with the Convention and falls under our tax status. The church also will receive a copy of our tax exempt letter.
A church can obtain a federal identification number by filling out the IRS Form SS-4. The IRS will issue the church a nine-digit identification number (xx-xxxxxxx) that the church will use for reporting to the IRS. A federal identification number is needed for churches to report to the IRS such things as payroll tax, W-2s, 1099s and any other reporting to the IRS.
Website: www.irs.gov – Form SS-4
As a tax exempt organization, you do not have to pay federal tax on related income for your church. If a church has unrelated income (income not related to the tax exempt purposes), the church must pay tax on that type of income. The federal tax exemption does not relieve a church of paying sales tax on purchases in the state of Missouri.
However, the church may apply for a sales tax exemption with the state of Missouri and therefore avoid paying sales tax. When a church affiliates with the Convention it receives a packet of information that includes an application for sales tax exemption, Form 1746 – Missouri Sales/Use Tax Exemption Application and instructions on how to apply.
Website: www.irs.gov – Form 1023 and 990T (tax from for unrelated taxable income)
By-laws and Constitution
The constitution and by-laws of a church contain the basic rules of procedure and organization. They define the rights and duties of the members of the church and ensure that the will of the majority is carried out in proper procedure.
Church by-laws and articles of constitution should be drafted by a committee elected by the church and then approved by the church. More information may be obtained from the Church Incorporation Constitution and Bylaws Manual.
Affiliation
One benefit of affiliation is the churchʼs commitment to cooperative missions and ministry through the Southern Baptist Convention and the Cooperative Program. Another benefit is that a church affiliated with the Missouri Baptist Convention falls under the Conventionʼs federal tax exempt status and does not have to apply for individual tax exempt status.
Contact the church planting team of the Missouri Baptist Convention to obtain an application for affiliation, or download an application here: