What is incorporation?
• Incorporation is the creation of an entity (pursuant to the laws of a state) capable of
conducting business and otherwise acting as a legal person. In South Carolina, the
creation of nonprofit corporations is governed by the South Carolina Nonprofit
Corporation Act of 1994 (S.C. Code Ann. §§ 33-31-10, et seq). The South Carolina
Secretary of State is responsible for overseeing nonprofit corporations within the state.
• When a church is not incorporated, it is treated as an unincorporated association.
• Do not confuse the chartering of a local church by the Annual Conference with
incorporation. A church may only be established as a corporation in South Carolina by
filing articles of incorporation with the Secretary of State.
• Along with filing the articles of incorporation, a newly incorporated local church must
fulfill other requirements (e.g., adopt bylaws, transfer the title of property to the
incorporated entity, etc.)
Why incorporate?
• The primary reason for the incorporation of local churches is the same for religious
nonprofit corporations as it is for other corporations: limitation of liability. Churches and
church members are not immune from lawsuits and liability. Charitable immunity has
been abolished in South Carolina since 1981. Although some limitations on liability exist
for churches and church officers under statutory law, state law does not prevent
lawsuits from being filed against churches or church members for occurrences related to
church activities.
• Members of an unincorporated local church are potentially individually liable for the
debts of the local church and could be exposed to liability for the tortious acts
committed by other members or employees of the unincorporated church. (Of course,
church members would still be liable for their own negligence regardless of whether
their church is incorporated.)
Where to begin?
• The Bishop and the Cabinet strongly recommend that any church considering
incorporation retain an attorney.
• The General Council on Finance and Administration’s website provides information
about church incorporation, including:
o An incorporation checklist
o Sample resolutions
o Sample articles of incorporation
o Sample bylaws
• Caution: Although the formats are helpful references, the forms provided are merely
sample forms and do not necessarily comply in all respects with South Carolina law.
• Official forms for non-profit corporations – including a standard format for articles of incorporation can be downloaded from the South Carolina Secretary of State’s website. The Secretary of State also offers online registration of nonprofit corporations.
• Pursuant to The Book of Discipline of The United Methodist Church, charge conference approval (or church local conference approval for churches in a charge consisting
of two or more churches) is required before a local church can incorporate.
• The Discipline also mandates the inclusion of certain provisions in the articles of
incorporation and bylaws (“corporate documents”) of any church corporation.
What else?
Additional considerations for local churches considering incorporation:
(Not intended to be an exhaustive list)
• Upon incorporation, the real and personal property of the unincorporated church must
be conveyed or transferred to the church corporation.
• The church corporation should obtain a new federal tax identification number even
though the unincorporated church may already have one.
• While the Discipline will largely guide the governance of a local church of The United
Methodist Church, a local church corporation in South Carolina still must comply with
the requirements of the South Carolina Nonprofit Corporation Act, which in some
respects contain provisions more restrictive or involved than those of the Discipline
(e.g., certain notice requirements, merger procedures, etc.). Under the Discipline, local
laws control in the event of conflict between the local laws and provisions of the
Discipline regarding formation and operation of church corporations.
• Churches that have day care centers, counseling centers, or other similar ministries or
activities sponsored by their churches should thoughtfully consider separately
incorporating those activities. (Note: If those types of activities are not being operated
or controlled by the church but are being conducted on church property by independent
persons or entities, the church should verify that adequate insurance is being
maintained by the persons or entities.)
• Incorporation does not lessen the need for a church to have a good insurance program
to protect the church against liability and losses. Adequate insurance coverage, even
after incorporation, remains an important aspect of good stewardship, especially in
today’s world where more and more lawsuits are being filed against churches and other
nonprofit institutions.
• When a local church incorporates, the church must appoint a registered agent and
maintain a registered office. The purpose of a registered agent and registered office is to
designate a place for the service of legal process and for the receipt of notices from
governmental entities. An incorporated local church must ensure that the designation of
the registered agent and registered office remain current.
This information is distributed by the Bishop and the Cabinet
of the South Carolina Conference for use by the clergy
of the Annual Conference and by others related to
the Annual Conference and its local churches.
Updated February 2022
Basic Church Administration 