Should my Missouri church adopt Chapter 355?

Missouri has two nonprofit corporation statutes. One is at Revised Statues of Missouri Chapter 352, and is called the “Benevolent” or “Pro forma” corporation. The other is located at RSMo. Chapter 355; it is called the “Missouri Nonprofit Corporation Act.”

Chapter 352 is very old; it has been part of Missouri law since before the Civil War. Chapter 355 is fairly new as laws go; it was most recently amended in the late 1990s.

Many people (including some lawyers) assume Chapter 355 is better, because it is newer. If you are already a Chapter 352 corporation, you may wonder if it is better to ‘upgrade’ to the new statute.

Chapter 355 is definitely easier at the beginning. You file a form with the Secretary of State. Starting a Chapter 352 Corporation requires a trip to a local judge, and several filings.

But easier is not always better.  For churches, especially, Chapter 352 might be the better fit for you.

Why? Here are a few reasons:

  1. Chapter 352 is more flexible than Chapter 355. Chapter 355 is built on a Board of Directors model — it assumes there will be one group of people with the final say. It’s the same general idea as the board of Apple Computer, or General Motors. And if you were to start another charity, you probably will operate under the Board model. It’s the way Americans think bout getting things done, for the most part.

But your church probably does not have a board of directors with the final say. I often find churches trying to shoehorn themselves into the legal box. Their documents use all kinds of legal somersaults to approximate the way things work, but ultimately they have to use the Board model. But who is the Board? The Pastors? The Deacons? The Elders? A super-committee of all three? A “board of trustees” or “Finance Committee” disconnected from all the other offices?

This can fall apart when law gives the Board some power that the group’s theology gives someone else. Maybe the Trustees overrule the Congregation’s vote on property, or a super-committee of laymen second-guesses a decision of the Elders.

It can also fall apart when the law says the Board has a responsibility, but they lack the authority to do it. I’ve seen many “Trustees” surprised to learn that they risk criminal penalties if the church staff doesn’t report child sexual abuse correctly. The church is not structured to let them carry out their responsibilities.

So if you care deeply about the way authority is distributed or handled, your church will want to consider, at the very least, whether Chapter 352 allows a better fit.

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