Has your church decided on a new name to adopt as it moves forward in ministry?
If so, this wasn't an easy decision to reach. Your church committees and governing bodies carefully evaluated the potential benefits and drawbacks of the proposed name, and conducted their due diligence for the trademark. They counted the costs associated with a name change, both tangible (signage, letterhead, other printed materials, and so on) and intangible (risk of loss of goodwill developed through years of use of the previous name). It planned how it will use the new name in conjunction with its media ministries, along with its website and social media applications.
Now it is time to implement the change. But what must be done from the legal perspective to bring the new name change to fruition? What documents and registrations need to be updated? To whom does the name change need to be reported?
Here, we will address these legal and procedural issues related to a church name change.
"Official" or "doing business as"
A threshold question related to implementing a name change is whether the church prefers to (1) change its official organization name, or (2) maintain its official organization name but adopt a "doing business as" name ("DBA") that will be used publicly as the church's new name. (DBAs, as referred to in this article, are variously called trade names, fictitious names, or assumed names in some jurisdictions. While nomenclature varies, and some jurisdictions may make distinctions between two or more types of name registrations, our use of the term DBA is meant to include any state or local registrations that provide authority to publicly use a particular name for an enterprise.)
While it is generally less complicated to register a DBA than to change the official organization name (as discussed further below), maintaining both a DBA and the legal organization name may prove somewhat more onerous in the long term.
Your answers to the following five questions may influence this decision:
1. Is your church confident that it will maintain this new name for the long haul? If not, registering a DBA may be preferable, given that such registration would be easier to "undo" than a change to the official organization name. However, maintaining for the long term both the official organization name and one or more DBAs does add slightly to the church's administrative burden and may result in periodic questions and confusion as to why more than one church name exists.
2. Is the current church name utilized in a significant number of agreements and registrations, such that a change in the official organization name would be administratively, and perhaps legally, onerous? If a church name change needs to be implemented quickly and simply, registering the DBA will generally be the quicker, cheaper, and simpler option in the short term. And the DBA registration could be used as an interim step to a later official organization name change.
3. Are there vehicles, real estate, and other titled assets which will each need to be legally retitled in the new name? If so, the DBA alternative can avoid these legal steps that can be somewhat costly and time consuming.
4. Is the current church name used in a significant number of bequests or other planned gifts, in such a way that a change in the official organization name could cause confusion and potential loss of such gifts? Of course, a church is not necessarily aware of how many wills in which it is named, and could reasonably assume that most, if not all, of any such bequests and planned gifts are from those with a continuing connection with the church. And even if the church is referenced in a will or trust by its former name, the executor, administrator, or trustee, even decades after a name change, should normally be able to determine the entity to which the document is referring through corporate, property, and other records. However, some churches, concerned that a change in official organization name may result in lost bequests and planned gifts, may want to register the new church name as a DBA while maintaining the official organization name.
5. Is the new name available in your jurisdiction as an entity name? If not, the church may have no choice other than to investigate whether the proposed new name may be used and registered as a DBA.
How is a DBA registered?
If your church determines that it makes the most sense to change its name through registration of a DBA, it should first determine the particular process for DBA registration in its jurisdiction. The process of registering a DBA varies from state to state. In some states, it is a state-level registration. In others, it is at the county or city level, and may need to be done in each locality in which the name is used. In some jurisdictions, registration may not be required to use a DBA.
After determining the basic registration requirements and process, the church should confirm that the intended name is available for registration. While some jurisdictions will not permit registration of a DBA that is the same as the name of another registered entity or registered name, other jurisdictions do not place such a limitation on DBA registrations. In addition to requirements for name registrations in your state, the trademark issues discussed in Kenneth Liu's article starting on page 2 must be carefully evaluated. The particular agency administering DBA registrations should be contacted for information about name availability and any other limitations on registered names. Though a DBA can be registered, its use could still infringe a registered trademark, which is a separate legal framework.
The church then needs to ensure that all approvals of church bodies are obtained as required for adoption of a DBA by the church's governing documents or other policies. Depending on the church's governing structure, this may include approvals of committees, one or more church boards (whether elder, deacon session, vestry or other board) and the congregation. If church governing documents and policies are ambiguous about the level of approval required to register a DBA, or if the board or congregational approval is not required by church governing documents or policies for such action, church leadership may determine that it is still prudent to seek such approval. If the church is a member of a denomination, the denomination may also mandate review and approval, or otherwise have criteria for a church name that one of its affiliated local churches is publicly utilizing.
Once all internal approvals are obtained, the church will file the required registration (if any) with the applicable agency. In some jurisdictions, the registration process may be different, depending on whether the church is an incorporated or unincorporated entity. In most cases, registration entails submission of a simple registration form and payment of a fee. In most jurisdictions a DBA may only be registered for a specific period of time, and thus must be periodically renewed. To avoid potential loss of the registration, the church should carefully calendar and monitor registration expiration dates and ensure that renewal registrations are timely filed.
Once a DBA is registered, the church may open a bank account under the registered name (or add the registered DBA name to an existing account) and accept checks made out to that name. While contracts may also be entered into in the DBA name, it is advisable that contracts include both the official organizational name and the DBA to avoid confusion. The church may also consider the advisability of reporting the DBA to agencies in which it has registrations. For instance, if the church has obtained IRS recognition of tax exemption (which churches may obtain, but are not required to) it may wish to report its DBA to the Internal Revenue Service. If the church reports its DBA to the IRS, it is still recommended that the church continue to include its official organization name (as well as the DBA) on charitable contribution acknowledgments so as to reduce the likelihood of confusion if a church donor were to be audited.
Legally changing a name
If your church decides to adopt a new organization name instead of registering it as a DBA, it must consider both the provisions of state law and its own governing documents to determine the steps to legally change the church name. The process for officially changing the church's organization name will differ somewhat depending on whether the church is organized as a corporate or unincorporated entity.
To legally change the organization name of an incorporated church, an amendment to the organizing document of the church must be filed with the applicable state agency that administers corporate filings. But prior to filing the amendment, the church first should confirm that the intended new name is available as a corporate name in the state of incorporation. Most states only permit an entity to be incorporated under a name that is distinguishable from the names of all existing entities (corporations, limited liability companies, limited partnerships, limited liability partnerships, and so on) and trade names registered at the state level.
Checking for name availability is an important step. It can often be done online. This is a critical step because it will help a church understand what, if anything, needs to change about their official new name in order to incorporate it. For example, if the proposed new name is Grace Community Church, it is likely that the church will not be able to officially change its corporate name to that exact name. (In a quick Google search, I gave up counting after 10 pages of U.S. churches named Grace Community Church.) If your new church name is a previously registered name in your state, a location designator (Grace Community Church of Anywhere) or some other word may need to be added to distinguish the name from already registered names.
Note that a few states may exempt churches from the requirement of a distinguishable name, so local law should be consulted. The particular agency administering corporate registrations (generally the secretary of state or state corporation commission) should be contacted for information about name availability. In many jurisdictions, a name may be reserved for a period of time prior to submission of incorporation or amendment documents. If it will be a significant period of time until all church approvals necessary to officially amend the corporate organizing document can be obtained, or if the church otherwise anticipates a period of time for laying groundwork before implementing the new name, filing a name reservation is prudent.
The church then needs to ensure that all approvals from church bodies are obtained as required by the church's governing documents and applicable law in order to amend its organizing document (certificate of incorporation, articles of incorporation, or charter) and other governing document(s) (generally the bylaws or constitution and bylaws) that establish the church name. Depending on a church's governing structure, this may include approvals of committees, a church board (whether elder, deacon session, vestry, or other board), and the congregation. Even if congregational approval is not required by church governing documents, some churches may determine, as noted in discussing the DBA process, that it is prudent to seek such approval. The church denomination of which the local church is a member may also mandate review and approval at the denominational level, or otherwise have criteria for names of its affiliated churches.
Once all internal approvals have been obtained, the church will prepare and file the document required by state law to amend its incorporating document. In most states, the amending document is called an "articles of amendment" or a "certificate of amendment." State law dictates the provisions that are included in the amending document. Typically, along with the text of the amendment (which, in the case of a name change, would be the new church name), the amending document must also include certification of the manner in which the amendment was approved and the date of approval. This must be signed by an authorized representative.
While many states provide templates and instructions for amendments on the websites of their agencies administering corporate registrations, it is recommended that legal counsel review the articles of amendment or certificate of amendment prior to filing, given the unique requirements in each state. Timeframes for state review and approval of amendments varies widely from state to state. Many states provide a process for expedited review (such as 24-hour or same-day service) for an additional fee. Once approval of the applicable state agency has been received, the legal corporate name of the church is changed.
Although amendments to the bylaws of a church do not need to be filed with the state, the church should ensure that all references to the old name in the bylaws are amended in accordance with the procedures provided in the bylaws.
Note that the effective date of the corporate name change will be the date the amending document is filed with the state. A church may wish to time the filing of the amending document to appropriately correspond to the public roll-out timetable of the new name. Roll-out timetable considerations may also affect the timing of internal church approvals, particularly if the name change requires congregational approval.
Many churches are not established as nonprofit corporate entities, but as unincorporated associations. This is particularly true in a few states where churches were not legally permitted to incorporate until fairly recently. If your church is not incorporated, but functions as an unincorporated association, no state filing is required to officially change the organization name in its organizing document. Since an unincorporated association does not submit an organizing document (generally called the constitution or articles of association) with the state to initiate its legal existence, it also need not file with the state to amend its organizing document. Thus, the name change will be effected when all approvals of internal and denominational church bodies are obtained as required by the local church's governing documents and denominational policies.
If the church, as an unincorporated entity, has filed a trade name or other name registration utilizing its former name, such name registration should be amended with the new name. Additionally, if the church has a governing document in addition to its organizing document (such as bylaws in addition to its constitution or articles of association), the document should also be properly amended to reflect the new name.
Who do we tell?
Once the new name has been legally adopted as the church's new organization name, the name change will need to be reported to various agencies, vendors, and constituencies. These may include the following:
If the church has received IRS recognition of tax-exempt status, the name change must be reported to the IRS Exempt Organizations Division. While a name change is normally reported in conjunction with the annual Form 990 required by most tax-exempt organizations, since churches are typically exempt from filing the Form 990, a copy of the name change amendment approved by the state of incorporation (or if unincorporated, a copy of the amendment to the articles of association, constitution, or other organizing document, showing the effective date of the change of name and signed by at least two officers, trustees, or members), and a request for an updated IRS determination reflecting the new name should be sent to the Customer Account Services of the Exempt Organizations Division. The current address is:
Internal Revenue Service
Exempt Organizations Determinations, Room 4024
P.O. Box 2508
Cincinnati, OH 45201
Toll-free number: 877.829.5500
If the church is a subordinate organization under a group exemption, report the name change to the central organization of the group exemption by sending the organization copies of the relevant documents indicated above.
Even if the church has relied on its automatic tax-exempt status and never filed to receive IRS recognition of exemption, if it remits payroll taxes (and thus has an Employer Identification Number (EIN)), it will report the name change to the IRS for payroll tax filing purposes. The name change will also be reported to state tax agencies with which payroll tax returns are filed.
If an incorporated church is qualified to do business in any state other than its state of incorporation (known as a "certificate of authority" or "foreign corporation registration" in most states), an amendment to the church's corporate registration in those states must be filed to report the name change. The requirements for filing such an amendment will need to be researched for each state in which the church is qualified to conduct affairs. Note that only churches that have campuses or other operations in more than one state would normally be registered to do business in a state other than their state of incorporation.
Real property ownership records may need to be amended to reflect the new entity name as well as other documents showing ownership of titled property (such as vehicles). Legal counsel should be consulted regarding necessary changes to deeds and other real and titled property ownership issues.
Notice of the name change may also need to be reported to state or local government agencies handling property tax exemptions, sales and use tax registrations and exemptions, and applicable local business licenses.
The name change should be reported to vendors and other entities with which the church has contractual relationships, including:
Banks and investment companies with which the church has accounts (which will normally require a copy of the document effectuating the name change);
Financial institutions or other parties with which the church has loans;
Lessors or lessees under any lease agreements to which the church is a party;
Utility companies (including telephone and Internet service providers);
Domain name registries;
Credit card companies;
Post office (If the church has a nonprofit mail permit, additional steps will likely be required);
Telephone and website directory listings;
Music and video licensing services (such as CCLI); and,
Other parties with which the church has contractual obligations or does recurring business.
The details regarding internal approval processes, required legal filings, and reporting obligations of a church name change will vary substantially depending on jurisdiction and the specific circumstances of each church. All of these issues should be carefully addressed with input from the church's legal counsel.
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