APPENDIX

The steps in this section must be completed in the order given. The information or documentation received in each step will be required to complete the next step. The exceptions would be the Music Copyright Approval and Insurance, which can be done at any time, but should be completed prior to the first service.
A WORD OF WARNING When incorporating, do not use Calvary Chapel in the church name until the church has been added to the Calvary Chapel Affiliation List.

Establishing the Corporation
A church is not compelled to incorporate as a nonprofit religious corporation, but it is strongly recommended. If you do not incorporate you must open your bank account as a d/b/a. In other words the account would be in the name of John Doe doing business as Calvary Chapel. John Doe is not tax exempt from sales tax, property tax or any other privilege that is available to a nonprofit corporation. Since the congregation makes donations to Calvary Chapel, which is a DBA and not a nonprofit corporation, their tithes and offerings are not deductible on their Federal Income Tax. Incorporation is a method by which individuals unite for a common purpose and thereby acquire certain advantages and protections. With these also come certain responsibilities.

To establish a corporation three incorporators must file with the Department of State in the state in which the church is located. Once the corporation is established a Board of Directors will be formed. The incorporators may become directors. See the Board of Directors section for the role that the Board of Directors plays in the formative stage of the church.

The documents of incorporation are the Articles of Incorporation and the Bylaws. The Articles of Incorporation state the name and purpose of the corporation. The Bylaws specify the rules used to manage the affairs of the corporation. Appendix 1 is an example of the Articles of Incorporation proceeded by a document from the state acknowledging the filing of corporate documents and the document number. Appendix 2 is a sample set of Bylaws. Each will need to be read carefully and modified to meet the needs of your church. Contact the Department of State for the state in which your church is located to request the necessary forms to establish a nonprofit corporation. Several states have the forms available on the Internet.

Applying for a Federal Tax ID Number
One of the first things that you should do is request a Federal Employer Identification Number. A Federal Employer Identification Number (EIN) is a nine digit number used to identify your church. You must file IRS Form SS-4 "Application for Employer Identification Number" (Appendix 3).

Opening a Bank Account
Open an account at a local bank as soon as your corporation is established. The bank will require your approved Article of Incorporation and Federal Tax ID Number (EIN) to open the account. It is important to establish an account prior to your first service so that you have a place to put all monies donated to the church.

Obtain Insurance as Appropriate for Your Church
Whether you own or rent the facility where you hold church services, you need insurance. There are insurance companies that specialize in insuring churches and their policies are tailored to meet the needs of churches.

• If you own the facility you need a basic hazard policy to cover the building and contents, including liability coverage and medical coverage. You may consider supplementing this with an umbrella (excess liability) policy for $1,000,000 of more. You may need additional coverage for flood, wind storm or any other specific coverage that is appropriate for your area..
• If you rent on a daily basis you need insurance for liability in the event someone is injured during a church sponsored function. You also need contents insurance for church equipment used in your ministry. Computers, office equipment and sound equipment are expensive
• If you lease a property your lease will specify who carries the insurance on the building, how much and what type. In any event you need liability, medical coverage and contents insurance.

Conforming to Music Copyright Laws
All music has a copyright which protects the writer or publisher and restricts its use. In order to print the words in your bulletin or display them on a screen you must have the permission of the writer or publisher. This would seem to make printing a song list an impossible task. However, an organization called Christian Copyright Licensing International (CCLI) has made the job easy. By subscribing to their service you have access to approximately 90% of the Christian music currently being used today.

There is an annual fee that is quite reasonable. Since the fee is on a sliding scale based on the size of the church, you must inquire to determine the cost to your church.

Christian Copyright Licensing International
17201 NE Sacramento Street
Portland, Oregon 97230
1-800-234-2446

You must keep one copy of each song sheet because CCLI will audit your usage by requesting a Copying Activity Report periodically. Another option for creating the Copying Activity Report is using SongSelect®. This is a Windows based software application containing a database of 5,000 of the latest songs which is updated periodically. SongSelect® will enable you to create and save your worship lists. It will produce overhead transparencies or bulletin masters. This software automatically tracks copying activity and provides a Copying Activity Report required by CCLI. You can also customize the data base by adding your own songs. For more information call CCLI.