2) Apply for Employer Identification Number (EIN).
This is like a social security number for the church and is used for all filings with the IRS. This number is required for all following tasks. The application is filed online.
4) OPTIONAL Prepare Paperwork for Obtaining 501(c)(3) Status with the IRS.
This will get the church official nonprofit status from the IRS. It typically takes 4-6 months to receive the approval letter from the IRS. You are recommended to use a legal service who has experience with this. This is NOT required in order to receive tax-deductible donations. In fact as part of the Assemblies of God, you can operate under the nonprofit status of the AG. You can receive a proof document from the General Council. However, some churches prefer to have their own nonprofit corporation.
5) Obtain Insurance Coverages and Implement Policies Needed for Liability, Property, etc.
This step ensures that you are legally covered. It is important for a Parent Church to review their policy if they add a PAC. Here is a guide to help walk through this:
7) OPTIONAL Apply for a Sales Tax Permit with the State of Texas.
Most businesses in Texas have a Sales Tax Permit, although this is not normaly required of a church.. Typically, the church will not be responsible for collecting sales tax, but there are a few cases where tax must be collected and paid. This document may help:
As you prepare to plant, get your personal finances in order. Eliminate your debt. Most church planters are bi-vocational for at least the first couple of years of the plant. Look for bi-vocational opportunities that will financially support you while you begin the church, yet will give you some flexibility to also do your ministry.
Here is a resource that might help as you think about bi-vocational ministry.
There is also an online assessment available here.
Once the decision has been made to plant a new church, there are a few important legal and business items to be done before officially starting.
1) File Certificate of Formation with the State of Texas ($25 filing fee).
This gets the church incorporated with the state as a nonprofit corporation and allows people to make tax-deductible donations. Usually takes two weeks from the date of filing to complete the process.
3) Open Bank Accounts.
Once you are incorporated and have the EIN, you can open bank accounts. Two people should be the check signers, one of whom should be the person who will be Treasurer. These people will need to be present at the account opening. With the names, addresses, dates of birth, SSN, drivers license numbers, and drivers license expiration date for each person the paperwork can be prepared in advance.
Background checks will need to be performed on all staff and any ministry workers who work with children, students, or finances. Also consider that storing equipment in trailers could raise the cost of insurance versus storing in a storage facility.
6) Apply for Sales Tax Exemption.
Allows the church to purchase items without having to pay sales tax. It usually takes 3 weeks to receive this approval and it cannot be obtained until public services have started.
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