Minnesota Chapter 315 Church Mergers – Minnesota Church Merger

Minnesota Chapter 315 Church Mergers

Minnesota Church Merger

 

Minnesota Chapter 315 Church Mergers - Minnesota Church Merger

Governing Statutes – Minnesota Church Merger

In reviewing or planning a Minnesota Church Merger – specifically Minnesota Chapter 315 church mergers – remember that Minnesota church organizations are generally governed by either Minnesota Chapter 315, or Minnesota Chapter 317A, of the Minnesota Statutes:

  • Minnesota Chapter 315, is a body of quasi-corporate law which loosely governs Minnesota religious corporations, societies, and certain other church related organizations;
  • Minnesota Chapter 317A is a body of comprehensive corporate statutes which have governed all Minnesota non-profit corporations since 1991 – including many churches.

Minnesota Church Merger Provisions – Minnesota Chapter 315 Church Mergers

While both Minnesota Chapter 315 and Minnesota Chapter 317A provide statutory procedures for the merger or consolidation of church corporations, a Minnesota Chapter 315 religious corporation cannot be directly merged or consolidated in Minnesota Chapter 315 church mergers with a Minnesota Chapter 317A non-profit corporation – even if it is a church.

Minnesota Chapter 315 Church Mergers – Minnesota Church Merger

History

Minnesota Chapter 315 is a diverse collection of partially related statutes, many dating from the 19th century.

Individual sections of Minnesota Chapter 315 govern a variety of religious entities, ranging from:

  • those with congregational structures – where the members collectively control the entity,

to

  • those which are hierarchical in nature – where the church leaders are in charge – even if such leaders are based in other states or countries.

However, the provisions of Minnesota Chapter 315 have:

  • no application to nonprofit corporations governed by Minnesota Chapter 317A,

and

  • only limited application to church organizations which were formed under Minnesota Chapter 315, since many of its statutes only apply to certain forms of religious entities.

Relatively few new churches elect to be formed under Minnesota Chapter 315, although it is still an option, and in some cases, may even be desirable.

Most new churches are now formed under Minnesota Chapter 317A.

Religious Societies

Minnesota Chapter 315 frequently uses the term “society” in order to distinguish:

  • the religious body,

from

  • the corporate entity owned and operated by the society.

Definition of “Society”

M.S. Section 315.08 defines the term society by providing as follows:

In this chapter “society” means the religious body constituted in accordance with the principles of the ecclesiastical polity which forms the basis of the corporation designated in this chapter as the

·         church,

·         congregation, or

·         society,

as distinguished from the corporation itself.

However, in practice, it is often hard to distinguish between:

  • the religious body or society,

and

  • the corporate entity owned and operated by the religious body,

and attempts to do so in the church’s Certificate of Incorporation, Constitution, or Bylaws often lead to confusion.

Certificate of Incorporation

Many Minnesota Chapter 315 religious corporations came into existence by the filing of either:

  • a Certificate of Incorporation, or
  • a Certificate of Election of Trustees,

with the county recorder in the county where the church is located.

Contents of Certificate of Incorporation

The “Certificate of Incorporation” or “Certificate of Election of Trustees” would typically:

  • identify the official name of the church,
  • specify the qualifications for trustees – who serve a function similar to corporate directors,
  • identify the initial trustees of the church, and
  • perhaps identify the church synod or denomination with which the Church would be affiliated, or to which it would be subjected.

Minnesota Chapter 315 Church Mergers – Documents

Minnesota Chapter 315 contains a number of different provisions identifying several procedures for the consolidation or merger of two or more religious corporations in Minnesota Chapter 315 church mergers.

One set of consolidation procedures is identified in M.S. Section 315.34 through M.S. Section 315.36.

Consolidation of Religious Corporations

Incorporated Churches – Minnesota Chapter 315 Church Mergers

M.S. Section 315.34 – captioned Consolidation of Religious Corporations – identifies that two or more churches which have been incorporated under the provisions of Minnesota Chapter 315 can consolidate and reorganize into a single entity, by providing in part as follows:

Two or more incorporated

  • churches,
  • congregations, . . . or
  • religious societies, . . .

may consolidate and reorganize as a single

  • church,
  • congregation, . . .or
  • religious society

by complying with the provisions of this chapter for the formation of a

  • church,
  • congregation, . . . or
  • society.

The above provisions identify that in order to accomplish a consolidation of two church corporations formed under Minnesota Chapter 315, essentially a new religious corporation must be formed under that chapter.

Unincorporated Churches – Minnesota Chapter 315 Church Mergers

M.S. Section 315.34 does not provide a procedure whereby unincorporated church societies can consolidate or merge together.

Minnesota Chapter 315 Church Mergers –   Consolidating or Merging Religious Corporations

M.S. Section 315.35 identifies that a two-thirds affirmative vote of the members with voting rights present and voting at a duly called meeting is required in order to consolidate:

  • two or more churches which were “incorporated” under the provisions of Minnesota Chapter 315,
  • into a single religious corporation,

in Minnesota Chapter 315 church mergers, by providing in part as follows:

(i)      Two Thirds Support of Voting Members

Before action is taken under section 315.34, a resolution authorizing consolidation and reorganization must be adopted by at least two-thirds of the members present and voting at a meeting of each of the

  • churches,
  • congregations, . . . or societies

called for that purpose.

(ii)     Notice of Meeting Given On Four Successive “Sabbaths”

M.S. Section 315.35 identifies the notice requirements for a meeting of the members at which a vote is taken to consolidate two or more churches which were “incorporated” under the provisions of Minnesota Chapter 315 into a single religious corporation, by providing in part as follows:

Notice of the time, place, and object of the meeting must be given

  • on four successive Sabbaths on which the society statedly meets for public worship,
  • immediately before the time specified for the meeting.

(iii)     Proof of Notice, Meeting, and Resolution; Affidavit of Officer

M.S. Section 315.35 identifies the evidentiary requirements which must be satisfied in order to consolidate two or more churches which were “incorporated” under the provisions of Minnesota Chapter 315 into a single religious corporation, by providing in part as follows:

Proof of the notice, meeting and resolution

  • may be made by affidavit of one of the officers or members cognizant of the facts and
  • must be recorded with the certificate of incorporation.

As with all matters relating to Minnesota Chapter 315 churches, proof of any notice, meeting, or resolution must be filed with:

  • the office of the county recorder in the Minnesota county where the church is located,

and not with

  • the office of the Minnesota Secretary of State.

Post Merger Meeting – Minnesota Chapter 315 Church Mergers

M.S. Section 315.36 identifies the procedures which are required in order to complete the organization of the new religious corporation which is to be formed under Minnesota Chapter 315, by providing in part as follows:

(i)      Meeting of the United Congregation of the Societies.

After each society has adopted the resolution, notice must be given stating the time and place of the meeting of the united congregation of the societies.

(ii)     Posting of the Notice

The notice must be posted where each society statedly meets for worship at least 15 days before the meeting.

(iii)    Pulpit Notice of the Meeting at the “Usual Sabbath Service”

The minister or another officer of the organization shall give public notice of the meeting at the usual Sabbath service at least one week before the meeting.

(iv)    Name of the New Corporation Resulting From the Merger

At the meeting of the united congregation, held according to the notice, a name must be adopted for the new corporation.

(v)     Form of Organization of the New Corporation

The meeting shall, by a majority vote,

  • determine the form of organization of the new corporation 

and 

  • fix the qualifications for trustees or vestry members and the number, which must be at least three and not more than 12.

(vi)    Election of Trustees of the New Corporation

A new board of trustees, vestry and wardens or chapter and wardens must be elected by a majority of the members present.

(vii)   New Board of Trustees; Three Classes

The board of trustees, vestry or chapter not including wardens must be divided into three classes.

  • One class must be elected and hold office until the next annual meeting of the congregation,
  • one class until its second annual meeting, and
  • one class until its third annual meeting.

After that, the terms of office of the trustees or vestry members must be three years and until their successors are elected and have qualified.

(viii)  Board of Trustees; Vacancies

If a vacancy occurs in the board of trustees, vestry, or chapter, at the next meeting of the congregation, board of trustees, chapter or vestry a successor must be elected to fill the unexpired term.

(ix)    Certificate of Incorporation

After the meeting the chair and secretary shall make a certificate as prescribed by section 315.01, 315.17, or 315.20, as the case may be.

(x)     Place of Recording

The certificate, proof by affidavit of proper notice of the meeting, and the affidavits provided for in section 315.35 must be recorded with the county recorder of the county where the place of worship of the consolidated society is located.

(xi)    Effect of Recording

When it is filed, the societies become merged into a new corporation under the name specified in the certificate.

Powers of the Newly Formed Religious Corporation – Minnesota Chapter 315 Church Mergers

M.S. Section 315.36 identifies the powers, privileges, and liabilities of the newly formed religious corporation, by providing in part as follows:

The new corporation

  • has the rights, powers, and privileges, and
  • is liable for the obligations

of the corporations consolidated.

Property of the New Corporation – Minnesota Chapter 315 Church Mergers

M.S. Section 315.36 identifies that the newly formed religious corporation acquires the property rights of the two merging church corporations, by providing in part as follows:

The property of the original corporation vests in the new corporation.

Effect of Testamentary Instruments – Minnesota Chapter 315 Church Mergers

M.S. Section 315.36 identifies that any testamentary gifts to the two merging church corporations will accrue to the benefit of the newly formed religious corporation, by providing in part as follows:

If a will or other instrument

  • takes effect after the consolidation and
  • names any of the original corporations as a legatee, devisee, or beneficiary of a trust,

the new corporation

  • shall take under the instrument and
  • is entitled to the money, property, and benefits that the original corporation would have received under the instrument,

unless the instrument expressly provides otherwise.

Merger of Same Denomination Religious Corporations; 

– Minnesota Chapter 315 Church Mergers

Property Corporations

M.S. Section 315.365 – captioned Merger of Religious Corporations – identifies that two or more churches of the same denomination which were incorporated under the provisions of Minnesota Chapter 315, can merge or consolidate into a single entity as a Minnesota Church Merger, by providing in part as follows:

Subdivision 1.   Merger.

If two or more dioceses, synods, parishes, churches, congregations, or other religious bodies of the same denomination unite, reunite, merge, or consolidate and if, before doing so,

  • each body has created a corporation under Minnesota law to hold and administer its properties or properties in trust for the benefit of the body or its component parts,

  • these property corporations may merge and consolidate one with another or into a new property corporation organized for similar purposes by the new religious body.

Authority for the property corporation merger and consolidation must first be given at an annual meeting of the new body or at a special meeting called for that purpose in accordance with the constitution, canon law, or other lawful provision for its governance.

Society –  Corporation Distinction

The foregoing provisions identify one situation where a distinction must be made between:

  • the religious body or society,

and

  • the corporate entity owned and operated by the religious body.

Minnesota Chapter 315 Church Mergers – Procedures 

M.S. Section 315.365, Subd. 2 identifies the manner in which a Minnesota Church Merger must be accomplished under Chapter 315, by providing as follows:

Subd. 2.   How merger effected.

To accomplish the merger and consolidation, the property corporations must execute an agreement containing:

(1)     the names of the property corporations who are parties to it;

(2)     the name and location of the principal office of the surviving corporation with which the property corporations are to be merged and consolidated;

(3)     the persons who constitute the governing board of the surviving corporation until their successors are elected and qualified;

(4)     the general purposes of the surviving corporation and the general description of the area to be served by it;

(5)     the date of adoption of the authorization for the merger and consolidation by the meeting of the united, reunited, merged, or consolidated religious body to which the merging or consolidating property corporations pertain; and

(6)     other provisions appropriate for the certificate of incorporation of property corporations of this character formed under Minnesota law.

The agreement

·         must be executed by the corporate officers of each property corporation that is party to it

and

·         must be accompanied by the certificate of the secretary or other recording officer of the new religious body.

The certificate must certify

·         that the body has adopted in accordance with its constitution, canon law, or other general provisions for the governance of its affairs,

·         a resolution authorizing the merger and consolidation.

The agreement must also be accompanied by a certificate of the secretary or other recording officer of each of the property corporations, certifying that the members and governing body of each property corporation have adopted resolutions directing the execution of the agreement.

The agreement, when executed and certified, must be filed for record with the county recorder of the county where the surviving corporation’s principal place of business is to locate.

It must also be recorded with the county recorder of each other county of this state where the principal place of business of any of the property corporations was located according to the property corporation’s certificate of incorporation.

The merger and consolidation takes effect when the agreement and certificates are filed for record with the county recorder.

Continued Corporate Identity – Minnesota Chapter 315 Church Mergers

M.S. Section 315.365, Subd. 3 identifies the legal continuation of the two merging corporations in a Minnesota Church Merger, by providing as follows:

Subd. 3.   Continuation of corporate identities.

When a merger and consolidation takes effect, the corporate identity of each party to it continues in the surviving corporation.

The legal title to assets held or owned by any property corporation that is a party to the merger and consolidation vests in the surviving corporation.

The surviving corporation is entitled to receive gifts, devises, bequests, legacies, or other transfers or assignments of money or property, real, personal, or mixed, made after the merger directly or in trust to or intended for any of the constituent property corporations.

Except as provided in section 501B.31,

·         no properties or assets and no income of properties or assets held or received by a party to the merger and consolidation or by the surviving corporation

·         shall be diverted

·         from the uses and purposes for which they were received and held by the property corporations or

·         from the uses and purposes for which they were expressed and intended.

Continued Certificate of Incorporation – Minnesota Chapter 315 Church Mergers

M.S. Section 315.365, Subd. 4 identifies the continued effectiveness of the certificate of incorporation of the surviving corporation in a Minnesota Church Merger, by providing as follows:

Subd. 4.   Effectiveness of original certificates of incorporation.

Except as otherwise provided in the agreement, the provisions of the certificate of incorporation of the surviving corporation continue in force as to the surviving corporation and corporations merged and consolidated with it.

Effect of Minnesota Chapter 315 Church Mergers on Real Property Tax Exemption

Depending on the County, the completion of a Minnesota Church Merger pursuant to Minnesota Chapter 315 may require the church to reapply for any real property tax exemption.

For more information, see Minnesota Real Property Tax Exemption for Churches.

Summary – Minnesota Religious Corporations;

Minnesota Chapter 315 Church Mergers

Consolidations or Mergers of Minnesota religious corporation churches may be accomplished pursuant to Minnesota Chapter 315.

For additional information on Minnesota Chapter 315, see also Dahlelaw.com

Summary – Minnesota Non-profit Corporations

Consolidations or Mergers of Minnesota non-profit corporation churches may be accomplished pursuant to Minnesota Chapter 317A.

For additional information on Minnesota Chapter 317A, see also Dahlelaw.com

Minnesota Church Merger Attorney 

Since 1992, Attorney Gary C. Dahle has represented a variety of Minnesota churches – Baptist, Evangelical, Lutheran, Pentecostal, Presbyterian, and independent churches, with respect to:

Attorney Gary C. Dahle has represented churches located in the Minnesota cities of Arden Hills, Blaine, Bloomington, Brooklyn Park, Burnsville, Chaska, Corcoran, Coon Rapids, Eden Prairie, Fridley, Glencoe, Minneapolis, Mounds View, Roseville, St. Louis Park, St. Paul and Wyoming

Topics of Interest:

Copyright 2018

Minnesota Church Merger

Gary C. Dahle – Attorney at Law

2704 Mounds View Blvd., Mounds View, MN 55112

Phone:  763-780-8390  Fax: 763-780-1735

[email protected]

Legal Disclaimer

Information provided herein is only for general informational and educational purposes. The laws relating to Minnesota churches and non-profit corporations and a Minnesota Church Merger involve many complex legal issues. If you have a specific legal problem about which you are seeking advice, consult with legal counsel. Gary C. Dahle, Attorney at Law, is licensed to practice law only in the State of Minnesota, and in the State of North Dakota, in the United States of America. Therefore, only those persons interested in matters governed by the laws of the State of Minnesota or the State of North Dakota should consult with, or provide information to, Gary C. Dahle, Attorney at Law, or take note of information provided herein.

Accessing the web site of Gary C. Dahle, Attorney at Law – https://dahlelawchurches.com – may be held to be a request for information. However, the mere act of either providing information to Gary C. Dahle, Attorney at Law, or taking note of information provided on https://dahlelawchurches.com, does not constitute legal advice, or the establishment of an attorney/client relationship. Nothing herein will be deemed to be the practice of law or the provision of legal advice. Clients are accepted by Gary C. Dahle, Attorney at Law, only after preliminary personal communications with him, and subject to mutual agreement on terms of representation.

If you are not a current client of Gary C. Dahle, Attorney at Law, please do not use the e-mail links or forms to communicate confidential information which you wish to be protected by the attorney-client privilege. Please use caution in communicating over the Internet. The Internet is not a secure environment and confidential information sent by e-mail may be at risk. Gary C. Dahle, Attorney at Law, provides the https://dahlelawchurches.com web site and its contents on an “as is” basis, and makes no representations or warranties concerning site content or function, including but not limited to any warranty of accuracy, completeness, or being current.

Related Topics:

For a discussion of Minnesota probate law, see https://dahlelawprobate.com/ and also http://www.dahlelawminnesota.com/ and also https://dahlelaw.com/minnesota-probate/

For information on North Dakota Probate law, see http://www.dahlelawnorthdakota.com/

For information on Minnesota Cemetery Law, see http//:www.dahlelawcemeteries.com

For information on North Dakota Transfer on Death Deeds, see http://northdakotatransferondeathdeeds.com/