There are numerous legal issues that a church needs to consider as part of its operations.
To ensure that your Church is sufficiently protected and complies with the legal requirements, it is important to seek appropriate legal assistance and representation.
Please contact one of our lawyers or professional advisers on (03) 9562 2662.
What is the Appropriate Structure for My Church?While it is not compulsory to incorporate your church, there are several differences between the structure of the church as an incorporated and unincorporated association. For example, if your church is not incorporated, then any property transactions including the sale, purchase and lease of property must be done in the name of a church member on behalf of the church. This means that the church member will be personally liable for contracts entered into by the church member on behalf of the church. The bank account for the church must also be opened in the name of a church member on behalf of the church.If the church is incorporated, then church members and office holders are protected against the personal liability of the church’s debts. However, the church, if incorporated, will have to meet the relevant statutory obligations which govern the church as an incorporated association or a company limited by guarantee, as the case may be.It is important to seek legal advice to ensure that your church has the appropriate structure based on its circumstances.What is the Suitable Governance for My Church?If your church has been structured as a company limited by guarantee, its activities would be governed by its Constitution. Therefore, if a dispute arises, the first place to look would be the Constitution which contains the rules for governing the church.In relation to disputes which are not of a criminal nature, a provision for mediation is usually provided in the Constitution or the rules of the association.However, in relation to conduct of a criminal nature eg allegations involving fraud, dishonesty, sexual offences and child abuse, then the policy and any relevant authorities need to be notified.The church must ensure it understands and complies with their Constitution or their Rules.If your church is an incorporated association, then it may use the procedure in the model rules for an incorporated association unless it has adopted its own set of rules.If your church is not incorporated, then it must have its own set of rules for resolving disputes and other matters concerning church governance and management.Further, other issues to consider include the remuneration of the Board members of the church. If payments to Board members are for the church’s purpose, the ACNC does not prohibit such payments provided it is permissible under the church’s rules, and properly authorised within the charity.Some questions that a charity should consider when deciding whether or not to pay its board members include:Will payments made to Board members affect any current funding arrangements? (e.g. are there conditions on funding that specify funds to be used in a particular way?)Do the charity’s rules allow for payments to board members?Who on the board should be paid and what is the process for determining a reasonable payment?How will the board be accountable and transparent about payment? (e.g. will it provide a remuneration report? Will members be consulted on payment?)Appropriate legal advice should be sought in relation to matters pertaining to the governance of your church to avoid any potential liability for breach, penalty or criminal offences.Is My Church Receiving Tax Exemptions?Did you know that your church as a religious institution is entitled to income tax exemption and other tax concessions for fringe benefit tax and goods and services tax? To be eligible, your church needs to be registered with the ACNC as an entity established for the purpose of “the advancement of religion”. To obtain tax concessions, a religious institution must be registered with ABN, ACNC and endorsed as such by the ATO.We can provide you with advice or assist your church with making the relevant application for tax exemptions.Is My Church’s Policy Compliant with Privacy Laws?The church must also be aware of the Australian Privacy Laws.The church may deal with personal information of a person when obtaining credit card details for goods and services supplied by the church, when church members register for church seminars and conferences, when church members participate in church activities or when people donate money to the church.The church must ensure that it must always obtain the consent of a person before disclosing any personal information, that the information disclosed be used for the purpose disclosed at the time of collecting the personal information.Further, the church must take reasonable steps to ensure that the personal information collected is secure.We are able to assist your church with drafting the relevant Privacy Policy document to ensure that your church employees are aware of the Australian Privacy Law.Do I Understand My Church’s Obligations to its Workers?It is important to identify whether a church worker is an employee or a volunteer of the church. An employee has rights under the Fair Work Act 2009 and the church as employer must be aware of an employee’s rights and its potential liability for breaches of the law.The church as an employer has the same obligations as any other organization to ensure that the workplace is safe.We are able to assist you with the preparation of employment contracts or assist with any disputes brought by employees or volunteers of the church, and the public is also made aware of the Privacy Policy adopted by the church in dealing with any personal information supplied to the church.Does My Church Have a Child Protection Policy?Since 2015, in Victoria, there is no time limit on bringing a claim in relation to the death or personal injury of a person arising from child abuse. Therefore, claims against the church based on grounds of negligence in relation to a child abuse claim are not time barred. Child abuse includes sexual abuse and serious physical abuse.In order to minimize the church’s exposure against child abuse claims, we can assist your church with the drafting of a Child Protection Policy which will be prepared based on the structure and operation of your church.How does My Church Maximize Fundraising?There are several ways a church can fundraise.Due to social media, crowd-funding is now a popular means to raise funds. In July 2017, the ACNC issued new guidelines in relation to crowd-funding. The church needs to ensure that the crowd-funding website that it intends to use is legal and reputable. For example, crowdfunding websites may charge a fee for using the service based on a percentage of money raised successfully.For donations to be tax deductible, the church can apply to be endorsed by the Australian Taxation Office as a Deductible Gift Recipient (“DGR”).We can assist your church with reviewing the terms and conditions of crowd-funding websites or assist your church with making an application for DGR status if it is eligible.Is My Church Seeking Legal Advice for its Property Transactions?Property transactions such as the purchase, sale or lease of church premises can be costly if you do not know the laws and regulations in this area. Depending on the circumstances, the church may either be a landlord or tenant of the property.For example, for the occasional non-exclusive use of church property for a wedding or event, a licence agreement should be used.The church must ensure that it has the appropriate public liability insurance cover for its premises.A lease permits the exclusive use of the property. The church must negotiate the term of the lease, the rent, any rent incentive, options of renewal for further terms, outgoings payable, make good requirements, rent reviews etc. carefully. Further, the church must ensure that the property is zoned for several uses including as a place of worship. The most recent Ministerial Determination which came into effect on 1 January 2015 states that charitable and community purposes leases are excluded from the operations of the Retail Leases Act 2003 (Vic) if the purpose of the premises is for community benefit or service, the rent payable is less than $10,000 per annum and the lease was entered into after 1 January 2015.This means that property owned or leased by your church may or may not be covered by the Retail Leases Act 2003 (Vic).If your church lease is not covered by the Retail Leases Act 2003 (Vic), it must pay land tax. However, the land is exempt from land tax if it is used by a charitable institution exclusively for charitable purposes. As the Church is a not-for-profit organization, it is not required to pay land tax. The landlord should make an application to the State Revenue Office for exemption of land tax.It is important for the church to seek legal advice before signing any contracts including a lease. We are able to review your contracts and provide you with appropriate advice. How does My Church Sponsor a Religious Worker from Overseas?As the church grows, the church may have a need to sponsor foreign religious workers. The requirements of the Australian immigration laws are subject to amendments from time to time. Currently, the entitlement for foreign religious workers to apply to live in Australia is available through subclasses 408, 457 or 187 visas. Depending on the specific circumstances and requirements of the church, the visa application for the foreign religious worker must comply with the criteria of a particular subclass.
We are here to serve you. If you have any questions or require a meeting to discuss any of the above or any other issue, please contact one of our lawyers or professional advisers on (03) 9562 2662 or visit www.jklawyers.com.au.