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The Incorporation Process

§ 6.02.01
Key point 6-02.01. In many states, churches can incorporate either under the Model Nonprofit Corporation Act or under an alternative statute that was adopted prior to the enactment of the Act. Some alternative statutes involve the filing of a petition with a local court. Often, these alternative statutes contain far less detail than the model Act. Some states have enacted statutes that regulate the incorporation of specific religious organizations.

Although procedures for the incorporation of churches vary from state to state, most states have adopted one or more of the following procedures:

1. MODEL NONPROFIT CORPORATION ACT

In General

The Model Nonprofit Corporation Act, which has been adopted in whole or in part by several states,[32] FLETCHER CYC. CORP. § 2.65, n.2 (perm. ed. 2008). provides a uniform method of incorporation for several kinds of nonprofit organizations, including religious, scientific, educational, charitable, cultural, and benevolent organizations. The procedure consists of the following steps:

  • preparation of duplicate articles of incorporation setting forth the corporation's name, period of duration, address of registered office within the state, name and address of a registered agent, purposes, and names and addresses of the initial board of directors and incorporators;
  • notarized signature of the duplicate articles of incorporation by the incorporators; and
  • submission of the prescribed filing fee and duplicate articles of incorporation to the secretary of state.

The secretary of state reviews the articles of incorporation to ensure compliance with the Act. If the articles of incorporation are satisfactory, the secretary of state endorses both duplicate copies, files one in his or her office, and returns the other along with a certificate of incorporation to the church.[33] MODEL NONPROFIT CORPORATION ACT § 30. The church's corporate existence begins at the moment the certificate of incorporation is issued.[34] Id. at § 31.

After the certificate of incorporation has been issued, the Act specifies that an organizational meeting of the board of directors shall be held at the call of a majority of the incorporators for the purpose of adopting the initial bylaws of the corporation and for such other purposes as may come before the meeting.[35] Id. at § 32.

The incorporators and directors can be the same persons in most states. Many states require at least three directors. Incorporators and directors must have attained a prescribed age and be citizens of the United States. They ordinarily do not have to be citizens of the state in which the church is incorporated.

The Model Nonprofit Corporation Act governs many aspects of a nonprofit corporation's existence. As one court has observed, "if a church or religious group elects to incorporate under the laws of this state, then the courts have the power to consider and require that the corporation thus formed comply with state law concerning such corporations." [36] Lozanoski v. Sarafin, 485 N.E.2d 669, 671 (Ind. App. 1985). See also Board of Trustees v. Richards, 130 N.E.2d 736, 739 (Ohio App. 1954) ("if the church law is repugnant to the specific statutory enactments, the church law must yield to the civil law"). Some of the issues addressed by the Act include

  • meetings of members;
  • notice of meetings;
  • voting;
  • quorum;
  • number and election of directors;
  • vacancies;
  • selection, qualifications, and authority of officers;
  • removal of officers;
  • books and records;
  • merger or consolidation with other organizations;
  • dissolution

In most of these matters, a corporation is bound by the Act's provisions only if it has not provided otherwise in its articles of incorporation or bylaws. In other words, most of the Act's provisions apply "by default." For example, a corporation may stipulate in its bylaws the percentage of members constituting a quorum, but if it fails to do so the Act provides that a quorum consists of ten percent of the voting membership.[37] Id. at § 16. Similarly, the Act provides that directors shall serve for one-year terms unless a corporation's articles of incorporation or bylaws provide otherwise.[38] Id. at § 18.

Key point. One court observed that "in a conflict between the general procedures outlined in the [state nonprofit corporation law] and the specific procedures contained in the church bylaws, we must defer to the church bylaws."[39] Green v. Westgate Apostolic Church, 808 S.W.2d 547 (Tex. App. 1991).
Case studies
  • The Alaska Supreme Court ruled that proxy voting had to be recognized in a church election since the Model Nonprofit Corporation Act required it and the church had not provided otherwise in its articles or bylaws. The court rejected the church's claim that requiring it to recognize proxy votes violated the constitutional guaranty of religious freedom. The court observed that a church could easily avoid the recognition of proxy votes by simply amending its charter or bylaws to expressly prohibit this form of voting. [40] Herning v. Eason, 739 P.2d 167 (Alaska 1987). See also Frankel v. Kissena Jewish Center, 544 N.Y.S.2d 955 (1989), in which a New York court concluded that the state "Not-For-Profit Corporation Law" permits proxy voting unless prohibited by the corporation's charter or bylaws.
  • The Arkansas Supreme Court ruled that the provisions of the state nonprofit corporation law could not be applied to a church if doing so would violate church doctrine. As part of what the court described as a dispute of "a longstanding, ongoing, and heated nature," certain church members sought to obtain various financial records of the church as part of a concerted effort to oust the current church leadership. When church elders rejected the members' request, the members incorporated the church under a state nonprofit corporation law making the "books and records" of a corporation subject to inspection "by any member for any proper purpose at any reasonable time." Church elders continued to reject the members' request for inspection, whereupon the members asked a state court to recognize their legal right to inspection under state corporation law. The elders countered by arguing that application of state corporation law would impermissibly interfere with the religious doctrine and practice of the church, contrary to the constitutional guaranty of religious freedom. Specifically, the elders argued that according to the church's "established doctrine," the New Testament "places within the hands of a select group of elders the sole responsibility for overseeing the affairs of the church," and that this authority is "evidenced by biblical admonitions to the flock to obey and submit to them that have rule over the flock." The Arkansas Supreme Court agreed that "application of our state corporation law would almost certainly impinge upon the doctrine of the church" as described by the elders, and accordingly would violate the constitutional guaranty of religious freedom. The court concluded that if the application of a state law would conflict with the "doctrine, polity, or practice" of a church, then the law cannot be applied to the church without a showing of a "compelling state interest." No such showing was made in this case, the court concluded, and therefore the state law giving members of nonprofit corporations the legal right to inspect corporate records could not be applied to the church. [41] Gipson v. Brown, 749 S.W.2d 297 (Ark. 1988).
  • An Ohio court ruled that a church's board of trustees had been properly ousted and replaced with a new board in a specially-called business meeting that was called in accordance with state nonprofit corporation law. The court noted that "the calling of meetings is regulated by statute," and quoted from the state nonprofit corporation law: "Meetings of voting members may be called by any of the following … (3) The lesser of (a) ten percent of the voting members or (b) twenty-five of such members, unless the articles or the regulations specify for such purpose a smaller or larger proportion or number, but not in excess of fifty per cent of such members." The court noted that the membership meeting had been called by forty-two members, and it concluded that since the church's bylaws did not modify the number of members required to call a special meeting pursuant to the nonprofit corporation law, the bylaws did not supersede the nonprofit corporation law and therefore the special business meeting was properly called because the requirements of the statute were met when forty-two members had called the special meeting. [42] North Dayton First Church of God v. Berger, 2000 WL 1597963 (Ohio App. 2000).

Certain provisions of the Act may not be altered by a corporation. For example, the Act mandates that corporations have a minimum of three directors.[43] Id. at § 18. Although a corporation may require more than three directors, it may not require less. The Act also prohibits corporations from making loans to officers or directors.[44] Id. at § 27. This important topic is discussed in more detail in section F of this chapter.

Annual Report

The Act requires that all nonprofit corporations file an annual report with the secretary of state's office.[45] MODEL NONPROFIT CORPORATION ACT § 81. A few states have amended this provision to require reports less frequently, such as once every two years. The report is filed on a form provided by the secretary of state, and ordinarily sets forth the name of the corporation, the address of the corporation's registered office in the state of incorporation, the name of the registered agent at such address, the names and addresses of the directors and officers, and a brief statement of the nature of the affairs the corporation is actually conducting. A nominal fee must accompany the report.

States that have adopted the Act differ with regard to the penalties imposed upon corporations that fail to file the annual report by the date prescribed. The Act itself imposes a nominal fine ($50) on corporations that fail to comply with the reporting requirement. Many states have followed this provision, but others call for the cancellation of a corporation's certificate of incorporation. Cancellation of a certificate of incorporation has the effect of terminating the existence of a corporation. This is an extraordinary penalty, generally available only after the secretary of state's office has sent the corporation a written notice of the impending cancellation. If a corporation fails to respond to the written notice, the secretary of state issues a certificate of cancellation, which is the legal document terminating both the certificate of incorporation and the corporation's legal existence. Many states permit reinstatement of terminated corporations. Reinstatement generally is available upon the filing of a formal application within a prescribed time. Because of the potentially adverse consequences resulting from a cancellation of a church's corporation charter, church leaders should periodically check with the office of their secretary of state to ensure that the church is a corporation in good standing. Many churches will find that they are not, either because they failed to file an annual return, or because their corporation was created for a specified period of time that has expired.

The Revised Model Nonprofit Corporations Act

In 1987, the American Bar Association's Subcommittee on the Model Nonprofit Corporations Law of the Business Law Section adopted the "Revised Model Nonprofit Corporation Act." The revised Act, which has been adopted by a few states, is based on the Revised Model Business Corporations Act. It likely will be adopted by many states in the years to come. One of the important features of the revised Act is the division of nonprofit corporations into three classifications—(1) public benefit corporations, (2) mutual benefit corporations, and (3) religious corporations.[46] MODEL REVISED NONPROFIT CORPORATION ACT § 2.02(a). Special rules apply to each classification. This is the first recognition of the unique status of religious corporations in a "model" nonprofit corporations law.

Other features of the revised Act include the following:

(1) Members. The definition of "members" is clarified. A corporation is required to compile a listing of eligible voters in advance of each annual or special membership meeting, and this list must be available for inspection. However, the Act specifies that "the articles or bylaws of a religious corporation may limit or abolish the rights of a member … to inspect and copy any corporate record."[47] Id. at § 7.20.
(2) Religious doctrine. The revised Act specifies that "if religious doctrine governing the affairs of a religious corporation is inconsistent with the provisions of this Act on the same subject, the religious doctrine shall control to the extent required by the Constitution of the United States or the constitution of this state or both."[48] Id. at § 1.80. This is the same conclusion reached by the Arkansas Supreme Court in Gipson v. Brown, 749 S.W.2d 297 (Ark. 1988). See note 45, supra, and accompanying text.
(3) Duration. There is a presumption of perpetual duration unless the articles of incorporation specifically provide otherwise.[49] Id. at § 3.02.
(4) Emergency actions of board. The board of directors is empowered to act in an "emergency" though a quorum of the board is not present.[50] Id. at § 3.03. The Act specifies that "[a]n emergency exists for purposes of this section if a quorum of the corporation's directors cannot readily be assembled because of some catastrophic event."
(5) Personal liability. The Act specifies that "a member of a corporation is not, as such, personally liable for the acts, debts, liabilities, or obligations of the corporation."[51] Id. at § 6.12.
(6) Removal of members. Detailed procedures apply to the suspension or expulsion of members, but these procedures do not apply to religious corporations (they apply only to public benefit corporations and mutual benefit corporations).[52] Id. at § 6.21.
(7) Delegates. A corporation "may provide in its articles or bylaws for delegates having some or all of the authority of members."[53] Id. at § 6.40.
(8) Court-ordered meetings. Civil courts are empowered to call meetings of a corporation upon the application of any member if the corporation fails to conduct an annual or special meeting within a prescribed number of days after a specified meeting.[54] Id. at § 7.03. A court also may determine those persons who constitute members for purposes of any such meeting, and may "enter other orders necessary to accomplish the purpose or purposes of the meeting."
(9) Action of members without a meeting. Unless prohibited by the corporate charter or bylaws, members are permitted to act without a meeting if 80 percent or more of the membership agrees to a proposed action in a signed writing. Similarly, members may act by "written ballot" without calling a meeting if such action is not prohibited by the corporate charter or bylaws.[55] Id. at §§ 7.04 and 7.08.
(10) Notice of meetings. The Act specifies that "unless one-third or more of the voting power is present in person or by proxy, the only matters that may be voted upon at an annual or regular meeting of members are those matters that are described in the meeting notice."[56] Id. at § 7.22.
(11) At least three directors. The board of directors must consist of at least three directors.[57] Id. at § 8.03.
(12) Removal of directors. The Act specifies a procedure for removing directors from office, but permits religious corporations to provide otherwise in their charters or bylaws.[58] Id. at §§ 8.08 and 8.10.
(13) Duties of board members. The Act imposes specific "standards of conduct" upon each officer and director of a nonprofit corporation. These include the performance of an officer's or director's official duties "in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the director [or officer] reasonably believes to be in the best interests of the corporation."[59] Id. at §§ 8.30 and 8.42.
(14) Indemnification. The Act contains detailed indemnification rules.[60] Id. at §§ 8.50 through 8.58.
(15) Inspection of records. The Act gives each member the right to inspect (and copy) corporate records "at a reasonable time and location" if a member "gives the corporation written demand at least five business days before the date on which the member wishes to inspect and copy." Corporate records include the articles of incorporation, bylaws, board resolutions, minutes of membership meetings, all written communications to members within the preceding three years, a list of the names and addresses of directors and officers, and the current annual report submitted to the secretary of state. Some limitations apply. Further, the Act provides that "the articles or bylaws of a religious corporation may limit or abolish the right of a member under this section to inspect and copy any corporate record."[61] Id. at §§ 16.01 through 16.05.
(16) Membership list. The Act specifies that "except as provided in the articles or bylaws of a religious corporation, a corporation upon written demand from a member shall furnish that member its latest annual financial statements. …"[62] Id. at § 16.20.

Some churches prefer not to incorporate under the Model Nonprofit Corporation Act (or the Revised Model Nonprofit Corporation Act). This decision ordinarily is based on one or more of four considerations:
First, churches do not want to be bothered with the annual reporting requirements. Although these requirements normally are not burdensome, they must be rigidly followed if a church is to avoid fines, and in some states, the loss of its corporate status.

Second, many churches regard the Model Nonprofit Corporation Act as too restrictive since it regulates virtually every aspect of corporate organization and administration. The Act does specify that most of its provisions are applicable only if a corporation has not provided otherwise in its articles of incorporation or bylaws. However, churches often are unwittingly controlled by the Act through their failure to adopt articles or bylaws dealing with particular aspects of organization and administration that are addressed in the Act. Some churches of course consider this to be an advantage, for it means that there will be authoritative direction on most questions of church administration.

Third, the Act was based largely on the Model Corporation Act for business corporations, and therefore fails to adequately recognize the substantial differences between nonprofit and for-profit enterprises.[63] The Revised Model Nonprofit Corporation Act is based directly on the Revised Model Business Corporation Act, and uses the same numbering system. However, the revised Act in several places attempts to take into account the unique status of religious corporations.

Fourth, some clergy maintain that churches should not incorporate as "nonprofit" organizations since this would suggest that they are "unprofitable" or of no social or spiritual benefit. In this regard, one court has observed that the term not-for-profit refers only to monetary profit and does not include "spiritual profit," and therefore a church properly can be characterized as "not-for-profit" even though it "receives some type of profit from its public works in the form of the feeling of achievement and satisfaction the contributors derive from their good work or the enhancement of the image of the organization and its members in the eyes of the community."[64] United States v. 564.54 Acres of Land, More or Less, 576 F.2d 983, 989 (3rd Cir. 1978). See also People ex rel. Meiresonne v. Arnold, 553 P.2d 79 (Colo. 1976).

Here is one additional point about incorporating under the Model Nonprofit Corporation Act or the Revised Model Nonprofit Corporation Act. Remember that many of the provisions of both laws apply "by default"—meaning that they will apply unless a church has provided otherwise in its articles of incorporation or bylaws. Churches that are incorporated under either of these laws, or that are considering doing so, must carefully review the language of the law to be sure they understand the applicable provisions. Any desired changes must be made in the church's articles or bylaws.

It is important to distinguish between the terms nonprofit and tax-exempt. Nonprofit corporations generally are defined to include any corporation whose income is not distributable to its members, directors, or officers. The fact that an organization incorporates under a state's nonprofit corporation law does not in itself render the corporation exempt from federal, state, or local taxes. Exemption from tax generally is available only to those organizations that have applied for and received recognition of tax-exempt status. In some cases the law recognizes the tax-exempt status of certain nonprofit organizations and waives the necessity of making formal application for recognition of exempt status. For example, "churches, their integrated auxiliaries, and conventions or associations of churches" are deemed to be exempt from federal income tax without the need for filing an application for exemption.[65] I.R.C. § 508(c). In summary, unless a nonprofit corporation applies for and receives recognition of tax-exempt status or is recognized by law to be exempt from tax without the necessity of making formal application, it will not be considered tax-exempt.

Tip. Churches need not be incorporated to be exempt from federal income tax. However, one court has observed that "while not a prerequisite for exemption, a showing that [an organization seeking a property tax exemption as a church] is incorporated as a church or religious association will lend credence to that organization's claim that it is a bona fide church or religious association."[66] Waushara County v. Graf, 480 N.W.2d 16 (Wis. 1992).

2. SPECIAL STATUTES

Several states have adopted statutes that pertain exclusively to the incorporation and administration of specific religious denominations. Such statutes typically apply only to churches affiliated with specified denominations or religions. Some of the states that provide for the incorporation of churches of specified denominations also have general nonprofit corporation laws. Churches generally can elect to incorporate under either the general nonprofit or the special religious corporation law.[67] Bible Presbyterian Church v. Harvey Cedars Bible Conference, 202 A.2d 455 (N.J. 1964); Rector, Church Wardens & Vestrymen v. Committee to Preserve St. Bartholomew's Church, 445 N.Y.S.2d 975 (1982).

Such statutes have been upheld against the claim that they "entangle" the state in religious matters contrary to the "nonestablishment of religion clause" of the First Amendment to the United States Constitution.[68] Smith v. Church of God, 326 F. Supp. 6 (D. Md. 1971). Bennison v. Sharp, 329 N.W.2d 466 (Mich. App. 1982). The Supreme Court has upheld the validity of such statutes,[69] Maryland and Virginia Eldership of Churches of God v. Church of God at Sharpsburg, 396 U.S. 367 (1970). and has referred to them as a permissible way to resolve church property disputes.[70] Jones v. Wolf, 443 U.S. 595 (1979).

3. COURT-APPROVED CORPORATIONS

Some states allow churches to incorporate by submitting articles of incorporation or articles of agreement to a local state court for approval. If the court determines that the church is organized for religious purposes and its objectives are consistent with the laws of the state, a certificate of incorporation is issued, which ordinarily is filed with the local recorder's office and with the secretary of state. This form of incorporation provides a minimum of state control over the operation of church corporations, since ordinarily no annual reporting is required, and the corporation law regulates only a few areas of corporate organization and administration.

4. RELIGIOUS CORPORATION LAWS

Many states have adopted general laws pertaining to the incorporation and administration of religious corporations without any specific reference to particular denominations or religions. Incorporation under such statutes ordinarily is simpler than incorporating under the general nonprofit corporation law. Typically, a church may incorporate under a general religious corporation statute by adopting articles setting forth the church's name, address, purposes, and the names and addresses of church officers and directors, and filing the articles with the county recorder, a court, or the secretary of state.

Churches are free to incorporate under either the Model Nonprofit Corporation Act or a general religious corporation law in those states where both forms of incorporation are available. One court rejected the claim that churches must incorporate under a state's general religious corporation law.[71] Bible Presbyterian Church v. Harvey Cedars Bible Conference, Inc., 202 A.2d 455 (N.J. 1964). Obviously, a church that incorporates under the Model Nonprofit Corporation Act rather than under a general religious corporation law will be governed by the Model Act.

5. CORPORATIONS SOLE

A corporation sole is a type of corporation that allows the incorporation of a religious office, such as the office of bishop. The IRS has described corporations sole as follows:

A corporation sole enables a bona fide religious leader, such as a bishop or other authorized church or other religious official, to incorporate under state law, in his capacity as a religious official. One purpose of the corporation sole is to ensure the continuation of ownership of property dedicated to the benefit of a religious organization which may be held in the name of its chief officer. A corporation sole may own property and enter into contracts as a natural person, but only for the purposes of the religious entity and not for the individual office holder's personal benefit. Title to property that vests in the office holder as a corporation sole passes not to the office holder's heirs, but to the successors to the office by operation of law. A legitimate corporation sole is designed to ensure continuity of ownership of property dedicated to the benefit of a legitimate religious organization.[72] Revenue Ruling 2004-27.

Corporations sole are recognized in only the following 11 states: Alabama, Alaska, Arizona, California, Colorado, Hawaii, Montana, Nevada, Oregon, Washington, and Wyoming. A typical example of a corporation sole statute is section 10002 of the California Corporations Code (enacted in 1878), which provides:

A corporation sole may be formed under this part by the bishop, chief priest, presiding elder, or other presiding officer of any religious denomination, society, or church, for the purpose of administering and managing the affairs, property, and temporalities thereof.

Section 10008 specifies that "every corporation sole has perpetual existence and also has continuity of existence, notwithstanding vacancies in the incumbency thereof."

These sections in the California Corporations Code illustrate the purpose of the corporation sole—to provide for the incorporation of an ecclesiastical office so that it is not affected by changes in the persons who occupy that office. The corporation sole is designed for use by an individual ecclesiastical officer and not by churches or other religious organizations.

Are corporations sole exempt from government laws?

Some persons are promoting the use of corporations sole by churches and church members as a lawful way to avoid all government laws and regulations, including income taxes and payroll taxes. Church leaders are informed that by structuring their church as a corporation sole, they will become an "ecclesiastical" entity beyond the jurisdiction of the government. Individuals are told that by becoming a corporation sole, they can avoid paying income taxes. The promoters, who often use e-mail and the Internet, make it all sound believable with numerous references to legal dictionaries, judges, and ancient cases. Such claims are false and should be ignored. Consider the following two points. First, a church cannot incorporate as a corporation sole. Only the presiding officer of a religious organization can do so. A church officer's decision to incorporate as a corporation sole has no effect on the relationship of the church with the government. Second, not one word in any corporation sole statute suggests that a corporation sole is an "ecclesiastical corporation" no longer subject to the laws or jurisdiction of the government. In fact, most corporation sole statutes clarify that such corporations are subject to all governmental laws and regulations. A good example is the California Corporations Code, which specifies that "the articles of incorporation may state any desired provision for the regulation of the affairs of the corporation in a manner not in conflict with law" (emphasis added).

Similarly, the Oregon corporations sole statute specifies that such corporations differ from other corporations "only in that they shall have no board of directors, need not have officers and shall be managed by a single director who shall be the individual constituting the corporation and its incorporator or the successor of the incorporator." This is hardly a license to avoid compliance with tax or reporting obligations. Nothing in the corporation sole statutes of any state would remotely suggest such a conclusion.

In summary, a church officer who incorporates as a corporation sole will not exempt his or her church from having to withhold taxes from employees' wages, issue Forms W-2 and Forms 1099- MISC, file quarterly Forms 941 with the IRS, or comply with any other law or regulation. Further, an officer who incorporates as a corporation sole will not insulate his or her church from legal liability.

Can individuals avoid taxes by forming a corporation sole?

No. In fact, the IRS has issued a warning to persons who promote or succumb to such scams.[73] See Revenue Ruling 2004-27. The IRS noted that participants in these scams are provided with a state identification number that can be used to open financial accounts. They claim that their income is exempt from federal and state taxation because this income belongs to the corporation sole, a tax-exempt organization. Participants may further claim that because their assets are held by the corporation sole, they are not subject to collection actions for the payment of federal or state income taxes or for the payment of other obligations, such as child support.

The IRS has noted that promoters, including return preparers, are recommending that taxpayers take frivolous positions based on this argument. Some promoters are marketing a package, kit, or other materials that claim to show taxpayers how they can avoid paying income taxes based on this and other meritless arguments. The IRS concluded:

A taxpayer cannot avoid income tax or other financial responsibilities by purporting to be a religious leader and forming a corporation sole for tax avoidance purposes. The claims that such a corporation sole is described in section 501(c)(3) and that assignment of income and transfer of assets to such an entity will exempt an individual from income tax are meritless. Courts repeatedly have rejected similar arguments as frivolous, imposed penalties for making such arguments, and upheld criminal tax evasion convictions against those making or promoting the use of such arguments.

6. "DE FACTO" CORPORATIONS

Even if a church fails to comply with one or more technical requirements of incorporation, it will be considered a de facto corporation if the following three requirements are satisfied:

(1) a special act or general law under which a corporation may lawfully exist, (2) a bona fide attempt to organize under the law and colorable compliance with the statutory requirements, and (3) actual use or exercise of corporate powers in pursuance of such law or attempted organization.[74] Trustees of Peninsular Annual Conference of the Methodist Church, Inc. v. Spencer, 183 A.2d 588, 592 (Del. 1962).

To illustrate, when church trustees failed to sign a certificate of incorporation as required by state law, and the certificate was duly filed with the proper state authorities and remained on file without challenge for over thirty years, a court rejected the contention that the church was not a corporation.[75] Id. Once the de facto status of a corporation is established, it may be attacked only by the state in a quo warranto proceeding.

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