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Do Your Church’s Governing Documents Allow Virtual Business Meetings?
Answering this crucial question can help legally validate decisions made during the coronavirus outbreak—and beyond.
Member, Board
Authority
Key point 6-09.02. Church members have such legal authority as is vested in them by
Contract Liability
Key point 6-07.02. Church board members may be personally liable for contracts they sign if
Loans to Directors
Key point 6-07.10. Church board members may be personally liable, under state nonprofit corporation law,
Exceeding the Authority of the Board
Key point 6-07.09. Church board members may be personally liable for actions they take that
Willful Failure to Withhold Taxes
Key point 6-07.08. Church board members who have authority to sign checks or make financial
Wrongful Discharge of an Employee
Key point 6-07.07. Church board members may be personally liable if they participate in a
Securities Law
Key point 6-07.06. Federal and state securities laws make board members personally liable for acts
Violation of Trust Terms
Key point 6-07.05. Church board members may be personally liable for diverting designated funds or
Breach of the Fiduciary Duty of Loyalty
Key point 6-07.04. Church board members have a fiduciary duty of loyalty to their church,
Breach of the Fiduciary Duty of Care
Key point 6-07.03. Church board members have a fiduciary duty to use reasonable care in
Election or Appointment
Key point 6-06.01. Churches select their officers and directors in various ways. For example, it
Authority
Key point 6-06.02. Officers and directors must be legally authorized to act on behalf of
Meetings
Key point 6-06.03. Church boards generally can act only in a meeting that is duly
Removal
Key point 6-06.04. Church officers and directors can be removed from office in the manner
Tort Liability
Key point 6-07.01. Church board members may be personally liable for their own torts (conduct
Officers, Directors, and Trustees—Personal Liability
Traditionally, the officers and directors of nonprofit corporations performed their duties with little if any
Officers, Directors, and Trustees—In General
Churches and religious organizations conduct their temporal and spiritual affairs through individuals. State laws generally
Immunity Statutes
Key point 6-08. State and federal laws provide limited immunity to uncompensated officers and directors
Pastor’s Breach of Contract Lawsuit Against Board Members Dismissed by Court
The court concluded that church board members are not personally liable for breach of contract, since "whenever a corporation makes a contract, it is the contract of the legal entity … and not the contract of the individual members."