Good corporate governance includes having a strong set of bylaws, parameters around facility usage, sound tax practices, and appropriate insurance coverage.
Bylaws are important instructions regarding governance and can protect assets from being “taken-over” by outside groups. Assets of a local fellowship can be considerable when taking into account buildings, land, vehicles, and investment/banking accounts. Bylaws provide instructions on how assets are to be used and impart authority for making decisions. Keep in mind:
- Bylaws act as a policy and procedures manual.
- Bylaws should be reviewed periodically to ensure compliance.
- Bylaws should be kept in a secure location.
BSS can assist you in reviewing your existing set of bylaws or in preparing new ones.
Facility Usage Policy
BSS suggests two steps be taken to protect church property from being used in a way that would go against the values and beliefs of the local meeting:
- Add a specific bylaw that states, “The property assets of the fellowship must be used in accordance with the Facility Use Policy as laid out in the Appendix.”
- Place a Facility Use Policy within the Appendix.
BSS can be of assistance in devising bylaw language that will help protect your local church group or ministry from potential litigation and court challenges.
Church groups are required by law to issue 1099-MISC forms as well as W-2 forms. A 1099-MISC form should be issued for each non-employee paid a total of $600 or more in a calendar year. This form should be sent to individuals or organizations (excluding corporations) performing a service — including contractors, janitors, lawn care providers, and even speakers who receive more than $600 in a given year. Additionally, a W-2 should be issued for each employee. The church should withhold payroll taxes (including federal income tax, state income tax, and FICA) for its employees.
- 1099-MISCs and W-2s should be mailed to the payee and the IRS by January 31st of each year.
- All other 1099s are due to the taxpayer by January 31st and to the IRS by February 28th of each year.
God’s Word directs believers to be “subject to the governing authorities” (Romans 13:1) and to submit to “every ordinance of man for the Lord’s sake” (1 Peter 2:13). “For we have regard for what is honorable, not only in the sight of the Lord, but also in the sight of men” (2 Corinthians 8:21).
BSS can assist you with tax compliance questions and in some cases with the preparation of 1099s.
Insurance and Liability
It is critical to have proper insurance. The following types of coverage are essential:
- Property Insurance: Covers replacement cost in the event the building is damaged due to fire or natural disasters and/or theft occurs. Make sure coverage properly addresses flood damage and other weather-related events.
- Automobile Liability: While many church groups do not own any vehicles, volunteers may use their own vehicles in support of activities. Adequate insurance should cover accident costs in such instances, including those related to rented vehicles for sponsored events.
- Directors and Officers Liability: Provides coverage for elders, deacons, and/or trustees in the event a lawsuit occurs related to sponsored activities.
- Umbrella Policy: Covers additional costs after the above protection has been exhausted.
BSS does not provide insurance coverage; however, we can help talk you through some of the issues associated with your coverage needs.