What is Corporation Sole?

By Glen Stoll, Director and General Counsel of Remedies at Law

September 4, 1998

The first known Corporation Sole was established by the Church of England in the year 1448. At that
point in history the Church of England had not broken its ties with the Church of Rome. The King of
England had not yet been dubbed "the Defender of the Faith," and Martin Luther had not posted his 95
Theses on the door of the Castle church at Wittenberg.

More than 200 years earlier King John granted that great charter, the Magna Charta, containing
principles upon which the English judicial system is based. It established the rule of English common
law which provided due process for any "freeman. . . by the lawful judgment of his peers, or by the law of
the land." Equal protection was acknowledged by stating, "We will sell to no man, we will not deny to
any man, either justice or right."

But as the state assumed the authority of the church, force was used to compel matters of religious
conscience. Without the support of the state, the church was left to depend upon the power of reason
and belief. Ecclesiastical Law was referred to as the "Canons of the Church" in order to avoid the use of
the word "law." The ownership of real property was eventually held by the church, apart from the control
of the state, through the establishment of a Corporation Sole.

An unincorporated church ministry, such as a local mission or family assembly, is the only authority
that may grant a charter for the creation of a Corporation Sole. The Articles of Incorporation and Charter
must be registered with the church before notice of its existence can be given. A filing with the
Secretary of State or county recorder provides notice to the public at large and to the state in general
that a given Corporation Sole is the exclusive overseer of the unincorporated ministry that created it.

Just as there is only one office, there can be only one office holder at any given point in time. Thus, the
word "sole" meaning singular. That single office is incorporated into the body of Christ to serve the
unincorporated ministry. The Corporation Sole is historically Christian in its function and structure and is
exempt from federal, state or local license or tax by its very nature.

THE CORPORATION SOLE THE OVERSEER THE MINISTRY

The King of England The King England
The Bishop of the Church of
The Bishop The Church of Rome
Rome
The Office of the President of the
The Church of Jesus Christ of
Church of Jesus Christ of Later- The Office of the President
Latter-day Saints
day Saints

The following are definitions from Black's Law Dictionary (6th Edition):

The Church is the religious society founded and established by Jesus Christ, to receive, preserve, and
propagate His doctrines and ordinances. A Church is a body or community of Christians, united under
one form of government by the profession of the same faith and the observance of the same ritual and
ceremonies. A Mission is an establishment of churches, schools and relief depots through which are
taught the principles of Christianity, the afflicted cared for, and the needy supplied.

Corporation Sole
An Introduction
To understand the Corporation Sole, one must understand how a
"church", as an entity, is protected by the Constitution for the United
States and the U.S. code.

In Title 26 of the United States Code (USC) and Income Tax Regulation
5 - June 26, 1977, edition published by Commerce Clearing House,
Section 1.513-2(ii) vol. 1, page 33, 471-42, and in The Law of Tax
Exempt Organizations by Bruce Hopkins, published by Lerner Law Book
Co., 1977 (page 107), it states the following:

The term "church" includes a religious order to a religious organization

if such order or organization is:

(a) an integral part of a church;

(b) is engaged in carrying out the functions of a church. whether as a

civil law corporation or otherwise. (note "or otherwise", you do not have
to incorporate and thus become a creature of the state.)

However, the option does remain for the church to incorporate if it

desires. There are both advantages and disadvantages to both sides of
this question. One item of interest is the position taken by the State on
the rights on incorporated entities. Official IRS Audit Guide, Section
242.31, addressing corporation books and records it states:

The privilege against self incrimination under the Fifth Amendment does
not apply to corporations.

The theory for this is that the State, having created the corporation,
has reserved the power to inquire into its activities. Now, if we truly
subscribe to the doctrine of "separation of church and state", we should
give this matter our full attention. If we incorporate, we give up the
Right and become controlled, at least to a degree, by the State. If we
remain Unincorporated (as one who is not a 14th Amendment citizen),
we retain all of our Rights under the Bill of Rights, (i.e., the first ten
amendments to the Constitution for the united States of America). We
elect to remain unincorporated.
In summary, under the previous stated regulation (1.511-2(ii)), a
"church is an organization the 'duties' of which include the ministration
or sacerdotal, (i.e. priestly) functions and the practices of a particular
religious body. A Church may also include a religious order or other
organizations which is an 'integral part' of a church and is engaged in
carrying out functions of a church."

The 8th US District Court said in a decision in 1974:

"Neither this Court, nor any branch of this Government, will consider
the merits of fallacies of religion, nor will the Court compare the
beliefs, dogmas, and practices of a newly organized religion with those
of an older, more established religion, nor will the Court praise or
condemn a religion, however excellent or fanatical or preposterous it
may seem. Were the Court to do so, it would impinge upon guarantees
of the First Amendment" [See "Law of tax and Exempt Organizations: by
Bruce Hopkins, published by Learner Book Co. 1977, pg. 110, in your
local law library] The Universal Life Church vs. United States, 372
F.Supp. 770,776 (E.D. Cal 1974)

From the above, we can at least say this.

"Under the Constitution for the United States of America, we as citizens

enjoy the right of freedom from religion, that is, state defined religion."
Abington School District vs. Schempp 374 U.S. 203 1963

From these decisions we may conclude that any claim to church status
cannot be subjected to evaluative criteria or government standards, as
such action would tend to prescribe the form and content of religious
beliefs and practices. Also, whatsoever rights, privileges and
exemptions or immunities are granted to any church, and/or religion,
are also and must on the same basis and to the same extent, be
granted to all churches and/or religions

Religious Freedom - A Natural

Right
The first Amendment of the united States Constitution reads as follows;

"Congress shall make no law respecting an establishment of religion, or

prohibiting the free exercise thereof; or abridging the freedom of
speech, or of the press; or the right of the people peaceably to
assemble, and to petition the government for a redress of grievance."

The Fourteenth Amendment, Section 1 of the United States

Constitution, reads as follows:

"All persons born or naturalized in the United States, and subject to the
jurisdiction thereof, are citizens of the United States and of the state
wherein they reside. No state shall make or enforce an law which shall
abridge the privileges or immunities of citizens of the United States;
nor shall any state deprive any person of life, liberty or property,
without due process of law; nor deny to any person within its
jurisdiction the equal protections of the laws."

We have, as stated before, the natural right to freedom "from" religion.

No law for, against or otherwise can ever be made with regard to the
church, as it exists under the Supreme Law of the land, within a legal
null. There is no law at all respecting an establishment of religion or
the free exercise thereof.

The rights spoken of here in the First Amendment and the following
Nine Amendments, the Bill of Rights, are personal Rights fought and
paid for the sacrifice of human life by our forefathers. These law-rights
as well as the entire Constitution for the united States are, in fact, the
Supreme Law of the land. The Supreme Court of the United States
(contrasted by writing it more correctly - the supreme Court of the
united States) has addressed itself to this fact, and holds the following
opinions:

"Any law opposed to the Constitution of the United States is as it were

NO LAW AT ALL!"

This doctrine is so important that we have reprinted the fullness of the

text which states the following;

The general rule is .... that an unconstitutional statute, though having

the form and name of law is in reality NO LAW, but is wholly void, and
ineffective [f]or any purpose, since unconstitutionality dates from the
time of its enactment and not merely from the date of the decision so
branding it an unconstitutional law, in legal contemplation, is as
inoperative as if it had never been passed. Since an unconstitutional
law is void, the general principles follow that it imposes no duties,
confers no rights, creates no office, bestows no power or authority on
anyone, affords no protection, and justifies no acts performed under it.
A contract which rests on an unconstitutional statute creates no
obligation to be impaired by subsequent legislation. A void act cannot
be legally inconsistent with a valid one. And an unconstitutional law
cannot operate to supersede any existing valid law. Indeed, insofar as
a statute runs counter to the fundamental law of the land, it is
superseded thereby. Since an unconstitutional statute cannot repeal or
in any way effect an existing one, if a repealing statute is
unconstitutional, the statute which it attempts to repeal remains in full
force and effect. The general principles stated above apply to the
constitutions as well as the laws of the several states insofar as they
are repugnant to the Constitution and the Laws of the United States.
Moreover, a constitution will nullify it as effectually as if it had, in
express terms been enacted in conflict therein." I6 AM. Jr. 2nd, Page
177

From this it is established by the Supreme Law of the land, that NO

LAW for, because of, against, or otherwise is possible regarding
religion. No law is no law at all! The church exists in a legal null under
the Supreme Law of the land, the Constitution for the United States of
America.

RETURNS by EXEMPT
ORGANIZANIONS
So far we have established under the NO LAW concept of the First
Amendment that: The Church is exempt by right and does not have to
petition any government agency for recognition of exempt status. In
fact, as stated in the code cited previously (1.508-1(a)(4)) the church is
exempt whether it files notice or not.

Let us say we have established a church and operated it for one year.
The question comes to mind when every organization and private
person is required to file an annual return - does the church also have
to file?

§ 6033 (a) exempts religious organizations from the need for filing
returns of any kind.

§ 6033 (a)(2)(A) Mandatory exceptions - Paragraph (2) shall not apply to -

(i) churches.

§ 6033 (a)(2)(A)(i) provides for mandatory exceptions to filing requirements

for religious organizations and states that filing requirements shall not
apply to "churches", their integrated auxiliaries, and conventions or
associations of churches.

§ 6033 (a)(2)(A)(iii) exempts as well "the exclusive religious activities of

any religious order"
Explanation: Under Title 26 § 6033, your church or religious order has
complete immunity to disclosure. It is not necessary for you to maintain
records of any kind except for your own purpose and reasons.

Can you believe it? The Congress remained true to the Supreme Law of
the land again. The First Amendment says: "Congress shall make no law
respecting an establishment of religion,"... and they have NO LAW
whatsoever. We are sure that you can now see how you can establish
your church and operate your organization without any liability to any
agency (as far as establishment of recognition of exempt status is
concerned) as well as how you are also legally exempted from filing any
return with any government agency for any reason. NO LAW IS NO
LAW.

DISSOLUTION/TERMINATION
People are not more than the sum total of what they think, say and do,
Let us say because of whom we are and where we are emotionally,
spiritually, academically, financially and personally, we can no longer
live with or otherwise support our involvement in the Church and/or
ministry. Is there any requirement for the person or persons who
establish, and operate a church to notify ANY government agency of a
dissolution, termination or substantial contraction of their church?

26 USC § 6033(b)(1) No return shall be required under this subsection from

churches, their integrated auxiliaries, conventions or associations of
churches REG. 1.6043-3 - Returns regarding liquidation, termination or
substantial contraction or organization exempt from taxation under
501(a), (Vol. 3, pg. 40, 325)

Reg. 1.6043-3(b) - Exceptions. The following organizations are not

required to file the return described in paragraph (a) of this Section.

REG. 1.6043-3(b)(1) - Churches, their auxiliaries, or conventions or

association of churches

In terminating the church existence, there is a form published just for

that action. The number for that form is 966-E and it addresses 26 USC
6043(b) of the Code and your responsibility thereunder. The Title of this
Form is: Liquidation, dissolution. Termination, or substantial contraction
of organizations exempt or formerly exempt under Section 501(a). The
Church is in 501(c)(3), and every organization in (c) is also in (a) You
will find in the instructions at the bottom of the page that the Church,
the integrated auxiliaries and/or associations of churches are exempt
from filing this Form.
 What's A Church?
"Religion is not confined to a sect or a ritual. The symbols of a religion
to one are anathema to another. What one may regard as charity,
another may scorn as foolish waste. And even education is today not
free from divergence of view as to its validity." Unity School of
Christianity, 4 B.T.A. 61, 70 (1925)

"Neither this court nor any branch of this government will consider the
merits or fallacies of a religion. Nor will the court compare the beliefs,
dogmas, and practices of a newly organized religion with those of an
older, more established one. Nor will the court praise or condemn a
religion, however, excellent or fanatical or preposterous it may seem.
Were the court to do so, it would impinge upon the guarantees of the
First Amendment." Judge Brattin for the Eastern District of California;
Universal Life Church, Inc. vs United States, 372, F. Supp. 770, 776
(E.D. Cal (1974))

In United States vs Seeger, 380 U.S. 163 (Supreme Court 1965), we find
the Court addressing the concept of ‫ יתןת‬and religion and holding that
the test of belief in ‫( יתןת‬they put in supreme being) is whether a given
belief that is sincere and meaningful occupies place in the life of its
possessor, [parallel] to that filled by the orthodox belief in ‫ יתןת‬of one
who is clearly religious. Assuming the holding of the Court is valid in
the above cases, it then necessarily follows that any lawful means of
formally observing the tenets of faith of any religious body is worship
within the meaning of the tax-emption provisions.

In another case the court held that.

'The terms "religion" or "religions" in tax exemption laws should not

include any reference to whether the beliefs involved are theistic or
non-theistic. Religion simply includes: (1) a belief, not necessarily
referring to supernatural powers; (2) a cult, involving a gregarious
association openly expressing the belief; (3) a system of moral practice
directly resulting from an adherence to the belief; and (4) an
organization with the cult designed to observe the tenets of belief The
content of the belief is of no moment.' Fellowship of Humanity vs
Alameda County (57)(1) 153 Cal A. 2nd 673, 315 P. 2nd 394

CONCLUSION
This completes our initial consideration of the establishment, operation
and termination of a church.

We believe the fact is established by the above information that the

Church can do three things:

1. Originate

2. Operate, and

3. Terminate

...without any responsibility to any agency, civil government or

otherwise; to gain their approval, sanction, or any other blessings, with
regard to recognition of exempt status (which is your inherent right),
since a church is mandatorily excepted from filing for recognition of
exempt status.

The Church is mandatorily excepted from filing any return with any
government agency. You can terminate the Church without telling any
government agency anything. The Church in fact exists within a legal
null. There is NO LAW.

REMEMBER!
There are two things that a Church does not do: file tax returns (see
26 USC 6033 (a)(2)(A)(l); and think for itself. SO we see that we have
created a legal person with no brains!

THE COURT OF "ORDINATION"

It may be of benefit here to pursue a few more case histories in order
to establish just what the ordination is from established case law.
[When making reference to the church it includes local congregations.]

(a) Kibbe vs. Antram 4 Conn, 134, 139, we see that to "ordain" is to
vest with authority ministerial function of sacerdotal power. Also, from
the above case it is established that "the ordination" of a clergyman
remains even after his separation from a church of which he once had
charge, and his spiritual authority continues, although he is not settled
over a particular congregation.

(b) "Generally a duly 'ordained minister' is one who has followed a

prescribed course of study of religious principles, has been consecrated
to the service of living and teaching that religion through an ordination
ceremony under the auspices of an established church, has been
commissioned by that church as its minister in the service of ‫ יתןת‬and
generally is subject to control or discipline by a council of the church."
Buttocall vs U.S.C.C.A Tex., 130F, 2nd 172, 174

(c) "The minister may be installed over some particular society, either
incorporated or unincorporated." Ruggies vs Kimball, 12 Mass. 337,338

THE MAKING OF A MINISTER

First of all, we need a minister, Duly Ordained, or who may be licensed
and/or Commissioned by the Church. From a Christian perspective, this
individual is usually the product of the following evolution:

CONVERSION
Conversion is an experience that an individual experiences, the end of
which establishes a deep seated personal conviction with respect to
‫יתןת‬, and that individual's responsibility thereunder. More literally
translated from the Greek and Hebrew Scriptures, Conversion is a
turning either towards or away from ‫ יתןת‬and His Law and Word (in this
case we are considering the turn toward ‫ יתןת‬and a final Life, long
commitment thereto) This final commitment may come as a sudden
cri5is or as the result of a prolonged sequence at experience and
events.

MOTIVATION
The Conversion of the individual comes about by becoming aware of the
truth. The truth being established in the heart of the convert causes
him to want to share the truth with others around him. If a real change
has taken place in the life of a convert, he or she will want, with deep
desire, to communicate the truth to others, sharing knowledge and
desiring to bring all unto Christ.

NOTE: We are certain that there are other perspectives relative to

churches and the free exercise of religion which are not necessarily
Christian in nature. However, we cannot speak to these perspectives
since our perspective is one that is particularly Christian.

WHAT IS RELIGION
It would appear from the above that what "religious" or "religion" is
depends upon a person's personal belief and not upon any organized or
official stand. One's concept of the supreme Being cannot be subjected
to evaluative criteria, as long as it is sincere, meaningful, and occupies
a place in your life equal to that concept of ‫ יתןת‬which a person of an
orthodox persuasion might hold. Now, before you perform brain surgery,
it would be well for you to:

"Study to show yourself approved to ‫יתןת‬, a workman that needeth not

be ashamed."
(II Timothy 2:15)

"The moment an attempt is made to limit or restrict ordination to some

special form of ceremony, we begin to discriminate between the diverse
modes and forms of ordination practiced by the various religious
societies. The laws of Ohio make no discrimination in any respect
between Catholic, Gentile, Jewish or any other religious societies or
denominations; much less do they attempt to prescribe any mode of
ministerial ordination, which is defined in the Standard Dictionary as:

the act or rite of admitting and setting apart to the Christian ministry or
the holy orders, especially in the Roman Catholic, Anglican, and Greek
Church’s consecration to the ministry by the laying on of hands of a
bishop or bishops; in other churches, consecration by a presbytery, or
council members." It has been the practice of this court, therefore, to
grant the license to authorize the solemnization of marriages to duly
commissioned officers to the Salvation Army who were engaged under
such priest, Jewish Rabbis, teachers and ministers of spiritualistic
philosophy, and in fact all persons who can prove to the satisfaction of
the court that they have been duly appointed or recognized in the
manner required by the regulations of their respective denomination,
and are devoting themselves generally to the work of officiating and
ministering in the religion interest and affairs of such societies or
bodies."
Re Reinhert, 9 Ohio S& C P. Dec. 441,442

The information presented above that: an ordination is only a

recognition by some religious society (your congregation), publicly
proclaiming that said individual is vested with spiritual authority; a
right which that individual had prior to public proclamation. If, after
once having been ordained, a minister leaves his church and
congregation, his ministerial authority does NOT cease even though he
is no longer physically tied to that initial religious (church) body.
Generally, most ministers have studied and are under the authority of
same governing body. Whether the church is incorporated or
unincorporated, the state has no authority whatsoever in the internal
affairs of the church. And finally, the form of the ordination and the
ceremony means little when we like into consideration all the other
religious organizations in the united States - the rites of one religious
body are considered just as credible as any other religious body.
 OTHER TAX CONSIDERATIONS
The law requires every taxpayer to maintain records that will enable him
to complete an accurate and complete return (see IRS publications 334,
552 and 583) However, the church is a mandatorily tax excepted
organization by right and is not considered to be a taxpayer even
though it operates as a separate legal entity which can buy, sell, rent,
own real property and do any kinds of business as well as sue and be
sued just like a natural born person.

RELATED CHURCH BUSINESS

The Church operates generally on a tax exempt basis: That is, exempt
from property tax, although some states have a qualifying procedure, so
you must check with your local county tax assessor; exempt from state
sales tax and state income tax. In most cases, again, you should check
with your individual state taxing authority, as this also varies from
state to state; exempt from Federal Withholding., FICA and FUTA taxes
for its ministers. See IRS publication 15 Circular E; exempt from Retail
Federal Excise Tax and finally, exempt from Federal Income Tax on its
exempt purposes (see IRS publications 598 and 1018) Generally once a
Letter of determination is issued from the IRS Service Center and
presented to the appropriate State agency, tax exceptions are
recognized quite easily.

Specific Exceptions to Unrelated Church Business

Department of Treasury, IRS Pub. 1018(1-77) Certain Income producing

activities are excepted from tax even though they may be from an on
going, unrelated business, These exceptions are;

(a) Activities in which substantially all the work is performed for the
church by unpaid volunteers;

(b) Activities carried on by the church primarily for the convenience of

its members, students and employees;

(c) Selling merchandise, substantially all of which has been received by

the church as gifts or Contributions;

(d) Generally, dividends, interest, annuities, royalties, and capital gains

and losses;

(e) Generally, rents from real property. Examples of Exceptions;

1) A church holds a monthly bingo game. If substantially all the work is
done by unpaid volunteers, the income is not taxed. Similarly, it a
church regularly holds fund-raising dinners, open to the public, the
income is not taxed it substantially all the work is done by unpaid
volunteers. The specific exceptions of dividends, interest, annuities,
royalties and capital gains and losses are aimed at excluding passive
income from the tax. and taxing income from the active business.

For example:

(a) If a church owns stock in a taxable business, dividends from the

business are not subject to the tax under certain circumstances,
however, property acquired by a church for its use for exempt purposes
in the future is not treated as "debt-financed", An example of this is a
church purchasing land by mortgage for a new church building and
renting the land while collection funds through a building fund. As long
as the exempt use of the property begins within 15 years, any rental
income from the real property falls within the exemption within the
exemption and is riot taxable

REURNS BY EXMPT CHURCHES

26 USC 6033(a)(2)(A)(l) generally, the "church" is mandatory excepted from
filing an annual Federal Tax return (that is Form 990-A), which all other
501(c)(3) organizations are required to file. This does not apply to the
unrelated trade or business or a church however. This is brought to light
in the Regulation, Section l.6033-1(i)(1), which states: "Certain
organizations (i.e. churches) otherwise exempt tax under section 501(a)
and described in 501-C (3) are required to file returns on Form 990T, on
unrelated trade or business."

THE IRS CODE

WHERE ARE WE?
(a) That churches may or may not keep permanent books and records;

(b) These may include, records, and inventories sufficient to show

specifically the items of;

(c) Gross Income:; or,

(d) Receipt (contributions, gifts, etc.):

(e) Disbursements (expenses).

If said church is involved in unrelated trade and business, it must keep
permanent books and records relating specifically to the unrelated trade
and business.

1. Section 6033(a)...

Exempts religious organizations from the need for filing returns of any
kind. § 6033(a)(2)(i) provides for mandatory exceptions to filing
requirements for religious organizations and states that filing
requirements shall not apply to "churches, their related auxiliaries, and
conventions or associations of churches: § 6033 (a)(2)(A)(iii) exempts as
well "the exclusively religious activities of any religious order".

Explanation
Under § 6033, your church or religious order has complete immunity to
disclosure. It is not necessary for you to maintain records of any kind
except for your own purposes and reasons.

2. Section 107....

In case of a minister of the gospel, gross income does not include: (1)
the rental value of a home furnished to him as part of his
compensation; or, (2) the rental allowance paid to him as part of his
compensation, to the extent used by him to rent or provide a home.

Explanation
In order to qualify for the exclusion, the home or rental allowance must
be provided as remuneration for services that are ordinarily the duties
of a minister of the gospel. The rental allowances may be used for the
rental of a home, the purchase of a home, and for expenses directly to
providing a home. Expenses for food and servants are not considered for
this purpose to be directly related to providing a home.

3. SECTION 3401 (A)(9)

Provides that the definition of the term "wages" for tax withholding
purposes does not include remuneration paid "for services performed by
a duly ordained commissioned or licensed minister of a church in the
exercise of duties required by such order; etc."

Explanation
Internal Revenue Service regulations provide guidelines for IRS
employees to help them understand the Internal Revenue Code. IRS
regulation 31.3401 (a)(9) - 1 states; "Service performed by a member of
a religious order in the exercise of duties required by such order
includes all duties required of the member by the order. The nature or
extent of such service is IMMATERIAL, so long as it is a service that the
minister is directed or required to perform by ecclesiastical superiors.

For Example

If Father Mclaughlin is directed by his order to work for the federal

government in the Office of the President, then his employer (in this
case the federal government) is not under any compulsion whatsoever
to withhold either federal income taxes or social security taxes. A
member of a religious order may be required by his order to be an
Advisor to the President, a pilot, or a bank loan officer. The regulation
states that the nature or extent of such service is

IMMATERIAL
4. SECTION 170

Provides that up to 50% of an individual’s Adjusted Gross Income (AGI)

is deductible for contributions to religious and charitable organizations.
The "General Rule" allows tax-deductible status for contributions to "a
church or a convention or association of churches, etc."

Explanation
A person with an adjusted Gross Income of $30,000 may contribute up
to $15,000 and claim such a deduction. Other subsections of Section
170 provide for donations of income-producing assets and also for the
Unlimited Charitable Deduction sometimes known as the "Nun’s Rule".

5. SECTION 1402 (c)(4) provides that:

"the performance of service by a duly ordained, commissioned, or

licensed minister of a church in the exercise of his ministry or by a
member of a religious order in the exercise of duties required by such
order" Is not considered a "trade or business" when used with reference
to self-employment.

Explanation
An auto mechanic, gardener, or medical doctor may be self-employed. If
the religious order of which one is a member directs one to undertake
duties in one’s field of training or experience, as a self-employed
person, then any income received Is not taxable as Income from a
"trade or business".

IRS PUBLICATION 15, 1978 Circular E. Employer’s Tax Guide is

distributed free of charge by the IRS. On page 11, you will find that
"Members of religious orders who have taken a vow of poverty
performing duties required by the order "are exempt from income tax
withholding" and from "social security".
Section 1402 (e) exempts "a member of a religious order who has taken a
vow of poverty as a member of such order" from taxes under the Federal
Insurance Contributions (sic) Act, i.e. FICA or social security. There is
no requirement that you file for this exemption from social security tax.
The exemption is automatic when you are a member of a religious
order, who has taken a vow of poverty as a member of your order.

Under fundamental law, rights and privileges granted any church or

religious order must on the same basis and to the same extent to be
granted to all. If members of your church or religious order are being
discriminated against or are being denied their rights under the U.S.
Constitution then they have cause for prosecution.

Any person, including any government official, within the jurisdiction of

the U.S. Constitution who acts to prefer one religion to any other in an
official capacity, is acting in the violation of the Constitution. At the
very least a government employee may be dismissed for violating his
oath of office to uphold the Constitution and he or she may be subject
to civil and criminal penalties, with fines up to $10,000 or imprisonment
up to five years, or both.

Corporation Sole - A Definition

Black’s Law Dictionary
6th Edition (1891-1991)
Corporation Sole: Unusual type of Corporation consisting of only one
person whose successor becomes the corporation on his death or
resignation; See Aggregate and Sole;

Aggregate and Sole; It is a religious non-profit sole consisting of one

person only, and his successors in some particular station, who are
incorporated by law in order to give them some legal capacities and
advantages, particularly that of perpetuity, which in their natural
persons they could not have had. In this sense, the sovereign in
England is a sole corporation; so is the bishop; so are some of the
deans distinct from their several chapters, and so is every parson and
vicar.

Advantages of "Corporation
 Advantages of "Corporation
Sole"
The following is a report of a discussion of Corporation Sole for the
financial services and asset protection Professionals

Recently, there has been a lot of information and misinformation

passed around among estate planners and investment consultants
regarding the Corporation Sole. Corporations Sole have been around for
over 450 years, so they are not a "new kid on the block". Corporations
Sole are used primarily for holding and passing the title for property
belonging to a church, religious society, or charitable organization. Two
examples of well-known Corporations Sole are the Brothers Winery and
the Sierra Club. Because you will be asked about Corporations Sole, if
you haven’t already been asked, I’ll share a little background
information on Corporations Sole and you may be able to decide if or
how they fit in with the estate planning strategies that you provide for
clients. This discussion is the result of five years of studying
Corporations Sole, and writing Corporations Sole for dozens of clients.
In this learning curve, I have studied the documents written by most of
the current Corporations Sole gurus. In various ways and to varying
degrees, I find that there is a general lack of understanding of the
historic usage of Corporation Sole, even among the so-called "gurus".
There is also a lack of understanding of the statutes regarding
Corporation Sole that results in most cases in giving away of the
potential benefits gained by this unique form of corporation.

People use corporations when they need a means of limiting liability.

Normal Corporations are a creation of the state, and begin their
existence on the date that the state incorporates them. Normal
corporations owe their existence and allegiance to the government.
Corporations "live" forever unless limited by their own Articles of
Incorporations. Normal corporations require several officers, they have
boards of directors, stockholders, annual fees, annual reports, and
operate under many statutory regulations.

People use trusts when they need a means of protecting assets. Trusts
are used when one person entrusts another person with some valuable
asset or a right. The asset or right must be sufficiently identified for
title to pass to the trustee and title must actually pass to the trustee.
The asset or right, therefore, belongs to the Trustee and is not returned
into the ownership of the original owner [trustor] or a designated
beneficiary until the trust terminates on a stipulated date. The reason
why assets placed in trust are not liable for claims against the trustor
or for taxes of the trustor is because the property really does not
belong to someone else. Trusts are not perpetual and they are limited
by statute to a certain number of years [20, 30, 99 years, etc.]. There
are laws against perpetual trusts in virtually most, if not actually all,
jurisdictions.
Wouldn’t it be nice if we could have an organization that has the
advantages of limited liability of a corporation, without the regulation,
without the multiplicity of offices of a corporation, for an organization
that the government does not create (therefore the organization does
not have its allegiance to the state), and also allows the organization
to function as a perpetual trust in order to protect and convey assets
for many generations? Carefully reading and comparing the Utah
Corporation Sole statutes, a good Corporation Sole instrument, and the
"Apostille" [not: "Creation" issued by the Governor's office of the State
of Utah, show that the Corporation Sole can be everything that is listed
above. Are all Corporation Sole documents equally serviceable? Many
documents that do meet the State’s requirements are so poorly written
that they give away all of the advantages recognized in the first
amendment’s "free exercise [of religion]" clause. Some Corporation Sole
documents even attempt to form a contract with "the ALLEGED state of
[State]." Under UCC 1-203, Good Faith is a requirement in all contracts.
Because it is not possible, in our opinion, to operate in good faith when
one is alleging that the other party may or may not exist, then that
kind of Corporation Sole instrument is inherently flawed and the courts
will eventually walk right through them and seize all of the assets that
the corporation accumulates. Some folks who have (in the past)
organized a church under Corporation Sole and then promptly applied for
the IRS 501(c)(3) status. Applying for permission for exemption under
501(c)(3) voids the natural immunity against regulation found in the
First Amendment to the Constitution as well as the Internal Revenue
Service Code, section 508. In spite of some sad examples of poor
planning, there are also some very solid Corporation Sole instruments
that do hold up in the courts.

Being a "Corporation," the Corporation sole is by nature a form of

limiting liability within the assets of the corporation. The statutes on
Corporation Sole in some States stipulate that the property is held "in
trust" for the membership of the organization. This makes this kind of
corporation function as a trust! In fact, the Oklahoma statutes
describing Corporation Sole are found in that state’s trust successor
provisions, with a waiver of the "rule against perpetuities".

One feature of religious societies is that they can accept vows of

poverty by their members [Re; monks, nuns, priests and Overseers].
The IRS recognizes these vows of poverty. For a small part of the IRS
information on Vows of Poverty, look at pages 2 and 5 in IRS Publication
517. When one is under vow of poverty, the physical objects in their
possession are not their own, although it may be their job to look after
and use those objects. Thus, when you see a Catholic Bishop being
moved between a cathedral and a golf course, he may be carried in
stretch limousine, but he is still under a vow of poverty that is
recognized by the IRS and he is not questioned or bothered by the IRS.
Virtually, all Catholic dioceses are organized as Corporations Sole.
One guaranteed way to fail in an attempt to avoid taxation is to work
for W-2 wages and donate 100% of your income to a Corporation Sole
of which you are the overseer. In cases like this, there is a contractual
obligation not to exceed a certain percentage of one’s income in
charitable donations. Also, the IRS justifiably claims that the
Corporation Sole is an "alter ego" of the W-2 wage earner, and liens,
levies, and seizes all of the assets of the Corporation Sole. The best
way to avoid this scenario is to never work for W-2 wages, but if you
do, stay within the guidelines of the IRS when making donations to the
sole. You may use other tax strategies for lowering the tax bite if you
wish but please recommend that your clients protect their family assets
by staying within the law (your contractual obligations). When the client
eventually realizes that there is no way to safely reside within the tax
system, they may want to get out of it completely with a Corporation
Sole.

The religious society’s property that is in the custody of the Overseer

cannot be taken by a court for satisfaction of personal claims against
the Overseer, because the property is held ONLY in the Overseer’s
fiduciary capacity. At one point in American History, the Patriarch of
every household was legally considered as being the Overseer of a
common-law Corporation Sole. In looking at this pattern, it appears that
the U.S. Constitution’s prohibition against "corruption of blood" is one
of the legal foundations and supports for this concept. When no law can
restrict the right, by blood relationship, for your children to inherit the
fruits of the parent’s labor, this is identical in precept to no law being
able to take away the right of future members of your congregation or
religious order [family religious unit] to use and enjoy the property of
previous generations. Quite obviously, the founding fathers of America
thought of the family as the basic religious unit of society. We are
therefore acting as a fiduciary for our grandchildren and the family
property is not ours alone but belongs to the family. Taxation is the
only means for governments to work corruption of blood. Because no
law may impair obligation of contracts and when one places their
family’s property under contract (mortgage or otherwise), that property
is no longer protected by the "corruption of blood" provisions. The
primary contract that compromises our right of owning property is the
Social Security Number.

One of the most difficult contracts that one must deal with is the UCC’s
"holder in due course" issue regarding the Federal Reserve Notes
(FRN’s). The Corporation Sole Vow of Poverty deals with this issue
better than any other method that I have seen. By not owning anything,
we can be carrying pockets full of FRN’s, be in charge of massive
investment accounts, and still have no personal liability for the
bankruptcy nature of the Federal Reserve Notes [United States
Bankruptcy debt instruments].

During the "transition phase" out of a life that is completely under

government regulation and control and into a life of liberty and privacy,
it would appear that Corporation Sole could be a valid and valuable tool
for many traditional family units, both as a limit on liability and for
protection of family assets.

The Modern Corporation Sole

Article published in the Dickinson "Law Review" Volume - 93 No.1 Fall
1988

James B. O’Hara
In 1894, Sir Frederick Pollock asked his American friend Oliver Wendell
Holmes. "Have you such a thing as a corporation sole still about you?"
The future Justice replied, "I don’t know of any corporation sole."

I. Introduction

Blackstone begins his treatment of corporations with the following

classification:

The first division of corporations is into aggregate and sole

…Corporations sole consist of one person only and his successors, in

some particular station, who are incorporated by law, in order to give
them some legal capacities and advantages, particularly that of
perpetuity, which in their natural persons they could not have had.

He then proposes two conspicuous examples of corporations sole, one

civil ("the king is a sole corporation") the other, ecclesiastical ("so is a
bishop...and so is every parson and vicar").

In the period prior to the rise of the modern business corporation and
the legal evolution and development that accompanied it, the
corporation sole was a fixture in every tier of English society. The
corporation sole was as distant from the ordinary peasant and
tradesman as the Crown, but as near as the parish clergy.

A modern Holmes attempting a reply to a modern Pollock might initially

be perplexed, since the usual sources of ready reference suggest two
contradictory conclusions. On the one hand, the sources indicate the
corporation sole is "not common," "almost obsolete," or "obsolescent."’
The standard casebooks and hornbooks of corporation and property law
do not usually treat the topic. Cases cited in legal literature are often
very old, and the only full-length journal article devoted exclusively to
the subject is from the turn of the century.’ At least one author equates
it with the modern "one person" corporation,’ although the two have
completely distinct origins.

On the other hand, further research reveals functioning corporations

sole in at least one-half of the states, with explicit statutory provisions
for corporations sole in about a third. In many jurisdictions, this is the
manner of incorporating Roman Catholic dioceses, or more accurately,
the bishops of those dioceses. From this perspective, the corporation
sole is a useful, even commonplace, legal reality.

The apparent discrepancy is not real. The old common law corporation
sole, which was transported to American shores in colonial days, is
indeed almost dead. However, a modern version, which bears the same
name, has evolved and is widely used today. The transformation from
the old to the new is a fascinating story, well worth the telling.

The present study proposes: 1) to define the classic common law

corporation sole; 2) to trace its development in America; and 3) to
describe the present status of the corporation sole in the United States
with analysis of its modern forms. The emphasis will be fundamentally
American, with English sources serving as points of reference and
prologue. Moreover, the English side of the story has already been
told."

II. The "Old" Common Law Corporation Sole

"Legal nomenclature is for once its own interpreter. A member of a

corporation sole is one of a series of single persons succeeding one
another in some official position." The crux of this description is no:
that the corporation sole is composed of a single person. Rather, it is
really composed of a number of persons who, one after another, hold
the same office. The really crucial element of this definition is the
series itself and the seriatim succession.

For example, Queen Elizabeth II, as a corporation sole, is identical to

Victoria; the present Archbishop of Canterbury in his corporate form is
one with his predecessors, Laud, Benson or Lang. The corporation sole,
unlike its business counterpart, is only vertical in time.

"There are very few points of corporation law applicable to a

corporation sole, according to Kent." There are, however, four legal
characteristics unique to it:

1. All corporations sole are "either public officers or dignitaries of the

established church." In short, the corporation sole is the incorporation
of an office.

2. At common law, the corporation sole can claim title to real property
only.
3. Property and powers of a corporation sole are transferred on the
death of an incumbent to successors in the office, "not to heirs or
through executors."

4. The corporation sole lacks the usual trappings of a corporation. It

does not have a board of directors, officers, stock, bylaws, official
minutes, or corporate name. The older corporations sole are also devoid
of a royal charter or other formal authorization, "characteristics that are
required in later corporations."

Historically, both the king and a variety of clergy qualified as

corporations in their official capacities. However, the ecclesiastical
form is older, dating to the mid-fifteenth century. Initially, the
corporation sole grew out of the efforts of judges to solve title
problems that arose from the passage of real property to a church.
Although the early common law of property was elaborate and intricate,
it sometimes lacked the sophistication to deal with these problems. At
that time, legal forms did not exist that allowed the devise of real
property to a church in fee simple absolute.

The law struggled with this problem in amusing ways. For example,
property was sometimes devised to the saint after whom a parish was
named, or to the four walls of a church building. Under these
circumstances, the local bishop or priest was the agent or
administrator. Therefore, it was only a short leap in logic to incorporate
the agent."

The hierarchical polity of the English church was well suited to this
type of corporate structure. However, it was still another one hundred
fifty years before a civil corporation sole appeared when Lord Coke
ascribed corporateness to the crown. "Blackstone confidently called this
development uniquely English." In one sense, he is correct, but modern
scholarship also finds a powerful Roman Catholic Canon Law influence
on the process.

For all its singularity, the sole corporation had many detractors. In fact,
Maitland and Pollock particularly thought it was an anomaly, a "strange
conceit," a "juristic abortion," an "unhappy freak of English law,"" and a
"useless figment of shreds and patches."

Some of the criticism came from theorists who objected to the

philosophical underpinnings of the fictitious personality of the
corporation sole. But practical problems were also evident. The courts
accepted some officers as corporations, yet resisted the corporate
claims of others similarly situated. This inconsistency may explain why
the corporation sole was not widely extended to other civil officers.

Other practical questions were also raised. What claims on corporate

property might arise from the heirs of a deceased incumbent? What
limits on fraudulent transfer by a dishonest incumbent? Is a separate
accounting required for the incumbent as a corporation and as a private
person? Is there a quasi-fiduciary relationship between the corporation
sole and his successors?

Added to these questions are several other crucial problems:

What happens to the corporation during the illness or absence of the

incumbent; and who manages the property, and with what legal force,
during an interregnum? These practical considerations were more
difficult than the theoretical questions. Yet for all the inconsistency of
application and the eccentricity of the concept, the corporation sole
has endured in some form for more than five centuries.

III. Transition from "Old" to "New"

"At a very early period the religious establishment of England seems to

have been adopted in the colony of Virginia, and, of course, the
common law upon that subject, so far as it was applicable to the
circumstances of that colony." Justice Story went on to count the
corporation sole as among the "general rights" of the Episcopal Church
"growing out of the common law. After the revolution, "the Episcopal
Church no longer retained its character as an exclusive religious
establishment," but the Supreme Court still recognized the rights of the
parson as a corporation sole to continue in full force.

After the Declaration of Independence, early case law indicated that

the corporation sole lived on. "However, sometimes it was found in its
pure common law form, other times in a variant form." In New England,
title to the real property of territorial parishes was occasionally vested
in the resident clergyman. In the South, the Episcopal glebe was
usually held by the minister-in-charge (whatever his title), just as in
England. "The most numerous group of private corporations in the
colonies comprises those which were concerned with religious worship."

The corporation sole, however, applied only to the clergy of the

churches that were or had been legally and formally established. In
another early opinion written by Justice Story, the Supreme Court
voided a royal grant of land to the Episcopal Church in New Hampshire.
The decision was based on the grounds that no one was legally
competent to accept title, since that state had never had an
established church, even in colonial days."

The link with church establishment sealed the fate of the common law
corporation sole in America. The first amendment technically did not
require states to disestablish a church. By implication, however,
establishment was doomed by the Bill of Rights and without religious
establishment; the rights of establishment were moot.

The civil form of the corporation sole never really took hold in the
United States. The king was the most obvious civil corporation sole in
colonial days. After the Revolution, however, only a few minor officers
in some states were accorded a corporate identity probate judges and
town supervisors."

The governor of a state was regarded as a corporation only in

Tennessee. For the most part, the powers and duties of public officers
were adequately defined by statute. Incorporation was not necessary
to guarantee bonds or contracts, or to continue lawsuits. Beginning in
the first half of the nineteenth century, however, new social and
religious forces gave a revived impetus to the sole corporation. The
chief thrust came from a most unlikely source. When John Carroll was
chosen as the first Roman Catholic bishop in the United States in 1789,
gaining secure title to the property of his church in the various states
and territories was one of his most pressing tasks. This task was by no
means easy.

Roman Catholicism had no legal standing in England and its position in

the new nation was awkward. Although Catholicism shared the fruits of
the first amendment, it had a structure that many Americans judged to
be autocratic and monarchical. At that time, congregational ownership
of church property was natural to many denominations in America, but
was contrary to long-established Roman Catholic policy.

Sometimes, for want of a better method, church property was held in

fee simple by the local priest or by a pious layman. This system,
however, led to endless difficulty. There was a constant fear that
church property held in a private name might be claimed by a relative of
the holder. Worse yet, the possibility existed that some unworthy
claimant with a plausible story could make out a case for ownership. In
one lawsuit, an unfrocked priest claimed to be heir to land that a
deceased predecessor had purchased to build a church.

Bishop Carroll won that suit, but for the next seventy years the Roman
Catholic hierarchy struggled to find a legally sufficient and canonically
suitable manner for its church to own property. Vesting title in a board
of elected or appointed trustees was one obvious possibility. In fact,
that is the way Carroll originally incorporated in Maryland." But
"trusteeism" itself became an issue when the trustees in some areas
used their property ownership to pressure the bishops in doctrinal or
disciplinary disputes."

The internal problems of the Catholic Church were exacerbated and

complicated by the rise of a national social and political phenomenon
called the "Know-Nothing" movement In addition to their many other
objections to Catholicism, these opponents had particular objections to
control of church property by the clergy, and strenuously battled the
church on this issue." The bishops battled back, in what they saw as a
defense of the doctrine and practice of their religion against bigots on
the outside and recalcitrants on the inside. Over time, the corporation
sole became a major weapon."
Beginning in 1829, a series of national bishops meetings was held to
address the problems of Catholicism in America. Invariably, property
problems were on the agenda. Soon after the first of these gatherings,
Archbishop Whitfield of Baltimore sought a charter in the form of a
corporation sole from the Maryland General Assembly. In 1832, it was
granted."

The link between Roman Catholicism and the legal concept of a

corporation sole was surprising for two reasons. "First of all, in England,
this mode of incorporation was limited to the Anglican Church." In fact,
the Roman Catholic hierarchy was not reinstated in England until 1850.
Second, Catholic Canon Law did not envision a one-person corporation.
The minimum number required to constitute a "collegiate moral person"
was three." Even the Pope was not a corporation sole. Even though
bishops of dioceses have great autonomy in church law, favorable
action by a board of consultants is still required on major property
decisions to this day.

As Roman Catholicism spread geographically and grew in numbers in

the last decade of the nineteenth century, new dioceses were created
as new areas of the country were settled. Where they could, the
bishops incorporated as a corporation sole. In some states, this
required a private act of special incorporation; in others, a general
incorporation statute was utilized.

The effort was not successful everywhere. On at least one occasion, a

legislature defeated a bishop’s request for sole incorporation on the
grounds that Catholicism would thus acquire a legal right not held by
other religious denominations. Slowly, Roman Catholics won the battle
for their church to be incorporated in a manner consistent with church
polity. During this struggle, the old common law corporation sole was
gradually transformed. There was no longer any link with an established
church. Although legislative action was often the result of activity by
one church, the laws passed were usually broad enough for others.

In the courts, judges began to require specific legislative authorization

for a corporation sole. The common law was not invoked to create sole
corporations in states where the legislature had not acted. Finally, at
the beginning of this century, the Supreme Court, in an opinion by
Justice Holmes, confirmed what was already an almost universal
judicial stance: Apart from statute the law does not recognize the
bishop as a corporation sole.

The transformation of the corporation sole from its common law form to
a legislative format, however subtle, created something altogether
new. Zollmann, writing in 1915, called it "a new form vigorously
flourishing and American in the true sense of the word." The tide had
turned. Momentum to secure the property rights of the Roman Catholic
Church a century ago left permanent traces in modern American law.
Today at least thirty states have a corporation sole in one form or
another.

IV. The Corporation Sole in Statutory Form

Seventeen states explicitly recognize the corporation sole under

statutory law, often in a special section for nonprofit corporations or in
a section on religious societies. At least eight other jurisdictions have
at least one corporation sole created under special or private charter,
sometimes dating to a time before the passage of a general
incorporation statute.

To understand the corporation sole under both of these categories, a

method of analysis will be useful. For states that recognize the
corporation sole under general law, California’s statutes can serve as a
comparative model. For the states with special or private acts of
incorporation, Maryland’s private charter for the Archbishop of Baltimore
is a useful example.

The California legislation dates to 1877 and comprises part 6 of the

title division on nonprofit corporations. Some sections are technical,
and relate to filing provisions, applicability to corporations organized
prior to the implementation of the law, and procedures for voluntary
dissolution. The key sections are those dealing with who may
incorporate, the corporate powers, and the questions of vacancy and
succession.

The California statutory system indicates that a corporation sole may

be formed by a bishop, chief priest presiding elder, or other presiding
officer of any religious denomination, society, or church. The corporate
powers specified in the California law are comprehensive.

In California, a corporation sole may:

(a) Sue and be sued, and defend, in all courts, and places, in all
matters and proceedings whatever.

(b) Contract in the same manner and to the same extent as a natural
person, for the purposes of the trust.

(c) Borrow money, and give promissory notes thereof, and secure the
payment thereof by mortgage or other lien upon property, real or
personal.

(d) Buy, sell, lease, mortgage, and in every way deal in real and
personal property in the same manner that a natural person may,
without the order of any court.

(e) Receive bequests and devises for its own use or upon trusts to the
same extent as natural persons may, subject, however, to the laws
regulating the transfer of property by will.
(f) Appoint attorneys in fact.

The most complex issue regarding the old corporation sole was that of
continuing operation during a vacancy in the office. California deals
with this issue in two ways: 1) at the time of incorporation, the manner
of filling a vacancy is to be specified," and 2) the law makes clear that
the corporation has perpetual existence even during a vacancy."

In contrast with the common law corporation sole, the California

statute, like almost all its modern counterparts, is far more precise. A
comparison will be useful. The common law or "old" corporation sole
applied to some unspecified officers, and not to others of similar origin.
The statutory or "new" corporation sole, in contrast, applies to those
who are designated at the time of their incorporation. The old
corporation sole was "in abeyance" at the time of a vacancy, whereas
the new corporation sole continues through temporary agents. The old
corporation sole could hold title to real estate only, and alienation of
the property was difficult and legally questionable. The new corporation
sole has the same power over its property as any other corporation, and
is not limited in the type of property it can own. In short, the new
statutory corporation sole removes the vagaries of the old.

Private charters have a parallel history and similar content The

Maryland legislation incorporating the Archbishop of Baltimore dates to
1832. The law permits church property held by trustees to be deeded to
the Archbishop and his successors. However, such property is limited to
two acres, must be real property, and can only be used for a church,
parsonage, or burial ground.

In 1868, the Maryland legislature amended the act. The acreage

designation was enlarged to five acres, and "school house" was added
to the list of uses." Up to this point, the Maryland law did not mention
the alienation of property. A later amendment, in 1874, granted the
power "to dispose of, lease, sell and convey from time to time to the
same extent, [as] any private person or other corporate body."

Two subsequent amendments completed the law. In 1894, the

restriction to real property was removed. The Archbishop, as a
corporation sole, was given the power to exercise rights over property
"real, personal or mixed. Finally, in 1927, the acreage restriction was
completely removed. This original 1832 legislation, with its four
amendments, remains the charter of the Archbishop of Baltimore as a
corporation sole. No further change can now be made, because the
Maryland code prohibits the General Assembly from amending the
charter of a religious corporation even if it was previously incorporated
by special act. Furthermore, the code now contains modern provisions
for subsidiary or separate Roman Catholic corporations.

The contrast between the California and Maryland laws is very

apparent. The California legislation consists of more formal and highly
structured general statutes, whereas the Maryland private charter is
rather informal, the product of patchwork amendment. The California
code carefully establishes a process for creating or dissolving a
corporation sole, whereas the Maryland law barely goes beyond the
simple statement that a corporation is deemed to exist. Clearly, the
general statutes represent a later stage in the evolutionary process.

Although differences exist, the corporation’s sole created under general

corporation laws and those established by special acts or private
charters have several common features. They both deserve to be
classified under the heading of "new" or "modern" corporations sole,
because both are more than merely modes of holding title to property.
Both are meant to provide a framework for the operation of a continuing
concern. They are also both meant to provide a structure for the
planning, financing, direction and management necessary for an
organization existing and working in a sophisticated business
environment.

The Achilles heel of the "old" corporation sole was that the corporation
itself was a person holding an office. When the incumbent died, the
common law could only hold the corporate life and activity in
suspension, or "abeyance", until the office was filled again. In regard to
the "old" corporation sole, Maitland said, "Our corporation sole is a man
who dies." Carr added, "that is the difficulty. The artificial personality
of the corporation is not strong enough to compel us to ignore the
natural personality of the sole incorporator. The office has not been
completely personified if the death of the officeholder can cause such a
deadlock.

The modern corporation sole, created under legislative auspices, solves

the succession problem quite satisfactorily in one of two ways. Either a
specified structure of continuing operation is created in statutes, as in
California, or the statutes specify some external set of canons,
practices or rules to deal with an interregnum, as in Maryland.

The fact that the modern American corporation sole works satisfactorily
is, perhaps, best illustrated by the relative absence of recent cases
carried to the appeal level. Corporate structure is seldom at issue, but
the cases tend to run the gamut: torts, contract, civil procedure,
piercing the corporate veil, workman’s compensation, taxation, eminent
domain, estates and simple fraud. Property disputes are relatively rare,
perhaps because there would be first amendment implications for most
corporations sole.

The corporation sole seems to have a settled existence. There has

been no rash of new legislation, nor have there been any repeals of
earlier laws.

V. Special Circumstances
Eight additional states have circumstances meriting comment. The
constitutions of Virginia and West Virginia specify that no charter of
incorporation can be granted to any church or religious denomination.
At least one commentator attributes this prohibition to the influence of
Thomas Jefferson and James Madison. Although the tradition of church-
state separation in Virginia may indeed be traced to the two former
presidents, the constitutional provision in Virginia dates to 1851 long
after the deaths of both.

The West Virginia courts have acknowledged that the provision in that
state is descended from Virginia. While these constitutional provisions
pose no problems to the titles of church property in either state, they
obviously preclude a corporation sole. An article in the Kansas
constitution, which required title to property of religious corporations to
be vested in elected trustees, was repealed in l974.

Connecticut has a provision in its corporation code that gives the local
archbishop or bishop special powers in trust if a Catholic parish
corporation violates or surrenders its charter. The courts have
interpreted this provision to mean that, if a charter is surrendered, all
the property vests in the bishop and his successors, as a corporation
sole. This section provides emergency powers that are not normally
required.

Oklahoma allows for trust succession in the name of an ecclesiastical

office. Vermont, in contrast, specifically forbids any such succession.

Finally, case law in Arkansas and Florida also deserves attention. The
Supreme Court of Arkansas, in dicta, has recognized the Roman Catholic
Bishop of Little Rock as a corporation sole without any special act of
the legislature. The Florida situation is even more unique. The Supreme
Court of Florida has repeatedly held that the common law corporation
sole is in full force in Florida. The court relies on the fact that the
common law has been adopted in Florida and remains in force unless
expressly or impliedly repealed by organic or statutory law. This unique
position initially attracted journal comment, perhaps because it seemed
contrary to the earlier United States Supreme Court position.

VI. A Federal Corporation Sole

Only rarely has there been mention of a federal charter for a religious or
quasi-religious organization. When Congress voted, in 1811, to
incorporate an Episcopal church in the District of Columbia, President
Madison vetoed it in his veto message, the President implied that a
charter of incorporation was in some sense an approval of a religion, in
violation of the Constitution.

More than a century later when incorporation was so common, the

Congress and the President took another view. In 1948, the Vatican
completely severed the Archdiocese of Washington from the
Archdiocese of Baltimore. The new Archbishop of Washington, with the
help of President Truman, sought to have a corporation sole established
as a framework for the new ecclesiastical territory. Congress complied
by passing a private law that established the Archbishop of Washington
and his successors as a corporation sole.

VII. A Yet More Modern Form?

A number of authorities warn against confusing the corporation sole

with the modern "one-person corporation." In fact, courts have held
that a stock corporation is not automatically transformed into a
corporation sole, simply because one person has purchased all of the
stock

It is possible, however, to structure a one-person corporation in such a

way that it closely resembles a corporation sole in operation. In fact,
the Roman Catholic Diocese of Wilmington is so structured under the
general corporation laws of Delaware. The Wilmington diocese is not
incorporated under the terms of the Delaware Code for Religious
Societies and Corporations. Rather, the diocese is incorporated under
the General Corporation Law, which already contains provisions for a
board of one, for non-stock operation, and for formation of a close
corporation. By carefully writing the by-laws, and by addressing the
problems of succession, the Roman Catholic Diocese of Wilmington has
fashioned a corporation that contains all the advantages of the
corporation sole in a state that has no regular provision for one.

Summary

From its quaint beginnings in English law, the corporation sole has
established a modest, yet solid, foothold in the United States. To
churches with a hierarchical structure, and particularly to the Roman
Catholic Church, it has been a secure method for both ownership of
property and daily operation. In a society characterized by religious and
ethnic pluralism, the corporation sole has provided a useful legal
option, well adapted to the needs of certain groups. The corporation
sole has, arguably, made a greater contribution in the United States
than in its native land. The corporation sole is destined to be a
continuing part of American law for years to come.

[ Home ] [ Up ] [ Church v. ekklesia ] [ Strawman Copyright ] [ Feasts.pdf ] [ Corporation Sole ]

[ The Modern Corporation Sole - Reprinted from Dickinson Law Review ] [ The basics ]
[ UCC Redemption vs. JC Redemption ]