Corporation Sole

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What is Corporation Sole?

By Glen Stoll, Director and General Counsel of Remedies at LawSeptember 4, 1998

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

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

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

An unincorporated church ministry, such as a local mission or family assembly, is the only authoritythat may grant a charter for the creation of a Corporation Sole. The Articles of Incorporation and Chartermust be registered with the church before notice of its existence can be given. A filing with theSecretary of State or county recorder provides notice to the public at large and to the state in generalthat 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, theword "sole" meaning singular. That single office is incorporated into the body of Christ to serve theunincorporated ministry. The Corporation Sole is historically Christian in its function and structure and isexempt from federal, state or local license or tax by its very nature.

THE CORPORATION SOLE THE OVERSEER THE MINISTRYThe King of England The King EnglandThe Bishop of the Church ofRome The Bishop The Church of Rome

The Office of the President of theChurch of Jesus Christ of Later-day Saints

The Office of the President The Church of Jesus Christ ofLatter-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, andpropagate 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 andceremonies. A Mission is an establishment of churches, schools and relief depots through which aretaught 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 UnitedStates 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, Section1.513-2(ii) vol. 1, page 33, 471-42, and in The Law of Tax ExemptOrganizations 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 ifsuch 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 civillaw corporation or otherwise. (note "or otherwise", you do not have toincorporate and thus become a creature of the state.)

However, the option does remain for the church to incorporate if itdesires. There are both advantages and disadvantages to both sides ofthis question. One item of interest is the position taken by the State onthe rights on incorporated entities. Official IRS Audit Guide, Section242.31, addressing corporation books and records it states:

The privilege against self incrimination under the Fifth Amendment doesnot apply to corporations.

The theory for this is that the State, having created the corporation, hasreserved the power to inquire into its activities. Now, if we truly subscribeto the doctrine of "separation of church and state", we should give thismatter our full attention. If we incorporate, we give up the Right andbecome controlled, at least to a degree, by the State. If we remainUnincorporated (as one who is not a 14th Amendment citizen), we retainall of our Rights under the Bill of Rights, (i.e., the first ten amendmentsto the Constitution for the united States of America). We elect to remainunincorporated.



In summary, under the previous stated regulation (1.511-2(ii)), a "churchis an organization the 'duties' of which include the ministration orsacerdotal, (i.e. priestly) functions and the practices of a particularreligious body. A Church may also include a religious order or otherorganizations which is an 'integral part' of a church and is engaged incarrying 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 themerits of fallacies of religion, nor will the Court compare the beliefs,dogmas, and practices of a newly organized religion with those of anolder, more established religion, nor will the Court praise or condemn areligion, however excellent or fanatical or preposterous it may seem.Were the Court to do so, it would impinge upon guarantees of the FirstAmendment" [See "Law of tax and Exempt Organizations: by BruceHopkins, published by Learner Book Co. 1977, pg. 110, in your local lawlibrary] 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 citizensenjoy 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 statuscannot be subjected to evaluative criteria or government standards, assuch action would tend to prescribe the form and content of religiousbeliefs and practices. Also, whatsoever rights, privileges and exemptionsor immunities are granted to any church, and/or religion, are also andmust on the same basis and to the same extent, be granted to allchurches and/or religions

Religious Freedom - A NaturalRight

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

"Congress shall make no law respecting an establishment of religion, orprohibiting 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 thejurisdiction thereof, are citizens of the United States and of the statewherein they reside. No state shall make or enforce an law which shallabridge the privileges or immunities of citizens of the United States; norshall any state deprive any person of life, liberty or property, without dueprocess of law; nor deny to any person within its jurisdiction the equalprotections 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 thechurch, as it exists under the Supreme Law of the land, within a legalnull. There is no law at all respecting an establishment of religion or thefree exercise thereof.

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

"Any law opposed to the Constitution of the United States is as it were NOLAW AT ALL!"

This doctrine is so important that we have reprinted the fullness of thetext which states the following;

The general rule is .... that an unconstitutional statute, though having theform and name of law is in reality NO LAW, but is wholly void, andineffective [f]or any purpose, since unconstitutionality dates from thetime of its enactment and not merely from the date of the decision sobranding it an unconstitutional law, in legal contemplation, is asinoperative as if it had never been passed. Since an unconstitutional lawis void, the general principles follow that it imposes no duties, confers norights, creates no office, bestows no power or authority on anyone,affords no protection, and justifies no acts performed under it. A contractwhich rests on an unconstitutional statute creates no obligation to beimpaired by subsequent legislation. A void act cannot be legallyinconsistent with a valid one. And an unconstitutional law cannot operateto supersede any existing valid law. Indeed, insofar as a statute runscounter to the fundamental law of the land, it is superseded thereby.Since an unconstitutional statute cannot repeal or in any way effect anexisting one, if a repealing statute is unconstitutional, the statute which it



attempts to repeal remains in full force and effect. The general principlesstated above apply to the constitutions as well as the laws of the severalstates insofar as they are repugnant to the Constitution and the Laws ofthe United States. Moreover, a constitution will nullify it as effectually asif 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 LAWfor, because of, against, or otherwise is possible regarding religion. Nolaw is no law at all! The church exists in a legal null under the SupremeLaw of the land, the Constitution for the United States of America.

RETURNS by EXEMPTORGANIZANIONS

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

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

6033 (a) exempts religious organizations from the need for filing returnsof 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 requirementsfor religious organizations and states that filing requirements shall notapply to "churches", their integrated auxiliaries, and conventions orassociations of churches.

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

Explanation: Under Title 26 6033, your church or religious order hascomplete 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 ofthe land again. The First Amendment says: "Congress shall make no lawrespecting an establishment of religion,"... and they have NO LAWwhatsoever. We are sure that you can now see how you can establishyour church and operate your organization without any liability to anyagency (as far as establishment of recognition of exempt status isconcerned) as well as how you are also legally exempted from filing anyreturn with any government agency for any reason. NO LAW IS NOLAW.

DISSOLUTION/TERMINATIONPeople 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 livewith or otherwise support our involvement in the Church and/or ministry.Is there any requirement for the person or persons who establish, andoperate 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 fromchurches, their integrated auxiliaries, conventions or associations ofchurches REG. 1.6043-3 - Returns regarding liquidation, termination orsubstantial contraction or organization exempt from taxation under501(a), (Vol. 3, pg. 40, 325)

Reg. 1.6043-3(b) - Exceptions. The following organizations are notrequired to file the return described in paragraph (a) of this Section.

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

In terminating the church existence, there is a form published just forthat action. The number for that form is 966-E and it addresses 26 USC6043(b) of the Code and your responsibility thereunder. The Title of thisForm is: Liquidation, dissolution. Termination, or substantial contractionof organizations exempt or formerly exempt under Section 501(a). TheChurch is in 501(c)(3), and every organization in (c) is also in (a) You willfind in the instructions at the bottom of the page that the Church, theintegrated auxiliaries and/or associations of churches are exempt fromfiling this Form.



What's A Church?"Religion is not confined to a sect or a ritual. The symbols of a religion toone are anathema to another. What one may regard as charity, anothermay scorn as foolish waste. And even education is today not free fromdivergence 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 themerits or fallacies of a religion. Nor will the court compare the beliefs,dogmas, and practices of a newly organized religion with those of anolder, more established one. Nor will the court praise or condemn areligion, however, excellent or fanatical or preposterous it may seem.Were the court to do so, it would impinge upon the guarantees of theFirst 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 findthe Court addressing the concept of and religion and holding that thetest of belief in (they put in supreme being) is whether a given beliefthat is sincere and meaningful occupies place in the life of its possessor,[parallel] to that filled by the orthodox belief in of one who is clearlyreligious. Assuming the holding of the Court is valid in the above cases, itthen necessarily follows that any lawful means of formally observing thetenets of faith of any religious body is worship within the meaning of thetax-emption provisions.

In another case the court held that.

'The terms "religion" or "religions" in tax exemption laws should notinclude any reference to whether the beliefs involved are theistic or non-theistic. Religion simply includes: (1) a belief, not necessarily referring tosupernatural powers; (2) a cult, involving a gregarious association openlyexpressing the belief; (3) a system of moral practice directly resultingfrom an adherence to the belief; and (4) an organization with the cultdesigned to observe the tenets of belief The content of the belief is of nomoment.' 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, operationand termination of a church.

We believe the fact is established by the above information that theChurch can do three things:

1. Originate

2. Operate, and

3. Terminate

...without any responsibility to any agency, civil government orotherwise; to gain their approval, sanction, or any other blessings, withregard to recognition of exempt status (which is your inherent right),since a church is mandatorily excepted from filing for recognition ofexempt status.

The Church is mandatorily excepted from filing any return with anygovernment agency. You can terminate the Church without telling anygovernment 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 26USC 6033 (a)(2)(A)(l); and think for itself. SO we see that we have createda legal person with no brains!

THE COURT OF "ORDINATION"It may be of benefit here to pursue a few more case histories in order toestablish just what the ordination is from established case law. [Whenmaking reference to the church it includes local congregations.]

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

(b) "Generally a duly 'ordained minister' is one who has followed aprescribed course of study of religious principles, has been consecrated tothe service of living and teaching that religion through an ordination



ceremony under the auspices of an established church, has beencommissioned by that church as its minister in the service of andgenerally 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, eitherincorporated or unincorporated." Ruggies vs Kimball, 12 Mass. 337,338

THE MAKING OF A MINISTERFirst of all, we need a minister, Duly Ordained, or who may be licensedand/or Commissioned by the Church. From a Christian perspective, thisindividual is usually the product of the following evolution:

CONVERSION

Conversion is an experience that an individual experiences, the end ofwhich establishes a deep seated personal conviction with respect to ,and that individual's responsibility thereunder. More literally translatedfrom the Greek and Hebrew Scriptures, Conversion is a turning eithertowards or away from and His Law and Word (in this case we areconsidering the turn toward and a final Life, long commitmentthereto) This final commitment may come as a sudden cri5is or as theresult of a prolonged sequence at experience and events.

MOTIVATION

The Conversion of the individual comes about by becoming aware of thetruth. The truth being established in the heart of the convert causes himto want to share the truth with others around him. If a real change hastaken 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 tobring all unto Christ.

NOTE: We are certain that there are other perspectives relative tochurches and the free exercise of religion which are not necessarilyChristian in nature. However, we cannot speak to these perspectivessince our perspective is one that is particularly Christian.

WHAT IS RELIGION



It would appear from the above that what "religious" or "religion" isdepends upon a person's personal belief and not upon any organized orofficial stand. One's concept of the supreme Being cannot be subjected toevaluative criteria, as long as it is sincere, meaningful, and occupies aplace in your life equal to that concept of which a person of anorthodox persuasion might hold. Now, before you perform brain surgery,it would be well for you to:

"Study to show yourself approved to , a workman that needeth not beashamed."(II Timothy 2:15)

"The moment an attempt is made to limit or restrict ordination to somespecial form of ceremony, we begin to discriminate between the diversemodes and forms of ordination practiced by the various religioussocieties. The laws of Ohio make no discrimination in any respectbetween Catholic, Gentile, Jewish or any other religious societies ordenominations; much less do they attempt to prescribe any mode ofministerial ordination, which is defined in the Standard Dictionary as:

the act or rite of admitting and setting apart to the Christian ministry orthe holy orders, especially in the Roman Catholic, Anglican, and GreekChurchs consecration to the ministry by the laying on of hands of abishop or bishops; in other churches, consecration by a presbytery, orcouncil members." It has been the practice of this court, therefore, togrant the license to authorize the solemnization of marriages to dulycommissioned officers to the Salvation Army who were engaged undersuch priest, Jewish Rabbis, teachers and ministers of spiritualisticphilosophy, and in fact all persons who can prove to the satisfaction ofthe court that they have been duly appointed or recognized in the mannerrequired by the regulations of their respective denomination, and aredevoting themselves generally to the work of officiating and ministering inthe 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 recognitionby some religious society (your congregation), publicly proclaiming thatsaid individual is vested with spiritual authority; a right which thatindividual had prior to public proclamation. If, after once having beenordained, a minister leaves his church and congregation, his ministerialauthority does NOT cease even though he is no longer physically tied tothat initial religious (church) body. Generally, most ministers havestudied and are under the authority of same governing body. Whether thechurch is incorporated or unincorporated, the state has no authoritywhatsoever in the internal affairs of the church. And finally, the form ofthe ordination and the ceremony means little when we like intoconsideration 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 CONSIDERATIONSThe law requires every taxpayer to maintain records that will enable himto complete an accurate and complete return (see IRS publications 334,552 and 583) However, the church is a mandatorily tax exceptedorganization by right and is not considered to be a taxpayer even thoughit operates as a separate legal entity which can buy, sell, rent, own realproperty and do any kinds of business as well as sue and be sued just likea natural born person.

RELATED CHURCH BUSINESS

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

Specific Exceptions to Unrelated Church Business

Department of Treasury, IRS Pub. 1018(1-77) Certain Income producingactivities are excepted from tax even though they may be from an ongoing, unrelated business, These exceptions are;

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

(b) Activities carried on by the church primarily for the convenience of itsmembers, students and employees;

(c) Selling merchandise, substantially all of which has been received bythe church as gifts or Contributions;

(d) Generally, dividends, interest, annuities, royalties, and capital gainsand losses;

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



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

For example:

(a) If a church owns stock in a taxable business, dividends from thebusiness are not subject to the tax under certain circumstances, however,property acquired by a church for its use for exempt purposes in thefuture is not treated as "debt-financed", An example of this is a churchpurchasing land by mortgage for a new church building and renting theland while collection funds through a building fund. As long as the exemptuse of the property begins within 15 years, any rental income from thereal property falls within the exemption within the exemption and is riottaxable

REURNS BY EXMPT CHURCHES

26 USC 6033(a)(2)(A)(l) generally, the "church" is mandatory excepted fromfiling an annual Federal Tax return (that is Form 990-A), which all other501(c)(3) organizations are required to file. This does not apply to theunrelated trade or business or a church however. This is brought to lightin the Regulation, Section l.6033-1(i)(1), which states: "Certainorganizations (i.e. churches) otherwise exempt tax under section 501(a)and described in 501-C (3) are required to file returns on Form 990T, onunrelated trade or business."

THE IRS CODEWHERE ARE WE?

(a) That churches may or may not keep permanent books and records;

(b) These may include, records, and inventories sufficient to showspecifically 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 keeppermanent books and records relating specifically to the unrelated tradeand business.

1. Section 6033(a)...

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

Explanation

Under 6033, your church or religious order has complete immunity todisclosure. It is not necessary for you to maintain records of any kindexcept 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, tothe extent used by him to rent or provide a home.

Explanation

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

3. SECTION 3401 (A)(9)

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

Explanation

Internal Revenue Service regulations provide guidelines for IRSemployees to help them understand the Internal Revenue Code. IRSregulation 31.3401 (a)(9) - 1 states; "Service performed by a member of



a religious order in the exercise of duties required by such order includesall duties required of the member by the order. The nature or extent ofsuch service is IMMATERIAL, so long as it is a service that the minister isdirected or required to perform by ecclesiastical superiors.

For Example

If Father Mclaughlin is directed by his order to work for the federalgovernment in the Office of the President, then his employer (in this casethe federal government) is not under any compulsion whatsoever towithhold either federal income taxes or social security taxes. A memberof a religious order may be required by his order to be an Advisor to thePresident, a pilot, or a bank loan officer. The regulation states that thenature or extent of such service is

IMMATERIAL

4. SECTION 170

Provides that up to 50% of an individuals Adjusted Gross Income (AGI) isdeductible for contributions to religious and charitable organizations. The"General Rule" allows tax-deductible status for contributions to "a churchor 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 170provide for donations of income-producing assets and also for theUnlimited Charitable Deduction sometimes known as the "Nuns Rule".

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

"the performance of service by a duly ordained, commissioned, orlicensed minister of a church in the exercise of his ministry or by amember of a religious order in the exercise of duties required by suchorder" Is not considered a "trade or business" when used with referenceto self-employment.

Explanation

An auto mechanic, gardener, or medical doctor may be self-employed. Ifthe religious order of which one is a member directs one to undertakeduties in ones field of training or experience, as a self-employed person,then any income received Is not taxable as Income from a "trade orbusiness".

IRS PUBLICATION 15, 1978 Circular E. Employers Tax Guide isdistributed free of charge by the IRS. On page 11, you will find that



"Members of religious orders who have taken a vow of povertyperforming duties required by the order "are exempt from income taxwithholding" and from "social security".

Section 1402 (e) exempts "a member of a religious order who has taken avow of poverty as a member of such order" from taxes under the FederalInsurance Contributions (sic) Act, i.e. FICA or social security. There is norequirement that you file for this exemption from social security tax. Theexemption is automatic when you are a member of a religious order, whohas taken a vow of poverty as a member of your order.

Under fundamental law, rights and privileges granted any church orreligious order must on the same basis and to the same extent to begranted to all. If members of your church or religious order are beingdiscriminated 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 ofthe U.S. Constitution who acts to prefer one religion to any other in anofficial capacity, is acting in the violation of the Constitution. At the veryleast a government employee may be dismissed for violating his oath ofoffice to uphold the Constitution and he or she may be subject to civil andcriminal penalties, with fines up to $10,000 or imprisonment up to fiveyears, or both.

Corporation Sole - A Definition

Blacks Law Dictionary6th Edition (1891-1991)

Corporation Sole: Unusual type of Corporation consisting of only oneperson whose successor becomes the corporation on his death orresignation; See Aggregate and Sole;

Aggregate and Sole; It is a religious non-profit sole consisting of oneperson only, and his successors in some particular station, who areincorporated by law in order to give them some legal capacities andadvantages, particularly that of perpetuity, which in their natural personsthey could not have had. In this sense, the sovereign in England is a solecorporation; so is the bishop; so are some of the deans distinct from theirseveral chapters, and so is every parson and vicar.



Advantages of "CorporationSole"

The following is a report of a discussion of Corporation Sole forthe financial services and asset protection Professionals

Recently, there has been a lot of information and misinformation passedaround among estate planners and investment consultants regarding theCorporation Sole. Corporations Sole have been around for over 450years, so they are not a "new kid on the block". Corporations Sole areused primarily for holding and passing the title for property belonging to achurch, religious society, or charitable organization. Two examples ofwell-known Corporations Sole are the Brothers Winery and the SierraClub. Because you will be asked about Corporations Sole, if you haventalready been asked, Ill share a little background information onCorporations Sole and you may be able to decide if or how they fit in withthe estate planning strategies that you provide for clients. This discussionis the result of five years of studying Corporations Sole, and writingCorporations Sole for dozens of clients. In this learning curve, I havestudied the documents written by most of the current Corporations Solegurus. In various ways and to varying degrees, I find that there is ageneral lack of understanding of the historic usage of Corporation Sole,even among the so-called "gurus". There is also a lack of understandingof the statutes regarding Corporation Sole that results in most cases ingiving away of the potential benefits gained by this unique form ofcorporation.

People use corporations when they need a means of limiting liability.Normal Corporations are a creation of the state, and begin their existenceon the date that the state incorporates them. Normal corporations owetheir existence and allegiance to the government. Corporations "live"forever unless limited by their own Articles of Incorporations. Normalcorporations require several officers, they have boards of directors,stockholders, annual fees, annual reports, and operate under manystatutory regulations.

People use trusts when they need a means of protecting assets. Trustsare used when one person entrusts another person with some valuableasset or a right. The asset or right must be sufficiently identified for titleto pass to the trustee and title must actually pass to the trustee. Theasset or right, therefore, belongs to the Trustee and is not returned intothe ownership of the original owner [trustor] or a designated beneficiaryuntil the trust terminates on a stipulated date. The reason why assetsplaced in trust are not liable for claims against the trustor or for taxes ofthe trustor is because the property really does not belong to someone



else. Trusts are not perpetual and they are limited by statute to a certainnumber of years [20, 30, 99 years, etc.]. There are laws againstperpetual trusts in virtually most, if not actually all, jurisdictions.

Wouldnt it be nice if we could have an organization that has theadvantages of limited liability of a corporation, without the regulation,without the multiplicity of offices of a corporation, for an organization thatthe government does not create (therefore the organization does nothave its allegiance to the state), and also allows the organization tofunction as a perpetual trust in order to protect and convey assets formany generations? Carefully reading and comparing the Utah CorporationSole 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. Areall Corporation Sole documents equally serviceable? Many documents thatdo meet the States requirements are so poorly written that they giveaway all of the advantages recognized in the first amendments "freeexercise [of religion]" clause. Some Corporation Sole documents evenattempt to form a contract with "the ALLEGED state of [State]." UnderUCC 1-203, Good Faith is a requirement in all contracts. Because it is notpossible, in our opinion, to operate in good faith when one is alleging thatthe other party may or may not exist, then that kind of Corporation Soleinstrument is inherently flawed and the courts will eventually walk rightthrough them and seize all of the assets that the corporationaccumulates. Some folks who have (in the past) organized a churchunder Corporation Sole and then promptly applied for the IRS 501(c)(3)status. Applying for permission for exemption under 501(c)(3) voids thenatural immunity against regulation found in the First Amendment to theConstitution as well as the Internal Revenue Service Code, section 508.In spite of some sad examples of poor planning, there are also some verysolid Corporation Sole instruments that do hold up in the courts.

Being a "Corporation," the Corporation sole is by nature a form of limitingliability within the assets of the corporation. The statutes on CorporationSole in some States stipulate that the property is held "in trust" for themembership of the organization. This makes this kind of corporationfunction as a trust! In fact, the Oklahoma statutes describing CorporationSole are found in that states trust successor provisions, with a waiver ofthe "rule against perpetuities".

One feature of religious societies is that they can accept vows of povertyby their members [Re; monks, nuns, priests and Overseers]. The IRSrecognizes these vows of poverty. For a small part of the IRS informationon Vows of Poverty, look at pages 2 and 5 in IRS Publication 517. When oneis under vow of poverty, the physical objects in their possession are nottheir own, although it may be their job to look after and use thoseobjects. Thus, when you see a Catholic Bishop being moved between acathedral 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 isnot questioned or bothered by the IRS. Virtually, all Catholic dioceses areorganized as Corporations Sole.

One guaranteed way to fail in an attempt to avoid taxation is to work forW-2 wages and donate 100% of your income to a Corporation Sole ofwhich you are the overseer. In cases like this, there is a contractualobligation not to exceed a certain percentage of ones income incharitable donations. Also, the IRS justifiably claims that the CorporationSole is an "alter ego" of the W-2 wage earner, and liens, levies, andseizes all of the assets of the Corporation Sole. The best way to avoid thisscenario is to never work for W-2 wages, but if you do, stay within theguidelines of the IRS when making donations to the sole. You may useother tax strategies for lowering the tax bite if you wish but pleaserecommend that your clients protect their family assets by staying withinthe law (your contractual obligations). When the client eventually realizesthat there is no way to safely reside within the tax system, they maywant to get out of it completely with a Corporation Sole.

The religious societys property that is in the custody of the Overseercannot be taken by a court for satisfaction of personal claims against theOverseer, because the property is held ONLY in the Overseers fiduciarycapacity. At one point in American History, the Patriarch of everyhousehold was legally considered as being the Overseer of a common-lawCorporation Sole. In looking at this pattern, it appears that the U.S.Constitutions prohibition against "corruption of blood" is one of the legalfoundations and supports for this concept. When no law can restrict theright, by blood relationship, for your children to inherit the fruits of theparents labor, this is identical in precept to no law being able to takeaway the right of future members of your congregation or religious order[family religious unit] to use and enjoy the property of previousgenerations. Quite obviously, the founding fathers of America thought ofthe family as the basic religious unit of society. We are therefore actingas a fiduciary for our grandchildren and the family property is not oursalone but belongs to the family. Taxation is the only means forgovernments to work corruption of blood. Because no law may impairobligation of contracts and when one places their familys property undercontract (mortgage or otherwise), that property is no longer protected bythe "corruption of blood" provisions. The primary contract thatcompromises our right of owning property is the Social Security Number.

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



During the "transition phase" out of a life that is completely undergovernment regulation and control and into a life of liberty and privacy, itwould appear that Corporation Sole could be a valid and valuable tool formany traditional family units, both as a limit on liability and for protectionof family assets.

The Modern Corporation SoleArticle published in the Dickinson "Law Review" Volume - 93 No.1 Fall

1988

James B. OHara

In 1894, Sir Frederick Pollock asked his American friend Oliver WendellHolmes. "Have you such a thing as a corporation sole still about you?"The future Justice replied, "I dont know of any corporation sole."

I. Introduction

Blackstone begins his treatment of corporations with the followingclassification:

The first division of corporations is into aggregate and sole

Corporations sole consist of one person only and his successors, insome particular station, who are incorporated by law, in order to givethem some legal capacities and advantages, particularly that ofperpetuity, which in their natural persons they could not have had.

He then proposes two conspicuous examples of corporations sole, onecivil ("the king is a sole corporation") the other, ecclesiastical ("so is abishop...and so is every parson and vicar").

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

A modern Holmes attempting a reply to a modern Pollock might initiallybe perplexed, since the usual sources of ready reference suggest twocontradictory conclusions. On the one hand, the sources indicate thecorporation sole is "not common," "almost obsolete," or "obsolescent."The standard casebooks and hornbooks of corporation and property lawdo not usually treat the topic. Cases cited in legal literature are often very



old, and the only full-length journal article devoted exclusively to thesubject is from the turn of the century. At least one author equates itwith the modern "one person" corporation, although the two havecompletely distinct origins.

On the other hand, further research reveals functioning corporations solein at least one-half of the states, with explicit statutory provisions forcorporations sole in about a third. In many jurisdictions, this is themanner of incorporating Roman Catholic dioceses, or more accurately,the bishops of those dioceses. From this perspective, the corporation soleis a useful, even commonplace, legal reality.

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

The present study proposes: 1) to define the classic common lawcorporation sole; 2) to trace its development in America; and 3) todescribe the present status of the corporation sole in the United Stateswith analysis of its modern forms. The emphasis will be fundamentallyAmerican, with English sources serving as points of reference andprologue. 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 acorporation sole is one of a series of single persons succeeding oneanother in some official position." The crux of this description is no: thatthe corporation sole is composed of a single person. Rather, it is reallycomposed of a number of persons who, one after another, hold the sameoffice. The really crucial element of this definition is the series itself andthe seriatim succession.

For example, Queen Elizabeth II, as a corporation sole, is identical toVictoria; the present Archbishop of Canterbury in his corporate form isone 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 corporationsole, according to Kent." There are, however, four legal characteristicsunique to it:

1. All corporations sole are "either public officers or dignitaries of theestablished church." In short, the corporation sole is the incorporation ofan 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 deathof an incumbent to successors in the office, "not to heirs or throughexecutors."

4. The corporation sole lacks the usual trappings of a corporation. It doesnot have a board of directors, officers, stock, bylaws, official minutes, orcorporate name. The older corporations sole are also devoid of a royalcharter or other formal authorization, "characteristics that are required inlater corporations."

Historically, both the king and a variety of clergy qualified as corporationsin their official capacities. However, the ecclesiastical form is older, datingto the mid-fifteenth century. Initially, the corporation sole grew out of theefforts of judges to solve title problems that arose from the passage ofreal property to a church. Although the early common law of propertywas elaborate and intricate, it sometimes lacked the sophistication to dealwith these problems. At that time, legal forms did not exist that allowedthe 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 wasnamed, or to the four walls of a church building. Under thesecircumstances, 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 ofcorporate structure. However, it was still another one hundred fifty yearsbefore a civil corporation sole appeared when Lord Coke ascribedcorporateness to the crown. "Blackstone confidently called thisdevelopment uniquely English." In one sense, he is correct, but modernscholarship also finds a powerful Roman Catholic Canon Law influence onthe process.

For all its singularity, the sole corporation had many detractors. In fact,Maitland and Pollock particularly thought it was an anomaly, a "strangeconceit," 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 thephilosophical underpinnings of the fictitious personality of the corporationsole. But practical problems were also evident. The courts accepted someofficers as corporations, yet resisted the corporate claims of otherssimilarly situated. This inconsistency may explain why the corporationsole was not widely extended to other civil officers.

Other practical questions were also raised. What claims on corporateproperty might arise from the heirs of a deceased incumbent? What limits



on fraudulent transfer by a dishonest incumbent? Is a separateaccounting required for the incumbent as a corporation and as a privateperson? Is there a quasi-fiduciary relationship between the corporationsole and his successors?

Added to these questions are several other crucial problems:

What happens to the corporation during the illness or absence of theincumbent; and who manages the property, and with what legal force,during an interregnum? These practical considerations were more difficultthan the theoretical questions. Yet for all the inconsistency of applicationand the eccentricity of the concept, the corporation sole has endured insome form for more than five centuries.

III. Transition from "Old" to "New"

"At a very early period the religious establishment of England seems tohave been adopted in the colony of Virginia, and, of course, the commonlaw upon that subject, so far as it was applicable to the circumstances ofthat colony." Justice Story went on to count the corporation sole asamong the "general rights" of the Episcopal Church "growing out of thecommon law. After the revolution, "the Episcopal Church no longerretained its character as an exclusive religious establishment," but theSupreme Court still recognized the rights of the parson as a corporationsole to continue in full force.

After the Declaration of Independence, early case law indicated that thecorporation sole lived on. "However, sometimes it was found in its purecommon law form, other times in a variant form." In New England, title tothe real property of territorial parishes was occasionally vested in theresident clergyman. In the South, the Episcopal glebe was usually held bythe minister-in-charge (whatever his title), just as in England. "The mostnumerous group of private corporations in the colonies comprises thosewhich were concerned with religious worship."

The corporation sole, however, applied only to the clergy of the churchesthat were or had been legally and formally established. In another earlyopinion written by Justice Story, the Supreme Court voided a royal grantof land to the Episcopal Church in New Hampshire. The decision wasbased on the grounds that no one was legally competent to accept title,since that state had never had an established church, even in colonialdays."

The link with church establishment sealed the fate of the common lawcorporation sole in America. The first amendment technically did notrequire states to disestablish a church. By implication, however,establishment was doomed by the Bill of Rights and without religiousestablishment; the rights of establishment were moot.



The civil form of the corporation sole never really took hold in the UnitedStates. The king was the most obvious civil corporation sole in colonialdays. After the Revolution, however, only a few minor officers in somestates were accorded a corporate identity probate judges and townsupervisors."

The governor of a state was regarded as a corporation only in Tennessee.For the most part, the powers and duties of public officers wereadequately defined by statute. Incorporation was not necessary toguarantee bonds or contracts, or to continue lawsuits. Beginning in thefirst half of the nineteenth century, however, new social and religiousforces gave a revived impetus to the sole corporation. The chief thrustcame from a most unlikely source. When John Carroll was chosen as thefirst Roman Catholic bishop in the United States in 1789, gaining securetitle to the property of his church in the various states and territories wasone of his most pressing tasks. This task was by no means easy.

Roman Catholicism had no legal standing in England and its position inthe new nation was awkward. Although Catholicism shared the fruits ofthe first amendment, it had a structure that many Americans judged tobe autocratic and monarchical. At that time, congregational ownership ofchurch property was natural to many denominations in America, but wascontrary to long-established Roman Catholic policy.

Sometimes, for want of a better method, church property was held in feesimple by the local priest or by a pious layman. This system, however, ledto endless difficulty. There was a constant fear that church property heldin a private name might be claimed by a relative of the holder. Worse yet,the possibility existed that some unworthy claimant with a plausible storycould make out a case for ownership. In one lawsuit, an unfrocked priestclaimed to be heir to land that a deceased predecessor had purchased tobuild a church.

Bishop Carroll won that suit, but for the next seventy years the RomanCatholic hierarchy struggled to find a legally sufficient and canonicallysuitable manner for its church to own property. Vesting title in a board ofelected or appointed trustees was one obvious possibility. In fact, that isthe way Carroll originally incorporated in Maryland." But "trusteeism"itself became an issue when the trustees in some areas used theirproperty ownership to pressure the bishops in doctrinal or disciplinarydisputes."

The internal problems of the Catholic Church were exacerbated andcomplicated by the rise of a national social and political phenomenoncalled the "Know-Nothing" movement In addition to their many otherobjections to Catholicism, these opponents had particular objections tocontrol of church property by the clergy, and strenuously battled thechurch on this issue." The bishops battled back, in what they saw as adefense of the doctrine and practice of their religion against bigots on the



outside and recalcitrants on the inside. Over time, the corporation solebecame a major weapon."

Beginning in 1829, a series of national bishops meetings was held toaddress the problems of Catholicism in America. Invariably, propertyproblems were on the agenda. Soon after the first of these gatherings,Archbishop Whitfield of Baltimore sought a charter in the form of acorporation sole from the Maryland General Assembly. In 1832, it wasgranted."

The link between Roman Catholicism and the legal concept of acorporation 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 thoughbishops of dioceses have great autonomy in church law, favorable actionby a board of consultants is still required on major property decisions tothis day.

As Roman Catholicism spread geographically and grew in numbers in thelast decade of the nineteenth century, new dioceses were created as newareas of the country were settled. Where they could, the bishopsincorporated as a corporation sole. In some states, this required a privateact of special incorporation; in others, a general incorporation statute wasutilized.

The effort was not successful everywhere. On at least one occasion, alegislature defeated a bishops request for sole incorporation on thegrounds that Catholicism would thus acquire a legal right not held byother religious denominations. Slowly, Roman Catholics won the battle fortheir church to be incorporated in a manner consistent with church polity.During this struggle, the old common law corporation sole was graduallytransformed. 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 fora corporation sole. The common law was not invoked to create solecorporations in states where the legislature had not acted. Finally, at thebeginning of this century, the Supreme Court, in an opinion by JusticeHolmes, confirmed what was already an almost universal judicial stance:Apart from statute the law does not recognize the bishop as a corporationsole.

The transformation of the corporation sole from its common law form to alegislative 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. Momentumto secure the property rights of the Roman Catholic Church a century agoleft permanent traces in modern American law. Today at least thirtystates have a corporation sole in one form or another.

IV. The Corporation Sole in Statutory Form

Seventeen states explicitly recognize the corporation sole under statutorylaw, often in a special section for nonprofit corporations or in a section onreligious societies. At least eight other jurisdictions have at least onecorporation sole created under special or private charter, sometimesdating to a time before the passage of a general incorporation statute.

To understand the corporation sole under both of these categories, amethod of analysis will be useful. For states that recognize thecorporation sole under general law, Californias statutes can serve as acomparative model. For the states with special or private acts ofincorporation, Marylands private charter for the Archbishop of Baltimoreis a useful example.

The California legislation dates to 1877 and comprises part 6 of the titledivision on nonprofit corporations. Some sections are technical, and relateto filing provisions, applicability to corporations organized prior to theimplementation of the law, and procedures for voluntary dissolution. Thekey sections are those dealing with who may incorporate, the corporatepowers, and the questions of vacancy and succession.

The California statutory system indicates that a corporation sole may beformed by a bishop, chief priest presiding elder, or other presiding officerof any religious denomination, society, or church. The corporate powersspecified 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 mattersand proceedings whatever.

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

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

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

(e) Receive bequests and devises for its own use or upon trusts to thesame 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 ofcontinuing operation during a vacancy in the office. California deals withthis issue in two ways: 1) at the time of incorporation, the manner offilling a vacancy is to be specified," and 2) the law makes clear that thecorporation 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 comparisonwill be useful. The common law or "old" corporation sole applied to someunspecified officers, and not to others of similar origin. The statutory or"new" corporation sole, in contrast, applies to those who are designatedat the time of their incorporation. The old corporation sole was "inabeyance" at the time of a vacancy, whereas the new corporation solecontinues through temporary agents. The old corporation sole could holdtitle to real estate only, and alienation of the property was difficult andlegally questionable. The new corporation sole has the same power overits property as any other corporation, and is not limited in the type ofproperty it can own. In short, the new statutory corporation sole removesthe vagaries of the old.

Private charters have a parallel history and similar content The Marylandlegislation incorporating the Archbishop of Baltimore dates to 1832. Thelaw permits church property held by trustees to be deeded to theArchbishop and his successors. However, such property is limited to twoacres, 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 acreagedesignation was enlarged to five acres, and "school house" was added tothe list of uses." Up to this point, the Maryland law did not mention thealienation of property. A later amendment, in 1874, granted the power"to dispose of, lease, sell and convey from time to time to the sameextent, [as] any private person or other corporate body."

Two subsequent amendments completed the law. In 1894, the restrictionto real property was removed. The Archbishop, as a corporation sole, wasgiven the power to exercise rights over property "real, personal or mixed.Finally, in 1927, the acreage restriction was completely removed. Thisoriginal 1832 legislation, with its four amendments, remains the charterof the Archbishop of Baltimore as a corporation sole. No further changecan now be made, because the Maryland code prohibits the GeneralAssembly from amending the charter of a religious corporation even if itwas previously incorporated by special act. Furthermore, the code nowcontains modern provisions for subsidiary or separate Roman Catholiccorporations.



The contrast between the California and Maryland laws is very apparent.The California legislation consists of more formal and highly structuredgeneral statutes, whereas the Maryland private charter is rather informal,the product of patchwork amendment. The California code carefullyestablishes a process for creating or dissolving a corporation sole,whereas the Maryland law barely goes beyond the simple statement thata corporation is deemed to exist. Clearly, the general statutes represent alater stage in the evolutionary process.

Although differences exist, the corporations sole created under generalcorporation laws and those established by special acts or private chartershave several common features. They both deserve to be classified underthe heading of "new" or "modern" corporations sole, because both aremore than merely modes of holding title to property. Both are meant toprovide a framework for the operation of a continuing concern. They arealso both meant to provide a structure for the planning, financing,direction and management necessary for an organization existing andworking in a sophisticated business environment.

The Achilles heel of the "old" corporation sole was that the corporationitself was a person holding an office. When the incumbent died, thecommon 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 thecorporation is not strong enough to compel us to ignore the naturalpersonality of the sole incorporator. The office has not been completelypersonified if the death of the officeholder can cause such a deadlock.

The modern corporation sole, created under legislative auspices, solvesthe succession problem quite satisfactorily in one of two ways. Either aspecified structure of continuing operation is created in statutes, as inCalifornia, or the statutes specify some external set of canons, practicesor rules to deal with an interregnum, as in Maryland.

The fact that the modern American corporation sole works satisfactorilyis, perhaps, best illustrated by the relative absence of recent casescarried to the appeal level. Corporate structure is seldom at issue, but thecases tend to run the gamut: torts, contract, civil procedure, piercing thecorporate veil, workmans compensation, taxation, eminent domain,estates and simple fraud. Property disputes are relatively rare, perhapsbecause there would be first amendment implications for mostcorporations sole.

The corporation sole seems to have a settled existence. There has beenno rash of new legislation, nor have there been any repeals of earlierlaws.

V. Special Circumstances



Eight additional states have circumstances meriting comment. Theconstitutions of Virginia and West Virginia specify that no charter ofincorporation can be granted to any church or religious denomination. Atleast one commentator attributes this prohibition to the influence ofThomas Jefferson and James Madison. Although the tradition of church-state separation in Virginia may indeed be traced to the two formerpresidents, the constitutional provision in Virginia dates to 1851 longafter the deaths of both.

The West Virginia courts have acknowledged that the provision in thatstate is descended from Virginia. While these constitutional provisionspose no problems to the titles of church property in either state, theyobviously preclude a corporation sole. An article in the Kansasconstitution, which required title to property of religious corporations tobe vested in elected trustees, was repealed in l974.

Connecticut has a provision in its corporation code that gives the localarchbishop or bishop special powers in trust if a Catholic parishcorporation violates or surrenders its charter. The courts have interpretedthis provision to mean that, if a charter is surrendered, all the propertyvests in the bishop and his successors, as a corporation sole. This sectionprovides emergency powers that are not normally required.

Oklahoma allows for trust succession in the name of an ecclesiasticaloffice. Vermont, in contrast, specifically forbids any such succession.

Finally, case law in Arkansas and Florida also deserves attention. TheSupreme Court of Arkansas, in dicta, has recognized the Roman CatholicBishop of Little Rock as a corporation sole without any special act of thelegislature. The Florida situation is even more unique. The Supreme Courtof Florida has repeatedly held that the common law corporation sole is infull force in Florida. The court relies on the fact that the common law hasbeen adopted in Florida and remains in force unless expressly or impliedlyrepealed by organic or statutory law. This unique position initiallyattracted journal comment, perhaps because it seemed contrary to theearlier United States Supreme Court position.

VI. A Federal Corporation Sole

Only rarely has there been mention of a federal charter for a religious orquasi-religious organization. When Congress voted, in 1811, toincorporate an Episcopal church in the District of Columbia, PresidentMadison vetoed it in his veto message, the President implied that acharter of incorporation was in some sense an approval of a religion, inviolation of the Constitution.

More than a century later when incorporation was so common, theCongress and the President took another view. In 1948, the Vaticancompletely severed the Archdiocese of Washington from the Archdiocese



of Baltimore. The new Archbishop of Washington, with the help ofPresident Truman, sought to have a corporation sole established as aframework for the new ecclesiastical territory. Congress complied bypassing a private law that established the Archbishop of Washington andhis successors as a corporation sole.

VII. A Yet More Modern Form?

A number of authorities warn against confusing the corporation sole withthe modern "one-person corporation." In fact, courts have held that astock 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 away that it closely resembles a corporation sole in operation. In fact, theRoman Catholic Diocese of Wilmington is so structured under the generalcorporation laws of Delaware. The Wilmington diocese is not incorporatedunder the terms of the Delaware Code for Religious Societies andCorporations. Rather, the diocese is incorporated under the GeneralCorporation Law, which already contains provisions for a board of one, fornon-stock operation, and for formation of a close corporation. By carefullywriting the by-laws, and by addressing the problems of succession, theRoman Catholic Diocese of Wilmington has fashioned a corporation thatcontains all the advantages of the corporation sole in a state that has noregular provision for one.

Summary

From its quaint beginnings in English law, the corporation sole hasestablished a modest, yet solid, foothold in the United States. Tochurches with a hierarchical structure, and particularly to the RomanCatholic Church, it has been a secure method for both ownership ofproperty and daily operation. In a society characterized by religious andethnic 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 itsnative land. The corporation sole is destined to be a continuing part ofAmerican law for years to come.

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