More about the Corporation Sole

What is a Corporation Sole?

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. Black's Law-Sixth Edition

Aggregate and sole. A corporation sole is one 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 a bishop, so are some deans distinct from their several chapters, and so is every parson and vicar. Black's Law-Sixth Edition

History

During the Reformation period in Europe (1500-1550), the Church of England was in desperate financial straights. What got them into this difficulty has all but been disregarded by History text of this time-period lest it embarrass the Church and the English Crown.

The Bible had just recently been put to print. Only Churches and the nobility owned copies, due to the extremely high cost of paper. The handwritten versions were outrageously expensive, procurable only by those with extreme wealth: Churches, Crowns and the nobility.

The freemen of the realm, primarily the tradesmen, were un-sworn and un-allieged. The market for the Bible was not the wealthy, they already had a handwritten copy, nor was it the tenants, they were far too poor to make the purchase. The market was the tradesman - and the book was still so costly that it took the combined life savings of siblings to buy a family Bible. The other reason was that Tradesmen were the Market. They had been taught to read as part of their apprenticeship; other than the families of the super-rich, (and the priests) nobody else knew how to read.

These men were overwhelmed when they read Ya'shuah (commonly mistranslated as Jesus) command against swearing oaths in Matt 5: 33-37 and at James 5:12. This was news to them. For well over a millennia they'd been trusting that the Church - originally just the Church of Rome, but now also the Church of England - had been telling them everything they needed to know in that book. Then they found out that Ya'shuah said, "Swear no oaths." Talk about a revelation.

Imagine seeing a conspiracy revealed that went back over 1000 years. Without oaths, there would have been no tenants laboring in the fields for the nobility and receiving mere subsistence in return. The whole society was premised on oaths; the whole society claimed it was following YHVH (God) yet it violated a very simple command of Messiah! In addition, the tradesmen had done it also, by demanding sworn contracts of indenture for apprentices and giving their own oaths to the guilds. They had no way of knowing Ya'shuah prohibited oaths! They were angry, "livid" might be a better term. The governments had seen this coming, but what could they do, ban the book? The printing would have simply moved underground and the millennia long conspiracy would be further evidenced in the banning. They came up with a better scheme.

In an unprecedented display of unanimity, the governments of Europe adopted a treaty. This treaty would allow anyone the State-right of founding a Church; considered a State right. The Church would be granted a charter. It only had to do one very simple thing to obtain that charter. It had to assent to the terms of the treaty. Buried in those provisions, most of which were innocuous, was a statement that the Church would never oppose the swearing of lawful oaths. Ya'shuah said, "None." The Churches all said (and still say), "None, except . . ."

The tradesman left the Church of England, but with every new "reformed" Church still opposing the clear words of Messiah, there was no Church for them to join - or found. They could not establish a Church, which followed Ya'shuah's words, for that would have required assent to that treaty which opposed what Ya'shuah had commanded.

With the huge membership losses from the Anglican Church - especially from the men who had been the more charitable to it in the past - the Church was technically bankrupt. It was not just the losses from the tradesman; other people were leaving to join the new "Reformed Churches." Elsewhere in Europe, the Roman Catholic Church had amassed sufficient assets to weather this storm. The far newer Anglican Church had not.

The Anglican Church, as an agency of the State, cannot go bankrupt. It becomes the duty of the State to support it in difficult times. Parliament did so, they enacted a tax, a nice religious tax and by current standards a very low tax of (10%). Nevertheless, Parliament made a deadly mistake in that the Quakers, primarily as tradesmen, recognized this income tax as a tax "without jurisdiction", at least so far as they went. As men Un-sworn and un-allieged, they pointed out that they did not have to pay it, or provide a return. Absent their oaths establishing this servitude, there was "no jurisdiction" and they were right. Despite laws making it a crime to willfully refuse to make a return and pay this tax none were arrested or charged.

That caused the rest of the society to take notice. Other folk who had thought the Quakers "extremists" suddenly began to listen to them. These men were keeping all they earned, while the rest of the un-sworn society, thinking this tax applied to them, well; they were out 10%. The Quaker movement expanded significantly, that proof once evidenced in the marketplace. Membership in the Anglican Church fell even further, as did charity to it. The taxes were not enough to offset these further losses. The tithe tax was actually counterproductive to the goal of supporting the Church.

If the movement continued to expand at that current rate, no one in the next generation would swear an oath. The Church of England, what assets it possessed, would need to be sold-off, with what remained of that Church greatly reduced in power and wealth.

Unlike the Roman Catholic Church, the clergy of the Anglican Church were permitted to marry and raise families. The entire congregation even the Vicars and Bishops had been charged this religious tax to support the Church. The hierarchy of the Church in agreement with the King permitted the clergy to take vows of poverty like the Catholic clergy in order that they became exempt from taxation of their incomes. The fact that the clergy were exempt from the tax did not set well with the congregations so the concept of Corporation Sole was established.

The Corporation Sole permitted the Bishop and the Vicar of the Church to become a Church -- making all income and property of the Clergy technically belonging to the Church. That concept in place the clergy's tax exemption status was more palatable with the people. The benefits were enormous to the clergy, in-that probate was avoided upon the death of the Bishop or Vicar and the next in bloodline became the Corporation Sole (Church)---all accumulated property at the disposal of the next Corporation Sole and their families in perpetuity. Many common people also became a Church under the Corporation Sole law. Most out of religious conviction, but the tax exemption was taken advantage of also.

Applocation in Common Law Today

In early American History, the Patriarch of every household was legally considered the Overseer of a common-law Corporation Sole. In analyzing the historical context, it would appear that the U.S. Constitution's prohibition against "corruption of blood" is the legal foundation and support for this concept. No law can restrict the right, for the children to inherit the fruits of the parent's labor.

This is identical in context 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.

The American founding fathers considered the family the basic religious unit of society. As a Corporation Sole, we are acting as a fiduciary for our grandchildren and the family property is not ours, but belongs to the Church and the family benefits by using the property as if it were their own, in the furtherance of the stated mission of the Church. A Corporation Sole is a private Religious organization; it is not controlled by statute, however, it does interface with statutory law and recognized by most State governments.

Your Corporation Sole can make application for a UBI number, pursuant to 26 USC §508 of the Internal Revenue Code and is exempt from taxation pursuant to §1341 (Exemption by right). With that number, it can contract, open bank and checking accounts. The Corporation Sole permits the individual a greater degree of privacy in their personal affairs; combined with religious convictions, which are in conflict with present day statutory law to still function with relative ease within our society. A Corporation Sole consists of one incorporated office and provides for a succession of office holders with no board of directors, no shares, no bylaws and no other offices.
This form of corporation grew out of a need for the Church of England and the Roman Catholic Church to find an orderly and secure way to hold and pass title to Church property and protect the clergy's personal assets. The modern Corporation sole is the result of 450 years of common law experience. It is extremely rare that a court action involving a Corporation sole will be prosecuted because the concepts have been tested for centuries and most all defects have been corrected.

Why use a Corporation Sole?

The Corporation Sole is a legal entity that can hold property and protect that property from liens, levy's, seizures and confiscation due to the personal actions of the individual. This includes all assets, including homes, boats, automobiles and other such property. When a Corporation Sole possesses property, it is as if the Church owns it --- not you personally. You are the Overseer or Administrator of the property. Only and upon your death, your successor would then manage the property of the Church. This is similar to a Bishop, or other heads of organized religious groups; all assets will be owned by the Corporate Sole and will pass on to your family without probate or taxation.

This structure is without inherent disadvantages of other corporations and entities. Law incorporates Corporation Sole in order to give it legal capacities and advantages that other corporations do not enjoy (i.e. operational rule and statutory regulations). The government cannot dictate how a Corporation Sole is to operate, so it acts with limited government interference.

Is a Corporation Sole a Legal Entity?

Corporations Soles to be formed for the purpose of acquiring, holding, and disposing of Church or religious society property for the benefit of religion, for works of charity and for public worship and of property of scientific research institutions maintained solely for pure research and without expectation of pecuniary gain or profit. This description is found in many State statutes.

Some States specifically recognize Corporation Sole, but do not permit statutes to be written regarding them because of the first amendment prohibition against government making laws respecting an establishment of Religion or prohibiting the free exercise thereof. There exists explicit statutes in seventeen states that describe Corporation Sole; there are functioning Corporation Soles in over half of the states because of the rule of comity.

A Corporation Sole is registered as a religious society, with the Secretary of State of your State and the County recorder's office. The Corporation Soles mission maybe education, medical services, legal services or whatever the religious society decides is a worthy endeavor in its Articles.

Benefits of Corporation Sole

Upon recording ownership of the property as a Church, the Corporation Sole is entitled to all the consideration of other Churches and religious societies. The Church may buy, hold, and sell property (real and personal) with complete tax immunity. There is absolutely no statutory limitation on how much money may pass through the Church or religious society. Corporation sole can be responsible to provide for all your needs (i.e. shelter, food, transportation, clothing, medical, etc.)

This occurs by first conveying all that you own and all future earnings to the Corporation sole. You make a record, by recording a vow of poverty. This lets the world know that you are now a pauper and own nothing. If you work for someone or company you do so on behalf of the Corporation Sole. None of these earnings are taxable because they are paid directly to the Corporation Sole. These payments are made without deductions, diminishments or taxes of any kind. You do not become an independent contractor. One feature of religious societies is that they can accept vows of poverty by their members (i.e., monks, nuns, priests and Overseers). The IRS recognizes these vows of poverty. When one is under a 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 in a fiduciary capacity to the Corporation Sole in the furtherance of the stated mission of the Church. Thus, when you see a Catholic Bishop chauffeured in a stretch limousine, he is still under a vow of poverty, recognized by the Internal Revenue Service and not questioned or harassed by the government. Virtually, all Catholic dioceses are structured as Corporation Sole.

Establishment of a Corporation Sole

To form a Corporation Sole a Church official (Secretary), is elected or appointed in conformity to the Church Constitution, Cannons, or Articles. There are states, which have statutes that require a Church Seal; in addition, they specifically provide for ownership of property in any state or any foreign country. It provides for smooth, tax-free transfer of title property. You will be provided with a nine digit Federal Identification Number to open a checking account for the Corporation Sole. However, because you will be the signatory for the Corporation Sole, some banks require your personal Social Security Number to verify through the Banking Commissioners office, assurance that you personally have not been involved in banking or checking fraud within your state. You will find that not all banks require your SSN#. You may give it to them or refuse and go to another bank if you wish. It is not mandatory by law for them to require it, this it is strictly a policy of the bank you choose. Title 5 USC §552 (a) prohibits the bank from denying you a privilege or a benefit for not revealing your Social Security Number. Many Banks have been successfully sued for denying that benefit.

Normal legal procedure when a Corporation Sole finds itself in court is for the Holy Bible, (1611 King James (version), (non-copy write) Constitution, Canons, or Articles and Charter of the Church, replace the state statutes and rules of court. If a Church regulation covers a particular situation, the Church regulation takes precedence over the state statute, rule or procedure. Since the government has no power over any Free Church, all enforcement procedures must use the rule of the Church! That being the case the Articles of Corporation Sole should be expansive enough to deal with the above legal requirements. 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 in the Overseer's fiduciary capacity. Corporation sole is required to maintain meticulous records of dealings as a matter of solid management directorship. However, it is charged with never divulging those records.

Most Catholic Dioceses consist of many Corporation soles by one incorporated office of a Bishop. Each building or automobile may be in its own corporation. The reason is purely to limit insurance liability. Pure Trusts can be used in tandem, which are owned and controlled by the Corporation Sole.

There are no annual renewal fees for the Corporation Sole, as there are with most Trusts and other type corporations. Future expenses will include only the cost to the county recorder every time another person replaces the person occupying the office of Overseer to the Corporation Sole and your annual retainer paid to your Registered Agent. The name that you use is important, it will describe the organization and the visions that you have for your Corporation Sole. A name should reflect an image of your intent with the use of Fellowship, Brotherhood, Services, Alliance, Ministries, Center, Awareness, Health and/or a name that would be used to describe the following titles; Church, Synagogue, Mosque or a name related to the religion practiced in them. NOTE: Do not use your personal name.

Applying for permission for exemption under 26 USC §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, 26 USC §508.

The Corporation sole is by nature a form of limiting liability within the assets of the Corporation. The Washington statutes on Corporation Sole 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 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 within the taxing statutes. In addition, 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 donating to the sole. You may use other tax strategies for lowering the tax bite. Corporation sole can be engaged in any lawful occupation, business or profession. All earnings from the lawful endeavors are exempt from income tax. In fact, no state or federal tax returns are filed.

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), the "corruption of blood" provisions of the United States Constitution no longer protect property. The Corporation Sole has worked well for over 450 years and there is no reason to suspect that it will not function the same way for you and your family.

Case Law Analysis on Corporation Sole

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, and 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 corporations' sole.

The corporation sole seems to have a settled existence. There has been no rash of new legislation, nor have there been any repeal of earlier laws. Most legal disputes involving a corporation sole would be simple torts resolved in insurance settlements or at the trial level. There may also be reluctance for potential plaintiffs to sue an officer of a church or for officers of a church to permit disputes to go to trial.

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 in-deed 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 1974.

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 required.

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 compelling. 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.

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 corporation sole.

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.

Summary

From historical beginnings, with King Saul and King David, Corporation Soul has had many transformations. From its quaint operation 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. Most dioceses today incorporate each parish and institution separately to limit insurance liability. The corporation sole thus becomes a holding company with multiple subsidiaries. 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.

Belief Systems and Corporation Sole

I do not now nor have I ever endorsed or encouraged any type of tax evasion. I believe that if you owe a tax, you should pay it. I also believe that if someone DOES NOT OWE a tax, they should not be forced or coerced into paying any amount to someone against their free will. One truth is self evident; you cannot be taxed on assets you don't own, and you cannot be taxed on income that is not yours.

"Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes." Helvering v. Gregory, Federal Reporter, 2nd series, Vol. 69, Page 810 (1934)

Everyone should know and operate within the law; you should also know your rights, and assert them.