By Elizabeth Gardner

  Chief Justice Marshall of the Supreme Court of the United States of America, in the course of a formal   judicial utterance, thus defined the term corporation:  "A corporation is an artificial being, invisible,   intangible, and existing only in contemplation of law.  These are such as are supposed best calculated   to effect the object for which it was created".  Chancellor Kent of New York, one of the most famous   jurists of modern times, defines a corporation as "a franchise possessed by one or more individuals,   who subsist, as a body politic."  When Chief Marshall quoted this statement concerning a corporation   he was referring also to the 501(c)(3) corporation. 

  All corporations, both for-profit and non-profit (501(c)(3),  are an artificial, separate legal person or entity   created by law and established by the state that is composed of individuals who exist in a body politic.   A corporation is a collection of individuals united in one body by such a grant of privileges as secures   succession of members without changing the identity of the body and constitutes the members for the   time being an artificial person or legal being capable of transacting the corporate/company business   like a natural person in commerce. Corporations are created for trading, selling, exchanging wholesale   or retail merchandising either for-profit or non-profit (501(c)(3).  Because of their legal recognition as   business entities, are the embodiment of State-granted business franchises, merchandising and   engaging in commerce according to the terms of their charter/Articles of Incorporation.    

  The owners of the corporation are known as the shareholders because they are investors in the   business.  The directors/officers serve at the pleasure of the shareholders.  They hold shareholders   meeting as to what the business plans to do.  The shareholders vote on what is approved by them for   the business.  This is done by both types of corporation.  The officers in the 501(c)(3) corporation goes   to the shareholder (the congregation of the church) as to their plans of church, Inc. The shareholders of   the church are then to vote on officer/boards proposal. 

  In order to understand the differential between for-profit and non-profit corporations, a few basic   misconceptions regarding these corporations must be dismissed.  A for-profit as well as non-profit   501(c)(3) corporation is incorporated using a state government legal form called Articles of   Incorporation for corporations. A State Resident Agent is required for both kinds of corporations. An   EIN number must be obtained using Internal Revenue Service tax for "SS-4."  This is needed as a   license, a permit to do business and operate in commerce.  It is used to pay taxes by both the for-profit   and non-profit 501(c)(3) corporations and used to deduct taxes from their employees.  

  They both are run by administrative board and officers, produces goods or services and makes   investments. A non-profit 501(c)(3)corporation hopefully will turn a profit, unlike its name suggests. They   both are required to hold an organizational meeting to elect initial directors, elect officers, adopt Bylaws,   hold stockholders meetings, and take care of other organizational matters.  The owners of the   corporation (the shareholders) enjoy "limited liability"; that is, the shareholders are only liable for the   debts and expenses of the corporation up to the amount of their respective investments in the   corporation’s stock.  However, some state laws may impose liability on the shareholders for unpaid   wages in small corporations.  Additionally, creditors frequently require the majority shareholders to   guarantee the debts of the small corporation or co-corporation’s loans. This is why in the 501(c)(3)   corporation, all the trustees, or board of the church, as they are often called, are required to sign the   deed of the building used for the corporate office.  Generally, both kinds of corporations have the most   flexibility in deducting the costs of providing fringe benefits to employees, which is especially attractive   for employees who are also officers and shareholders. The dividing line between For-profit corporations   and non-profit 501(c)(3) corporations concerns questions of ownership and profit distribution. Stock   Certificates are issued by the corporation as evidence of the ownership by the shareholders of their   respective interesting the corporation. Profits earned by For-profit corporations ultimately are passed   through to the stockholders, usually dividends on shares of stock. Non-profit 501(c)(3) corporations are   not permitted to pass the profits to their stockholders.  The owners (the congregations) of non-profit   501(c)(3) corporations do not receive any portion of the corporation’s profits, as is specified in the   Articles of Incorporation.  Any profits earned must in turn go back to a non-profit activity sponsored by   the organization itself or must be donated to other non-profit corporations.  Because the non-profit   501(c)(3) corporations do not pass the profits to the stockholders, they issue a certificate of shares of   stock usually called a statement of donations/pledges.  Another difference between for-profit   corporations and non-profit 501(c)(3) corporations concerns tax-exempt status.  Generally, tax-exempt   status is not conferred to for-profit corporations and similarly, not all non-profit corporations are tax   exempt.  For a non-profit organization to attain tax-exempt status, it must have all the non-profit   characteristics. The non-profit corporation has extra special rulings of government that a for-profit   corporation does not have to follow, such as no political campaigning. 

  Many of the non-profit 501(c)(3) tax-exempt corporations that exist today were not always conferred with   special status.  Nor should it come as any surprise that non-profit (501(c)(3), tax-exempt corporations   were not the result of extensive legislative planning.  Prior to 1894, any corporation not mentioned in the   Federal Income Tax Code was considered tax-exempt automatically.   In 1894, a two percent flat tax   was imposed on the corporate income which forced lawmakers to define which entities would remain   tax-exempt.  Lawmakers determined that non-profit charitable, religious, and educational corporations,   fraternal beneficiary societies, certain mutual savings bonds, and certain mutual insurance companies   would remain tax-exempt.  These provisions were set forth in section 32 of the Tariff Act of 1894.   Although, the Tariff Act of 1894 was later repealed due to Constitutional challenge, the Tariff Act of 1913   permanently established tax exemptions for those corporations.  Today, Subchapter F of the Federal   Income Taxation Code defines what entities are considered exempt corporations.  Specifically, I.R.   Code section 501(c)(3), which was originally enacted as part of the 1954 Code, permits tax exemptions   for corporations, and any community chest, fund, or foundation, organized and operated exclusively for   religious, charitable, scientific, testing for public safety, literary, or educational purposes….  Like their   counterparts used by in 1894, lawmakers in 1954 used history and cultural trends to define which   groups would attain tax-exempt status under I.R. Code section 501.  With I.R. Code section 501 in   place, it has been up to the I.R.S. and the Treasury to determine which corporations is truly 501(c)   corporations.  Specifically, the I.R.S. distinguishes between for-profit corporations and non-profit,   tax-exempt corporations using both an organizational and operational test. Under the organizational   test, the I.R.S. determines that a non-profit 501 corporations is tax exempt if it’s organized in such a   manner that the Articles of Incorporation outline tax exempt activities; that a substantial part of the   business profits go towards tax exempt activities; and that the assets, upon dissolution, go to other tax   exempt corporations. 

  In 1954 Senator Lydon B. Johnson slipped an amendment on the end of the Ways and Means Bill   approving funds for each agency of the government of this Act as to what they could spend in support to   a political candidate.  This Bill was passed without any public debate by Congress.  The Act of   Congress stated any corporation organized under this Act is an Agency of the United States.  This is   the I.R.C. section 501(c)(3).  It gave the IRS supreme access to the agencies of the 501(c)(3).  I.R.C.   section 501(c)(3) states that 50l corporations incorporated under this section are exempted from taxes.  (c)  Any corporation organized under the 1954 Act of Congress are an Instrument (channel) of the United   States if such corporation, (3) organized and operated exclusively for religious, charitable, scientific,   educational purposes………. What the I.R.C. is saying is that a 501(c)(3) is a business corporation   which is an instrument of the government organized for religious purposes with a privilege of tax   exemption to operate a non-profit business in commerce.  

  If a church is incorporated with a 50l(c)(3) non-profit business franchise corporation, it is an instrument   of the government for religious purposes and for doing business of religion.  Does the forgoing   understanding of a 501(c)(3) sound like the living organism of the Body of the Almighty LORD.  See   essay Church, Inc.