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Legal Liability of a Church Board

A court recently made an important decision.

Wisconsin
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• The Wisconsin Supreme Court addressed the legal liability of church board members in an important decision. A church-sponsored relief agency needed some plumbing work done. Its director negotiated and signed a contract with a plumbing company. The name of the relief agency was mentioned prominently in the contract, as was the fact that the director was signing in his capacity as director of the agency. The agency was unable to pay the plumbing bill, and the plumbing company sued the director personally. The director claimed that he was immune from liability on the grounds that (1) a director of an incorporated organization is immune from personal liability for his acts on behalf of the corporation, and (2) directors of nonprofit organizations are immune by law (in Wisconsin as well as in most other states) from liability for their actions on behalf of their corporation. The state ...

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Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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  • March 2, 1992

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