Legal Essentials

Constitution & Bylaws

The constitution and bylaws are important legal documents that outline a church’s identity, purpose, and decision-making structure. Ideally, these documents should allow flexibility while protecting the church in times of transition or conflict. Most new Covenant Churches adopt a Leadership Team form of governance based on this template (Link MWC 2020 LT below). For conversation regarding your church's Constitution and Bylaws, contact the MWC team.

 

Corporate Status

Your church should be legally incorporated with the State as either a Non-profit or a Religious Corporation. Maintaining corporate status is typically required for tax-exempt status under the Covenant’s 501c3 exclusion. For more information or resources on incorporation, contact the MWC team.

Membership Roster

Maintaining a current roster of active “members” (or whatever name is used for decision-makers) is important, and becomes exceptionally important during times of transition, conflict, or when a church is facing closure. The membership roster should be reviewed annually with a process for removing inactive members. For best-practices around membership please contact the MWC team.

 

Banking/Financial Accounts

Good systems around church finances protect those who handle money, protect the church from embezzlement, and protect the trust of those who give generously to the mission. Here are some basic best-practices for church financial systems:

- Offerings given at a church gathering should be counted and recorded on the premises by two unrelated persons

- An offering deposit should be recorded and deposited in the bank as soon as possible (using a bank’s drop box if needed)

- While pastors should be aware of a churches finances, they should not physically handle the church’s money (for their own protection)

- The person(s) authorized to spend money should be different than the persons authorized to count and deposit money

- A ministry expense policy should be in place before a person is authorized to be reimbursed for ministry expenses

- Reimbursement for ministry expenses must include receipts as well as item, cost, purpose, and date

- A reconciled financial report including receipts, expenses, and fund balances should be submitted to church leaders each month