Other Articles By Dick Couser
:: Sexual Harassment–An Issue in any Employment Setting
:: Maintaining Your Corporation
Dissolving the Church
Churches should grow and prosper, not dissolve. But, while the Christian community grows, some individual churches do not. There may come a time when a church needs to close its doors. When that happens, assets need to be distributed and they may be significant, especially if the church owns real estate. What should be done?
In all such cases, counsel should be consulted. Donated funds or real estate may be subject to restrictions that affect what use may be made of the property. In some instances, if the property can no longer be used for the purposes for which it was given, it may need to be returned to the donor or the donor's heirs. Deeds and instruments of grant need to be examined. There may be denominational rules or canon law for denominational churches that require that the property be turned over to the denomination. And the organizational documents of the church typically contain a provision that directs what happens to assets if the church dissolves.
There are several ways of dissolving the church itself. If it was organized under the New Hampshire nonprofit corporation laws, it can be dissolved in any of three ways: (1) it can petition the superior court of the county in which it is located for a decree of dissolution; (2) if the dissolution is by unanimous vote of the members, it can file a record of the vote and a plan for distribution of its assets and satisfaction of its obligations with the Secretary of State; (3) it can let the corporation be legislatively dissolved by failing to file the return due every five years (on the years ending with 0 or 5). If the latter course is taken, the assets will have to be distributed in accordance with the governing documents or other legal requirements.
The dissolved church will continue to exist as a corporation for three years following the dissolution for the purpose of winding up its affairs. If any suits are pending at the end of the three year period, it will continue to exist until 90 days after the final judgment or decree in the suit.
Some churches may exist as unincorporated "religious societies". Usually these are older churches. Such churches become part of a different statutory plan with respect to their dissolution. These statutes presume the church is affiliated with some larger church body. Typically the assets will go to the superior body of the denomination.
In earlier times, some churches may have come into existence through legislative act or by means of incorporating that were allowable then but left no public record. Absent a record of the church's incorporation or organization, one should research the history of its origins to learn what provisions for dissolution or distribution of assets may have been part of the original organization.
When a church is going out of existence, all of the above should be done while there are still members and officers who can act for it.
