New York Religious Corporations Law: Everything to Know
The New York Religious Corporations Law is a law that covers religious organizations that have decided to form a corporation.3 min read
The New York Religious Corporations Law is a law that covers religious organizations that have decided to form a corporation.
Introduction to New York Religious Corporations Law
In many circumstances, it can be beneficial for organizations of a religious nature to form a corporation. For example, when a religious organization incorporates, they will have access to the same legal benefits afforded to corporate entities, including limited liability.
When a religious group forms a corporation, they will be subject to the New York Religious Corporations Law (RCL). These groups are also governed by the Not-for-Profit Corporations Law (NPL) in certain circumstances. When these two laws interact, it can be very complicated. Any religious group that is thinking about incorporating needs to seek guidance from a lawyer to make sure they fully understand both the NPL and RCL.
Thanks to the Establishment Clause of the United States Constitution, establishing a religious corporation is considerably easier than forming other types of corporations. In the New York RCL, you will find statutes that cover all types of religious corporations, as well as statutes that apply to specific denominations.
If your religious group maintains a building intended for worship, you will need to file Articles of Incorporation in the county where your organization is physically located. This differs from other corporations who must file their Articles of Incorporation with the State.
Another difference between religious corporations and regular nonprofit corporations is that religious corporations do need the permission of the attorney general before dissolving. In most cases, a religious corporation will need to acquire permission from the attorney general before selling property. However, if the sale of property is a part of dissolving the company, permission will need to be granted by the New York State Supreme Court. Any issues that are not covered by the RCL are subject to the NPL.
You should contact an attorney for selling property as a religious corporation or attempting to dissolve your religious corporation.
Churches of New York are generally not considered to be a corporation. The exception is the New York Archdiocese, which is a religious corporation. This means that the Archdiocese is subject to the Religious Corporations Law.
Churches of New York are allowed to:
- Buy property.
- Lease or sell property.
- Mortgage property to obtain a loan with court approval.
Before any of these actions can take place, permission must be granted by the New York State Attorney General. The reason that permission is needed is that there are statutes whose purposes is preventing churches from selling property to the detriment of church members.
Generally, religious institutions do not own property or have real estate holdings. A large number of New York churches have only one building that is used expressly for worship. The RCL helps facilitate real estate transactions while protecting churches and their members.
Religious Corporations Law and Church Mortgages
Without regulations and rules, it can be difficult to mortgage nonresidential and commercial properties. This issue is particularly complicated when the property in question is a church. In addition to approval from a regional or local religious affiliation, court approval must also be granted before a church building can be mortgaged.
Typically, a church will need a loan to fund some sort of project. This can include monetary payouts meant to compensate for the bad actions of church officials.
Generally, churches do not need approval from a court to complete transactions. However, mortgaging a church building is a unique situation. Normal mortgages and loans do not need court approval. However, church buildings are usually not owned by an individual, which is why mortgaging a church must involve the courts.
Religious corporations, such as the New York Archdiocese, are subject to the Religious Corporations Law, which means the courts must assist these corporations in certain transactions, especially those involving real estate.
New York Court Approval
Religious corporations have two options or obtaining court approval for their activities. By applying directly with the Attorney General, the corporation should be able to decide which option. Hiring an attorney can help religious corporations meet these legal requirements.
Applying with the Attorney General can be a could choice because it can prevent the religious corporation from facing opposition from the community or church members. In order to mortgage church real estate, a petition must be filed with the State Supreme Court in the county where the property is located.
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