Pennsylvania

Laws Regarding Nonprofit Corporations

Congregations as Nonprofit Corporations

Every congregation in the ELCA is incorporated, meaning they are legal corporations in their respective state. As corporations, congregations in Pennsylvania are governed by Title 15. Corporations and Unincorporated Associations of the Pennsylvania Consolidated Statutes. Specifically, Part II. Corporations, Subpart C. Nonprofit Corporations, Articles A and B, which includes:

Chapter 51.
General Provisions
Chapter 53.
Incorporation
A.
Incorporation Generally
B.
Special Procedures Applicable to Certain Corporations
C.
Revival
Chapter 55.
Corporate Powers, Duties and Safeguards
A.
General Provisions
B.
Financial Matters
C.
Common Trust Funds
Chapter 57.
Officers, Directors and Members
A.
Notice and Meetings Generally
B.
Fiduciary Duty
C.
Directors, Officers and Members of An Other Body
D.
Indemnification
E.
Members
F.
Derivative Actions
G.
Judicial Supervision of Corporate Action
Chapter 59.
Amendments, Sale of Assets and Dissolution

Concerns Throughout Governing Documents

Constitutions are Bylaws

In Pennsylvania, nonprofit corporations are required to have two things:

  1. Incorporation Documents (Articles of Incorporation or a Charter)
  2. Bylaws

For legal purposes, ELCA constitutions serve as bylaws. Whenever Pennsylvania law refers to "bylaws", it is describing a congregation's constitution, not their bylaws.

The Commonwealth of Pennsylvania

Pennsylvania is, constitutionally, a commonwealth. In legal practice, Pennsylvania is refered to either as "the Commonwealth of Pennsylvania" or "the State". Pennsylvania is never called "the State of Pennsylvania", which is how the Model Constitution refers to states because that's the norm everywhere else. Congregations in Pennsylvania will need to adjust their constitutions accordingly.

Articles of Incorporation

Incorporation documents in Pennsylvania have become rather simple. 15 Pa.C.S. § 5306. outlines the basics a nonprofit needs to include. All of these items are addressed in Pennsylvania incorporation forms. With rare exception, the only thing that would need to be added to these forms is a statement that the constitution serves as bylaws for legal purposes.

According to 15 Pa.C.S. § 5110., any congregation that has updated its incorporation documents since 1973 needs to submit the names of the corporate officers annually.

Example Articles of Incorporation

The following example is basically a copy of Pennsylvania's Articles of Incorporation form for new nonprofit corporations. Following that form, this example includes all items required in Articles of Incorporation by state law, plus a statement for the ELCA Articles of Incorporation specifiying that the Constitution serves as bylaws for legal purposes.

  1. The name of the corporation is: Eagles Evangelical Lutheran Church in Doylestown, PA
  2. The address of this corporation's current registered office in this Commonwealth is: 1600 Pennsylvania Ave., Doylestown, PA 18032 Bucks County
  3. This corporation is incorporated under the Nonprofit Corporation Law of 1988 for the following purpose or purposes: For religious and charitable purposes in accordance with the Constitution, Bylaws, and Continuing Resolutions of the Evangelical Lutheran Church in America (or its legal successor).
  4. The corporation does not contemplate pecuniary gain or profit, incidental or otherwise.
  5. The corporation is organized on a nonstock basis.
  6. The corporation shall have members.
  7. For purposes of the laws of the Commonwealth of Pennsylvania, the corporation's Constitution shall be treated as the bylaws of this corporation.

Common Concerns by Constitutional Provision

Chapter 4. Statement of Purpose

*C4.03.

Pennsylvania is a "license to carry" state, as defined in 18 Pa.C.S. § 6106. Licensed individuals are permitted to bring weapons into congregations. Congregations (other than those with schools on the premises) are not given any special legal protections.

However, congregations have the power to prohibit weapons, including legally registered firearms, on their premises. Such provisions would not stop licensed persons from bringing concealed weapons on the premises, but would give the congregation authority to inform the individual that they are trespassing, under 18 Pa.C.S. § 3503., and, if they do not leave voluntarily, have them removed for trespassing.

Congregations with schools on the premises can cite 18 Pa.C.S. § 912. Possession of weapon on school property in support of this provision.

Chapter 9. Rostered Minister

*C9.04. & *C9.24.

All employees and volunteers who have direct contact with children are required to have background checks under 23 Pa.C.S. § 6344. and 23 Pa.C.S. § 6344.2.. The clearance requirements are slightly different for employees and volunteers, and must be renewed every 60 months. Clearances

All pastors and some deacons are mandatory reporters according to 23 Pa.C.S. § 6311.. However, there is an exception protecting confidential communications with pastors to the same level and legally-binding restrictions as attorney-client privilege under 23 Pa.C.S. § 6311.1. and 42 Pa.C.S. § 5943.

As mandatory reporters, rostered ministers in Pennsylvania should take mandatory reporter training. Training Options A good rule of thumb might be to require the same amount required of funeral directors, which is 3 hours of initial training and 2 hours biennially thereafter.

Chapter 10. Congregation Meeting

Make sure provisions in this chapter are aligned with Chapter 57., Subchapters A and E.

15 Pa.C.S. § 5709. says the president is the presiding officer unless otherwise specified. If the congregation wants to deem someone else the presiding officer (e.g. the pastor), a provision should be included in this chapter to that effect.

C10.01.

If the congregation has more than one regular meeting per year, 15 Pa.C.S. § 5755. implies that the "annual meeting" is defined as the meeting at which the voting members of the Congregation Council are elected.

15 Pa.C.S. § 5755. also specifies what happens in cases of postponement, unless otherwise stipulated by the congregation.

C10.03.

15 Pa.C.S. § 5702. and 15 Pa.C.S. § 5704. specifies how notice of congregational meetings may be made.

C10.04.

If quorum is not specified here, 15 Pa.C.S. § 5756. defines quorum as a majority of the voting membership.

Unless otherwise specified in the congregation's Constitution, 15 Pa.C.S. § 5763. describes how to determine who is entitled to vote at meetings.

C10.05.

Though not recommended by the Model Constitution, 15 Pa.C.S. § 5759. specifies how proxy voting may occur.

C10.08.

15 Pa.C.S. § 5708. provides means for being present via electronic means.

Chapter 11. Officers

Make sure provisions in this chapter are aligned with Chapter 57., Subchapter C.

C11.01.

Congregations are required to have a president, secretary, and treasurer. Officers must be of full age (18+). A person may hold multiple offices. 15 Pa.C.S. § 5732.

Congregations may have a corporation serve as their treasurer. 15 Pa.C.S. § 5732.

Chapter 12. Congregation Council

Make sure provisions in this chapter are aligned with 15 Pa. Chapter 57., Subchapters B and C.

C12.01.

Pennsylvania requires all board members to be of full age (18+). The law does not even make room for youth to serve in an advisory position (voice but not vote). 15 Pa.C.S. § 5722.

C12.05.

Pennsylvania uses the term "board of directors" to refer to the governing board, not trustees. 15 Pa.C.S. Chapter 57.

C12.08.

See the information for *C9.04. above for details concerning background checks and mandatory reporters.

C12.09.

Pennsylvania requires an annual report. 15 Pa.C.S. § 5554.

Pennsylvania requires a different annual report be submitted to the State each year. 15 Pa.C.S. § 5110.

Chapter 19. Indemnification

Pennsylvania allows congregations to indemnify anyone, whether or not provisions of indemnification are present, but the congregation may put restrictions on indemnification. 15 Pa.C.S. Chapter 57. Subchapter D.

This is also the place to put a limitation of liability clause for Congregation Council members. 15 Pa.C.S. § 5713.