How to Launch Your Church by Easter, Part 2

By Christine Bove

This is part two on starting a church in time to launch by Easter. If you missed the first week, check it out here.

What does it take to start a church? 

Starting a church is a very exciting phase of ministry. After all the excitement and receiving validation from God and affirmation from the people in your community, what comes next? 

There are many aspects and details that come with creating a new church that should be thought through. For instance, have you considered where the church will be located? How will services be designed? And there are more aspects to consider, like creating a launch team and strategizing a financial plan, to name a few. 

In addition, one of the key elements of starting a legitimate church is to establish your church on a legal foundation. 

Building a solid legal foundation gives freedom for church growth and establishes IRS compliance. Because of the freedom and security it gives, it’s one of the top priorities for establishing a church or ministry.

Launch your church on a legal foundation in just five steps: 

• Incorporate your church
• Obtain a Federal Employer Identification Number 
• Create and adopt bylaws tailored to your church
• Establish policies and procedures 
• Apply for and obtain the 501(c)(3) tax-exempt status

Step 1. Incorporate your church

The first step in legally starting your church is to choose a name for your church or ministry.   Then, it is recommended to draft and file articles of incorporation with the Secretary of State.

Your articles of incorporation should include a purpose statement, a dissolution statement, and other state and IRS provisional language.

If your church plans to ordain pastors and ministers, make sure that your purpose statement declares that your church or ministry has the intent to license, ordain, and oversee ministers of the gospel. 

Step 2. Obtain a Federal Employer Identification Number (FEIN)

For your second step, you will want to obtain a Federal Employer Identification Number (FEIN) from the IRS.

The FEIN acts as your organization’s tax identification number. Think of it as a social security number. With this number, along with your articles of incorporation, most banks will allow you to open a bank account in the name of your organization. Once you have a bank account, you can begin to receive donations. 

It’s important to note that applying for your FEIN must be done correctly, or it will lead to severe problems in the future. 

There are instances of churches receiving a revocation letter from the IRS. This is a result of incorrectly applying for a FEIN and then waiting several years to apply for their 501(c)(3) status. All of this can be avoided by correctly applying for the FEIN.

Step 3. Create and adopt bylaws tailored to your church

As you prepare your articles of incorporation or wait for the document to be approved, you will want to create bylaws. 

This document sets the rules for how the organization will be governed. Not only are they required by state law, but they should, if done correctly, be structured in a way that will protect the organization’s religious beliefs and provide clear rules for governance. 

Lawsuits are unpredictable, and legislation is frequently changing, including public accommodation laws that potentially violate the church’s First Amendment rights, such as same-sex marriage laws, transgender laws, and so on.

Keep your bylaws relevant. Your bylaws must change along with new legislation. This document will need to be updated periodically to reflect the current laws. Not doing so can negatively impact the church. 

If you are unsure of your current bylaws or need to create new ones, give us a call at 770-638-3444. Our specialists are ready to help you draft bylaws that will help your church be more secure.

(Recommended reading: “Bylaws Save Florida Church from Lawsuit”)

Step 4. Establish policies and procedures

To provide good infrastructure for your church or ministry, you will need to develop and implement policies and procedures. 

Policies not only help protect the integrity and the vision of the ministry but also help satisfy some of the state and federal requirements.

Policies are documents that help govern day-to-day activities. While bylaws are the fundamental and foundational pieces of your ministry. You need both to have a good foundation. 

Some policies you will want to implement are:

• Accountable reimbursement policy,
• Conflict of interest policy,
• Benevolence policy,
• Indemnification policy,
• Ant-terrorism policy,
• And more.

We have a Policies Suite with 55 customizable policies just for you! Click here to have access to our Policies Suite.

Step 5. Apply for and obtain the 501(c)(3) tax-exempt status

The final step in legally establishing your church or organization is obtaining 501(c)(3) approval from the IRS. 

This is the most time-consuming and labor-intensive process of legally establishing your church or ministry. The IRS estimates anywhere from one hundred to one hundred and fifty hours to complete Form 1023 in its entirety! 

The IRS Form 1023 is twenty-five pages long, and when it is properly filled out, it can be anywhere from eighty to one hundred pages of content for churches, and sixty to seventy pages of content for ministries. 

This is a lot of time and a lot of information that must be completely accurate! 

We know that many people do not have this sort of time available to dedicate to applying for this process. For this reason, we have created our StartRIGHT Service. 

We love to come alongside pastors and leaders of ministries to make sure they have a solid foundation for their organization. 

Call us today at (855) 248-4402 for more information about the StartRIGHT Service.

A very important last note

In addition to everything listed above, some states require extra processes to receive the full benefits of being a church or ministry.  

For example, more than half of the fifty states offer sales tax exemption for churches and other types of nonprofits. However, you have to complete additional filing with the Secretary of State to obtain the exemption. 

Other states require corporations in their state to pay a franchise tax annually. Franchise tax is a corporate tax levied on a corporation to be able to do business in a particular state. 

This being said, some states allow churches and ministries to apply for an exemption from this particular tax. Be sure you do your research on what is required to start a church or a ministry within your state. 

You don’t have to build your ministry alone

We know this can be an overwhelming and daunting process. There are so many details to keep track of, and we definitely don’t want pastors and ministry leaders to have to do it alone. 

Our specialists at StartCHURCH are well-prepared in this field and know what it takes for churches and ministries to thrive and grow. 

For more information on how to start a church or ministry, call us at 877-494-4655, or click the button below to have a specialist call you at your convenience. 

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