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.
King of England
Bishop of the Church of Rome
Church of Rome
Office of the President of the Church of Jesus Christ of Later-day
Office of the President
Church of Jesus Christ of Latter-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.
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.
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
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
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
§ 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.
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.
In United States vs Seeger, 380 U.S. 163 (Supreme Court 1965),
we find the Court addressing the concept of יתןת and religion and holding
that the test of belief in יתןת (they 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 יתןת of
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
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:
2. Operate, and
...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
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.
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
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 יתןת and
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.
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 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 יתןת and His Law and Word (in this case we are
considering the turn toward יתןת and 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.
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 יתןת which 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
(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
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.
(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
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
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
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: §
exempts as well "the exclusively religious activities of any religious
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.
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."
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.
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
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."
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".
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
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
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 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
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
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
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."
Blackstone begins his treatment of corporations with the following
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
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
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
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
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
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
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
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
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
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
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
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
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
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.
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.