Church Registration

Before we delve into the subject of church registration, let us consider the benefits of company registration in general as we are aware that there are many business minded people in the Christian fold.

Incorporation involves the legal process of forming a corporation, which is a separate and distinct legal entity from its owners. This means that the corporation as a “Corporate Body” stands on its own and can own assets, enter into contracts, sue and be sued, and engage in other legal activities on its own behalf.

The process involves filing Articles of Incorporation which outlines the company’s purpose, its location, structure, number of shares, stock, within the relevant state or country and paying any applicable fees. In Nigeria, the Body responsible for incorporation of companies is the Corporate Affairs Commission (CAC), and the major regulatory law guiding the whole process is the Company and Allied Matters Act (CAMA) 2020.

Incorporation provides several benefits, such as limited liability protection which separates the personal assets of the owners from those of the business. This means that in the event of a lawsuit or other legal action against the company, the personal assets of the owners cannot be used to satisfy any outstanding debts or liabilities.

In other words, it shields the owners (shareholders) of the corporation from personal liability for the corporation’s debts and liabilities. This means that the corporation, not the individual shareholders, is responsible for paying off any debts or legal judgments against it.

Additionally, incorporation allows for easier access to capital through the sale of stocks or other
securities, increased credibility with customers, suppliers, and lenders, and the ability to attract and retain employees through the provision of stock options, transfer of ownership, and continuity of existence, among others.

Corporations often have greater longevity and can continue to exist even if shareholders or
directors change, that is, with or without their initial Shareholders.

To register a business, the following steps are typically required:

1. Decide where to operate and comply with local laws.

2. Choose a name for the company and conduct a name availability search.

3. Decide on the company’s structure and the number and type of shares to be issued.

4. Select your registered agent; Lawyer, Chartered accountant, among others.

5. Prepare and file the necessary documents, such as the Articles of Incorporation, with the
   appropriate government agency.

6. Obtain any required licenses or permits.

7. Hold an organizational meeting to appoint officers, adopt bylaws, and issue shares.

8. Obtain a tax ID number and register for any necessary taxes and licenses

BENEFITS OF REGISTERING YOUR BUSINESS (COMPANY)

1. Limited Liability. One of the biggest advantages of incorporation is that it offers limited liability
   protection. The corporation is a separate legal entity from its owners, which means that the owners are not personally liable for the debts and obligations of the corporation. In the event that the corporation is sued or goes bankrupt, the personal assets of the owners are generally safe.

2. Perpetual Existence. A corporation has perpetual existence, which means that it can continue to
   exist even after the death of its owners, shareholders, or in the event of transfer of business from
   its initial owners to a new one. This makes it a reliable form of business organization for long-
   term growth and investment.

3. Easier Access to Capital. A corporation can raise capital by issuing shares of stocks or bonds to
   investors, which makes it easier for the business to attract investment and finance growth or to
   obtain funding for expansion or other business activities. This is especially true for publicly-
   traded corporations that can access the capital markets.

4. Tax Benefits. A registered company can benefit from a range of tax advantages, including the
   ability to deduct certain business expenses, lower tax rates on retained earnings, and the ability to defer taxes on certain income. These tax benefits can help businesses save money and reinvest in their operations.

5. Brand Protection. Incorporation can also help protect the company’s brand and intellectual
   property. By registering your business, a business can protect its name and trademarks from being used by others, which can help establish a strong brand identity and reputation.

6. Credibility and Professionalism. Incorporation can give a business a more credible and
   professional image, which can help attract customers, investors, suppliers and employees. This is because incorporation is a formal and legally recognized process that demonstrates a commitment to operating a legitimate and transparent business. It also provides a level of credibility and legitimacy that can be beneficial in business dealings.

7. Transfer of Ownership. Ownership in a corporation can be easily transferred through the sale of
   shares, which can be a desirable feature for investors and shareholders.

THE DOWNSIDE OF REGISTERING YOUR BUSINESS (COMPANY).

1. Increased Complexity. Incorporation involves a myriad of legal paperwork and formalities, such
   as filing articles of incorporation, annual reports, creating bylaws, and holding regular shareholders’ meetings. This can be time-consuming and costly and may require the assistance of lawyers or other professionals. However, failure to comply with these requirements can result in fines and legal consequences.

2. Higher Costs. Setting up a corporation requires paying fees for filing paperwork and obtaining
   licenses. Corporations are required to pay annual fees and may require more extensive accounting and legal services.

3. Limited Control. When a business is incorporated, shareholders may have to elect a Board of
   directors to make decisions on behalf of the company. Therefore, it becomes subject to the
   decisions of a board of directors and shareholders. This can limit the control that the founder or
   original owner has over the business. This can result in a loss of control for individual
   shareholders, particularly if they own a minority share of the company.

4. More Regulations. Corporations are subject to more regulations and oversight than other business structures, such as partnerships or sole proprietorships. This can include filing regular
   reports with the state, holding annual meetings, and complying with other legal and regulatory
   requirements. This can be burdensome and may require additional resources to comply with
   regulations.

5. Increased Liability. While incorporation can provide limited liability protection for the
   company’s owners, it does not necessarily shield them from all legal liability. Shareholders,
   Directors and other Officers of the corporation can still be held personally liable for certain
   actions or debts of the corporation, such as fraud or unpaid taxes. Additionally, if a corporation is
   sued, the owners may be personally responsible for covering legal fees and damages.

6. Lack of Privacy. Incorporation requires businesses to file public documents with the state or to
   make certain information public, which can include financial statements, other corporate
   information and information about owners and shareholders. This can reduce privacy for the
   company and its owners.

7. Double Taxation. Corporations are subject to double taxation, meaning that both the corporation
   and its shareholders are taxed on the same income. This can result in higher tax rates and reduce the amount of money available for distribution to shareholders.

Having examined these points worthy of note, let us delve into the BENEFITS OF CHURCH
REGISTRATION.

By virtue of the provision of Part “C” of the Companies and Allied Matters Act 2020, registration of Churches, NGOs and or any association, are categorized under Incorporated Trustee. Just like there are general steps for registration of businesses above, so are the required details and method of church registration as well.

1. Choose 3 names of the proposed church (which must contain the word “Incorporated Trustees
   of”) and conduct a name availability search.

2. Highlight the aims and objectives of the church (must be for the advancement of the religious
   body and lawful).

3. Decide on the personality (ies) to appointment as Chairman, Trustees and Secretary of the
   Church.

4. Provide names, address, e-mail, phone numbers, scanned valid ID, passport photograph of the
   appointed Chairman, Trustees and Secretary, and specimen of signature.

5. Agree on and arrange the Church’s Constitution.

6. Minutes of the statutory meeting where the above are decided.

7. Apply for registration of the proposed church.

8. Newspaper publications in two (2) newspapers.

9. Application letter

10. Perfect the making of the Common seal of the church

BENEFITS OF CHURCH REGISTRATION

1. Corporate Body. The church, once registered, becomes a corporate body that has the right to sue and be sued through its corporate or appointed Trustees. It becomes an independent body from its Trustees and founder who can only enforce its legal right on its behalf.

2. Capacity to Transact. The church, upon its registration, has the full capacity to do businesses such as buying of properties, opening a corporate account or owning fixed assets and incurring
   liabilities under its common seal.

3. Reputable Branding. A registered Church will be highly valued, recognized and termed stable
   compared to an unregistered church. The church will have a good structure and effective leaders
   by the obligations they render as a result of the registration. They can also partner with other
   organizations, associations, business entities in as much as it is a lawful partnership.

4. License to Conduct Marriages. By virtue of the Marriage Act, a marriage must be celebrated in a place of worship as authorized by the Act, with the Marriage Certificate ascribed from the Marriage Registry. Failure to comply with their provision makes the marriage a mere “Church
   ceremony of blessing” and renders the marriage null and void. Also, such marriage has no legal
   effect and is denied the benefits of a legal marriage under the Marriage Act.

5. Unlimited Lifespan. Once a church is registered, it can outlive the founder, Trustees, and Senior
   Pastors. Its existence only ceases in the case of winding up by the Order of the Court.

THE DOWNSIDE OF REGISTERING A CHURCH

1. Increased complexity and more regulations. Once the church is registered, it has and must
   submit itself to the law, to legal paperwork and formalities, such as filing with CAC and other
   regulatory bodies, annual reports, creating bylaws, and holding regular meetings by the Secretary and Trustees. This can be time-consuming, costly, and may require the assistance of lawyers or other professionals. However, failure to comply with these requirements can result in fines and legal consequences.

2. Increased Liability. A registered Church is a corporate body, and so is/are the Trustee(s)
   appointed to see to the affairs of the Church. Both can be held personally liable for certain actions or debts of the church, such as fraud or unpaid taxes etc. Where a church is sued, the Trustee(s) are personally responsible due to their office herein.

3. Taxation. Only people who draw money from the pocket of the church are liable to pay tax from
   their income – the Pastor(s), the staff, contractors or the church’s profitable business.

4. Limited Flexibility. Registering the Church can affect the flexible nature of decision making that
   could affect the church. This is because the Trustee(s) must act according to the provisions of the law as the structure and governance of the corporation are set by law and by the Church’s constitutions.

THE BIG QUESTIONS ARE:

1. AS A PASTOR, IS IT COMPULSORY THAT I REGISTER MY
   CHURCH/MINISTRY?

2. IS MY CHURCH SUBJECTED TO PAYMENT OF TAX ONCE REGISTERED?

Regarding the question of church/ministry registration, this is not compulsory. However, a church not registered will not enjoy the benefits already discussed, particularly the authorization to conduct marriages; it will not be legally recognized and might not see the test of time.

Concerning tax payments, this has been a fear to many people, even business men and women. Please be informed that the Church on its own is not subjected to the payment of tax!

Payment of tax is only applicable to everyone who receives payment from the account of the church. This could include,for instance, the Pastor(s) who receive a salary, the staff or contractors who are paid for jobs done (such as withholding tax, etc), or any business(es) springing up under the church, among others.

TO REGISTER YOUR MINISTRY, ENSURE YOU ENGAGE A PROFESSIONAL TO AVOID UNNECESSARY ISSUES ON THE REGISTRATION PROCESS.