A Religious Corporation is a non-stock corporation. As such, the provisions of the Maryland general statutory corporate law will apply to it, unless the provisions of the statute clearly require otherwise. Maryland Code, Corporations & Associations Article § 5-201.
A Religious Corporation is created under Title 5, Subtitle 3 of the Maryland Code, Corporations & Associations Article. This subtitle sets out the means of forming a religious corporation under a “congregational form of church government” contemplated by the statute. Mt. Olive African Methodist Episcopal Church of Fruitland, Inc. v. Board of Incorporators, 348 Md. 299 (1997). However, the subtitle provides particular requirements for the formation of a religious corporation by a congregation of the Roman Catholic Church, the United Methodist Church, the United Presbyterian Church of the United States of America, the Protestant Episcopal Church, Diocese of Maryland, and the Protestant Episcopal Church, Diocese of Easton. The specific provisions relating to each of these denominations are found in Subtitle 3.
The Religious Corporation is formed by filing Articles of Incorporation with the State Department of Assessments and Taxation (§ 5-304). These Articles of Incorporation are also called the “Charter” of the Religious Corporation. The Articles of Incorporation are filed by not less than four (4) Trustees (§ 5-302). The central part of the Articles is the “Plan” of the Church, which is adopted by a majority of the Trustees (§ 5-303). This Plan includes:
- The purpose for which the religious corporation is formed
- The name of the Religious Corporation and of the Church
- The time and manner of election and succession of Trustees
- The exact qualifications of individuals eligible to vote in elections and be elected to office.
The Plan may also include any regulation adopted by the Church (§5-301(c)). The Plan is maintained by the Church in a “Record Book” in which the proceedings of the Religious Corporation are recorded. The Record Book must be available for inspection by the members of the Religious Corporation. There is no case law explaining the detail to which the Record Book must be maintained, and what material must be included in it. In particular, it is not clear the extent to which financial records must be made available to Church members. Maryland law provides for members of a charitable corporation to have access to financial records, and other States have compelled church officers to present financial records for inspection. However, in the absence of express Maryland law and in light of its historical reluctance to interfere with internal church operations, it is not certain the extent to which (if at all) Trustees of the Religious Corporation can be compelled to submit their financial records to inspection by members. It is likely that trustees can be compelled to give an accounting, under the Maryland general law applicable to trustees.
The Articles of Incorporation must also state the address of the principle place of worship, and the name and address of the resident agent.
The Articles of Incorporation should also contain language designed to satisfy the requirements of § 501(c)(3) of the Internal Revenue Code, to ensure that the organization will qualify under that section as a tax-exempt organization. This language is not required by Maryland statutes, but will be required by the Internal Revenue Service upon application for exemption status.
Many Churches include in the Plan and/or the Articles of Incorporation a doctrinal statement, and other matters concerning the religious beliefs on the Church. These matters are superfluous to the legal requirements of the Plan or the Articles of Incorporation, and are best maintained in some other document, which is not subject to the legal requirements of the State. In practice, a statement of religious beliefs in the Charter does not secure doctrinal purity at the Church. To the contrary, the inclusion of doctrinal matters or statement of faith can only be a source of confusion and conflict, by asking secular institutions to oversee spiritual issues. In short, the Charter is a document directed toward Caesar and not toward God. It should render the necessary legal observances to Caesar, and leave the rest to God. The Gospel of Matthew Chapter 22, Verse 21.
Because the property of the religious corporation is controlled by the trustees, and not by the congregation (Hayman v. St. Martin’s Evangelical Lutheran Church, 227 Md. 338 (1962); Jenkins v. New Shiloh Baptist Church, 189 Md. 512 (1948)) it is not uncommon for the Articles of Incorporation to contain some restrictions on the powers of the trustees to sell or encumber that property. Such provisions are valid, if clearly expressed in the Articles. Starr v. Minister & Trustees of Starr Methodist Protestant Church, 112 Md. 171 (1910).
The Plan and the Articles of Incorporation may be amended by action of the majority of the Trustees, who adopt a resolution which declares that the particular amendment is advisable. The amendment may be approved by the affirmative vote of the adult members of the religious corporation, at a meeting called for that purpose, for which at least ten (10) days notice is given (§ 5-308). Upon approval of the amendment, Articles of Amendment are filed with the Department of Assessment and Taxation, pursuant to § 5-309.
The Religious Corporation may, but is not required to, maintain By-laws for its operations. These By-laws should establish the positions and duties of officers, as well as rules governing meetings of the Religious Corporation. Once again, statements of doctrine and other religious convictions are superfluous in these legal documents.