Pt 1: Setting Up the Proper Legal Entity for Churches – Ask Clay Anything

Show Notes

Pastor Craig Groeschel, Pastor T.D. Jakes, Pastor Joyce Meyers and other leading ministries turn to Winters and King for many of their legal answers and during this segment Pastor Brian and Jessi Gibson get to ask Wes Carter a myriad of legal questions.

Legal questions for Wes Carter of

  1. What are the biggest legal holes you typically see with churches?
    1. “I don’t need a corporation as a church”
      1. Not a good idea. If you are sued they will be suing you individually and you do not have the protection of the corporation.
  2. What type of entity should you set up?
    1. Set up the legal entity (Corporation)
    2. Under the IRS rules churches do not have to submit as a 501c3.
      1. As long as you follow the IRS rules of what a church is.
    3. You still have to work under the same rules as a 501c3
  3. In ministries is there a tendency to be more lenient on workers and volunteers?
    1. Yes and  you must take action to protect your church.
    2. Be proactive and have high standards within your organization.
    3. Use security cameras as a deterrent

Business Questions for Z:

  1. What are successful business people looking for in a pastor and a leader and how should they relate to you?
    1. Z – Looking for a genuine friend and is not assuming that he is there to be a power broker. But do not come on too strong and bombard them.
    2. Clay – Treat business people like normal members of your congregation.
      1. Beware of the person who wants to give a lot and then dictate what the sermons will be about.
    3. Wes Carter – Seperate yourself from the tithes being given so you do not accidentally treat people better.
  2. What do you like and not like about a church as a business person?
    1. Wes Carter – When he walked into the congregation there was a homeless person, lawyer, doctor and poorer people all treated equal and worshiping together.
    2. Dr Z – The 3 Things Doctor Z looks for from a church:
      1. A solid Children’s ministry – If the kids enjoy the church then that is where the family will go.
      2. A Powerful Worship Service – You must have a great praise and worship team.
      3. An Inspired Message – The pastor has to have enthusiasm and you have to connect and believe what they are saying.
Business Coach | Ask Clay & Z Anything

Audio Transcription

Attend the world’s best business workshop, led by america’s number one business coach for free by subscribing on itunes and leaving us an objective review. Claim your tickets by emailing, his group that you didn’t and your contact information to cancel at drivetime show.Com. Welcome back to the conversation is the drive time show z on your podcast download, which means that people are listening right now to exclusive content. You cannot find on the radio, z, z, z, z, that the radios break hymen, the podcast is exclusive. They are you fired up during the pie has to be a little different when we do podcast in our radio show, which we turn our radio show in the podcast, with their podcast, also by froggy for brian gibson on the show today he’s not that tricky the pastor of a church that it’s in river city at justin owensboro, it’s called river city church and it was carter his law firm, winters and king or he’s a partner. They represent joel osteen td jakes, joyce meyers 11th top craig rochelle. They represent some of the top pastors on the planet. Pastor has a church over a thousand people and he’s also i. Would you call it co pastoring a flock of a thousand people as well as in amarillo, or how would you describe that? Yes, ride, call interim right now and yes, okay, so your your father-in-law pastor to church in amarillo and he’s had some stroke recently.

He did. He had a mini-stroke, so symptoms came on, but then they’re all gone. So we’re thankful for that, but decompress the business coach all week taking the leadership of the church and the staff is now answering relating to us. So is the church of senior pastors so to two churches. At the same time, yes, sir, that about a thousand people, a piece about a thousand miles. Apart, really really calm, nice people never having issues. Always our old cat ever have any issues. So you got a perfect world. They’re, perfect people, your past drinks, but I want to ask you on behalf of all the pastors who cannot be on the show today you so much, but for the pastors, who couldn’t really sure like what are some questions, that you would ask west carter the attorney, who represent some of the top attorneys in the plant. Where were some questions that you would ask wes cartner? Let’s start with this west a lot of a lot of pastors. They are. They got a heart for people that got the guy, have a heart for the word of god.

They care for their sheep they’re, probably not legal mine’s, a lot of them a lot of them. Probably our business mind your business saturday. What are some of the? What are some of the easy biggest holes you see legally and protecting an entire ministry or a church, because it is it’s something that needs to be protected. It’s valuable to people your valuable to god, one of the most dangerous ones. I see-and you see these kind of wives tales pop up online periodically. Is it i, don’t need a corporation for my church? I? Have a corporation, sole or I’m not going to submit myself to the government authority and those that won the most dangerous things to do, because without the existence of any kind of corporation for your church, then, if I’m going to sue you, my only option is to come to all of you individually. So you’re holding the church’s property in trust is very,, especially used to be on the east coast. There were times in virginia and someone in northeast were churches couldn’t be incorporated in earlier times in our country’s history and so. Mixed, with some bad tax advice in kennedy’s. Failing constitutional business coach argument, that’s one of the most dangerous ones I see is that we just meet together. We don’t have a corporation, we tithe, but we’re not worried about a tax deduction, so we’re just out there doing it, and then someone falls or gets hurts at camp or one of the many things that happened in the church when you’re done with kids and youth usually, and then all the board members all the deacons, the pastor of the pastor’s wife, we just they get they all get sued individually with the court sort it out everyone’s liable. Then, instead of the organization right, there’s a lot, there’s a lot, a lot of risk with that one. It’s a simple!

You know 24-hour process to set up a corporation setup. Your own separate bank account keeps things cleaner, kneader easier to manage, so that would be probably one of the biggest ones I see where I’m at go know:brian is it? Is it helpful to answer your question they’re all that yeah, that that helps guys and cannot can I piggyback one more? That goes well with that. Okay, so so tell me you hear different business coach guys argue on what type of entity to set up what type of legal covering to set up. Must they set up a 501 c 3, or does such a vehicle exist outside of that the great question, so we talked about you set up your corporation, just the legal entities are going to do business under the rule. Is the irs has a special exemption from applying for 501 c3 status for church? So as long as you operate under the irs is criteria. What a church is your automatically exempt without applying, but the important thing to remember is your still subject to all the same rules:you’re paying income tax and none of your people are getting tax deductions, your subject to the exact same rules as every other 501 c 3 and a lot of times. We suggest clients go ahead and apply for 501 c3 status, because when you start doing company donations lot of policy lot of public schools.

Are people won’t give to you if the irs has it determined that you’re a 501, c 3 and you run the risk of the irs-comes in if you’re doing something outside the box a copy shop, church prison ministry, something like that. It says we don’t call. You never did qualifies at church. I have a really crazy, offencive question and z I’m going to kind of filter it through. You come up bring a friend of mine. Is it true story and I won’t tell you what city this is in, but a friend of mine had somebody in his church that he felt like he should have fired. Now it was okay, they had a church and a school okay, those people who are from tulsa. You might guess as to what this is, what it is it to church to have business coach school and that somebody who did some weird stuff. You know when you say no. My office I had somebody else’s, probably but 5 years ago, who followed one of our lady employees in the bathroom and I said:hey, you know what I mean. That’s not the bathroom you go in at 11. Go boom, this guy. That was in ministry. He says you know it was alleged, but we’ve never had any problems with him before and so long story short this church, all the states in our region. This school is no longer a school and it came out that they had a systemic issue of this happens.

I think an outgrowth of a lot of churches is a school, and so the past I know this guy in his heart was i, don’t want to see fire somebody based on an allegation, but it came out that, like this was happening systemically and it’ll be on the news. All the media long story short the schools no more, and there was a teacher that harassed and actually assaulted, minikits and but I seen ministry of out of pastor. That kind of turned a blind eye to anything were quote-unquote judgement. We definitely want to assume every business coach innocent until proven guilty. They want to love everybody they want to see. I would just I mean, have you ever met? People ministries see, that’s almost like they don’t. There was like they’re blind to audit. We can business, you just whack, a guy. You fire me, go hey you’re welcome, but in ministry it seems like some people and ministry give people a hall pass well beyond at the time where you at it’s dangerous there, just like. Well, you know I mean i, can’t have you ever seen this before you heard of these kind of situations, yeah I mean you know within the industry of church I mean.

Obviously, forgiveness is a huge message and it is a powerful message but I think it’s some point. You know you need to run the wolves away from your flock. You have some point. You got a nice warm in ministry and I’ve seen with business owners to you, don’t have to be the ministry to have that mindset of keeping around too long, and now they become a virus. They become a cancer in your organization as a modeling them. Other people are doing their bad habits. In the other saying when I guess, if it’s okay for billy to do that, then it’s okay, I would have before we get to pastor brian’s next question for us is in ministries. Have you not seen a tendency to be more lenient with rule violations than in business, or is it the same or what advice would you have for the pastor’s out there? Who are you know, somebody’s obviously violating a role in this particular case? Was a sexual assault, it was numerous times where the password that I don’t know you definitely can. Count on me night I spend more of my time than I care to even count dealing with these kind of issues with churches cuz. They open it up and business coach litigation and big cases and sell it. You kind of give them grace too much grace to as they did it before. They got on staff they’ve gone through a restoration process. Can you bring them on, but you have to understand you’re bringing them on with a magnification of risk. If we ever do it again and then three is you have people who target churches as easy targets? You have outside people trying to do it in the church and you turn a blind eye thinking the best of people, so it just comes up in so many areas and I like to tell people you have to switch your mind, you’re, stupid perspective and not think about.

You is the pastor of that individual, but think it was a good stewardship issue you are stupid of the church was god’s given you and protect that church. You have to take action. Okay, I just want to share with this. For all this with you for all the pastors out there listening they’re all the people in ministry. You know this. This is obvious, but your standards have to be so much higher than anybody else. Cuz people are always trying to find a problem with churches or I should point out that tupac receive it. So you have to hold yourself to a high business coach standard I’m telling you this the church I’ve gone to for a while one of the things they do is the pastor has said a rule that you know if it. If it goes into the restroom was a kid have to be to adults it go in and they have to set that like next level like he can’t let kids be checked out of the kids church unless there’s actual id provided I’m just save your ministry. Please please please take the go to the nth degree:/ b, /, transparent, because the world is trying to take you down there, trying to prove that you’re not doing things the right way, but pastor brenda would ask you is, do you know anyone add to that or it? What’s your next question, i, don’t know that that is massive and I think cameras.

Security cameras makes so much sense, yeah and they’re, cheap they’re, cheap, cheap and it’s a deterrent and people know it’s there in any would-be predator knows the on the sky does not light ripen know it’s there if its power from false allegations. Yeah covers you so many different ways. So all of that I think there has to be a different standard to when were ministering to sheep as a pastor, I see i, see sheep through one light right, but have a different standard for shepherd’s where they behave. So if there’s a different level of scrutiny, there’s different things I’m expecting and as a shepherd shepherd I believe. I must feed the sheep and I also must kill the wolves other words. You don’t want your shepherds eating the grass, and that said that to her, that’s it that’s a that’s! That’s a problem! The sheet right, it is up to you know she para tasty, meal. Just, going to say as a sidebar sheep as a tasty meal. Also it would be my next question for z for me, if that’s what that’s, what I get for speaking up about the whole church knows that the pastor’s. Do you make it a point? I just look at right attitude like that you can’t get the small enough to look away. We can really wicked willy grace by your type. You know and I want to see a lot of a lot of pastors I think they don’t know how to relate to business coach man, sometimes they’re, intimidated bottom right. Is this guy trying to control me with their money or their power a power, a power broker, so so I got, you, chords, your arms and sometimes i, see you guys handle you your type I was there like that in two different ways, one they run from you. They don’t understand your purpose in the kingdom, correct and, and the other guy glues himself to you just wanted to use you for your recent actions to put a banner up there. I said so. Tell me what you want. What are you looking for in a liter in a church either? One of you can answer this I’d love to receive first, what are you looking for in a pass and in what are some of those attributes?

How would you like up man like that to relate to you? Will never one I’ve had that happen to me both in both categories and I didn’t like either one okay, so I want a guy’s, genuine you just you just just a friend and, and you know, doesn’t assume one way or the other you know doesn’t assume that I’m there to try to wield some kind of you know try to be someone. You know, I need a whole roll reserved for me to every single sunday. That’s just silly! You know a lot of it. Is you just want to be your friend and and treat you like, like your regular guy, you know and, and then I’ve also had a me where they didn’t land on to you and next thing you know you’re like every time we turn around there. You know at your business, hey how’s it going to be pretty hard to take out the bible that that I’m, aware of tithing would believe that pastor brian we’re supposed to give what percentage of your income 10% is is bottom level is a lot of pastors will kind of give the two camps. What’s a the one that panders to the business guy I’ve seen this happen to me before they’re, just they want to hang out with you there, but your buddy. There aren’t I know you you on the dj business in the haircut business in the business coach, okay, we’re going to talk and ended, but they feel like that. Pro rata, if I’m, just if I’m with my income, is a certain amount they feel like if they do that that. All, the sudden I’m going to give more than 10% more than 50. It’s almost like they’re, really really really catering to you and I would just say on behalf of all the business owners. I know we’re going to church, because we know that you’re, our source of you, know more about the bible than we do and we’re looking to use a source of wisdom and that’s what I’m looking for I’m looking for you to be a source of wisdom and pro rata I’m, going to give a percentage of my income, whether I make a little or a lot or a lot lot lot and i. Think a lot of people expect you to know more about.

It’s almost like, because you make more money. That kind of look for you of to have more wisdom about how life works and I’ve. Seen that a lot where a pastor or pulled me aside and ask me some questions where I’m like ask her i, don’t know I’ve had that happen to me. At least I could think of what four times where a business coach password pulled me aside and go hey. This is i, have a question:that’s in the bible and I messed up my book that I know a whole lot of pain, so I would just say this is I would like to be treated like a member of your congregation and just know that pro rata percentage-wise I’m going to give the same as anybody else proportionate to my income in then I would also say this is i. Beware of the business guy who wants to give a lot, but he wants to say your sermon next week should be about this. Oh yeah, because I seen that a lot I mean a lot where the guy who gives a lot he wants to it’s a non-profitable, can I buy, see it’s like hey I’ll, give a lot, but I really do, and it’s not too much to ask I’d like you to do it a sermon on and then it’s like exactly just dictating what you want to talk about.

It I think that’s i, don’t know, I just think. That’s that’s what I am I for one of the first people you hired as a church often is a business pastor. Lot of miniature people aren’t business-minded. They don’t like numbers and I seen pastors that will segregate themselves for the tithing records, so they have no clue who was typing. What and it’s a defense against someone accusing them of favoritism and also help prevent them. Cuz, we’re all human to say, I’m, not going to favor this guy, because I have no idea. What he’s giving I see? That’s cool! That’s cool, move, no pastor! Bryant! What’s another question would be the final question you might have her doctor, dr. Z or mr. West carter. On behalf of all the pastors out there listening or yourself, I think tell me this either one of you, but but what’s sleep from from your perspective, your professional perspective, when you want, when you walk into the church as a whole, not just the leadership himself. But what are you looking for in that ministry in that church? What’s the primary thing that moves you and then what are the primary things that turn you off when you’re like man? This is not cuz i. Don’t just want to hear what you like about us I want to know what you don’t like about us, so we can see it from your urine. First, okay, I got the thunder follows wes’s, more copacetic he’s from my legal perspective, but me as a business coachperson. Yeah I’ll tell you the thing that kept me at the church of it now I walked into the congregation and I know most of pastors in town. So it’s hard for me to find the congregation does represent a black guy, walking the congregation and I’m sitting down, and there is a homeless person to the two seats next to me, and then there is a doctor. I know a lawyer. I know some very poor. People from you can tell you no just from the way they’re dressed and worship starts everybody’s praising together. They were welcome during meal time and not that struck a chord with me. I saw that everyone was treated equal in the congregation come as you are nobody’s trying to avoid you, everybody shaking your hand, loving on you telling you welcome you’re here and not sure cool with me, because I don’t want to be treated. Special I want to go somewhere where everyone’s welcome to come as you are, we all have our own messes and that’s what attracted me to this particular ministering to everyone jersey.

Here we go through things and break it down and I’m, pretty sure you do and children’s ministry you know you’ll see, you’ll go wherever your kids want to go for the most part, you’ll be like my kids are excited by going to church. My kids want to go to church we’re going to that church. True story of river city church, my business coach kids got in the car or in kentucky my kids said:can we come back like every week because I’m really low on this? Is the year olds that you’re not saying this because I unprompted I said guys had you like church, then they go. We want to come back like every week. How many your 5 kids did you take a bullet for all 5 of us I mean we. We want it so profound that is sore. Children is when you’re at when your parent. Now, if you’re, not a parent than that, doesn’t apply to that. So the other two things that are left over our worship. It’s got a great worship, so much great music out there, so many great songs to sing I can only imagine all every sunday. You know the rest of the time. You don’t hit it. You do ok, -, praise and worship as rough as a business guy, because we’re always looking for excellence in everything it would be minus or c+. Do you not see you go I mean you want it. You want it used to write hard to turn a blind eye to bring the great songs out there. There’s so much great music out there there’s so many talented people out there, and so the worship got a rocket in your of course. The message I mean they pastor has to be enthusiasm and you have to believe him and he has to deliver that in a way that you go I connect with him and I connect with what he saying and I left today, smarter than when I got here. You know so I learned something wow, it’s not just a rod. I, learn something and that’s important, I think and so is any feel like you’re grown, you feel like you’re standing right direction, so you had those three things and I mean you know:go go, get bigger, building right now it’s on back of from. Are we come back to her next business coach podcast, your pastor jesse, who is married to pastor bryant? She gets a session inside the dojo mojo. She can ask a dog that she can have dr. Zoellner and mr. West carter. Any question that she possibly has is the ass to see and what part of the addition of the drive time show and as always


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