How to Stay in Good Standing With the State

Make sure you file this state report to keep your church’s status from being suspended.

Pastor Carlos looked around his desk. Under a disheveled pile of forms, envelopes, photos and receipts, he found an inconspicuous looking postcard from the state that said something about a penalty and suspension.

Suspension?!

Pastor Carlos recalled the moment he responded to the call of ministry. But the call to administrative work? When did he respond to that? When was administration added to his list of responsibilities? And who thought he was qualified because obviously, he wasn’t. Now his church was about to be suspended by the state. How could something like this happen?

Like Carlos, many ministers often don’t realize that saying yes to ministry is also saying yes to the administrative work that comes with running a ministry. But this side of ministry isn’t one that is often discussed, or even acknowledged.

Below are three important actions to take to keep your ministry up to date and in good standing with the state.

1. Determine reporting requirements in your state. Most states require organizations to file a state report periodically. Some states, like Florida and Georgia, require the report every year. Other states, like California for example, require this report every two years, based on incorporation date.

When a church or ministry incorporates, it must perform its annual corporate maintenance. Whether it’s preparing annual minutes or filing a state report, the law in most states requires that a report be sent to the secretary of state.

The secretary of state will have information regarding whether or not your corporation is required to complete any reports. Some states, like Connecticut and New Jersey, will require all non-church entities to file an annual report, while churches are exempt from any filing requirements.

2. Find the required information. State reports are designed to update board member names and addresses.

An organization may change board members as often as needed. Your annual report to your secretary of state is an excellent time to update changes to the board of directors. Typically, you are not required to update the state every time there is a change to the board of directors. In most cases, it is perfectly fine to wait until the state report is due to update board member information.

Most states have different names for corporate information reports. Maryland calls it the Personal Property Return, while California refers to it as a Statement of Information (SI-100). Florida and Georgia call it an annual report, while Texas calls it the periodic report.

Most of the information required for this report is the same: full legal names, residential addresses of the board members, and mailing and physical addresses.

Some states, like Florida, will require the names, addresses and titles of all board members. California, on the other hand, will only require the names and addresses of the president, secretary and treasurer.

3. Find the filing deadline and fees. Some states have a standard deadline. For example, Florida’s deadline for filing is May 1, and Maryland’s deadline is April 15. There are other states in which the filing deadline is different for each corporation. In Colorado, for example, all corporations within the state are required to file their annual report at the end of the anniversary month of the corporation’s incorporation date. In California, corporations are required to file their report by the end of their anniversary month every two years.

Once you determine whether or not your state requires an information report, you will also need to know what method of filing is required. For example, reports are mailed to the secretary of state in Arizona, Illinois and Nevada. Colorado and Pennsylvania require you to submit your report online.

Most states have a flat filing fee, provided the report is filed on time. Some states penalize late filings with an additional fee.

Too Little, Too Late?

What happens if you’re taking over a church and you’ve just discovered that your organization has fallen into an inactive, dissolved or suspended status?

When a corporation is inactive, suspended or administratively dissolved, it loses its corporate existence and places all of its assets at risk. Naturally, the next question is, “What do we do about this?”

Luckily, for the most part, most states have a pretty simple process to reinstate the corporate status. In most cases, the state has a form that you can file to get the corporation back into an active status. Most states will also have a penalty fee that will need to be paid to the state when reinstating an organization.

First posted on StartChurch.com. Used by permission.