Here is an article in part from http://ecclesia.org/truth/501-church.html which goes into great detail on the situation the brick and mortar church finds itself in… the true Church of God is obviously the collective Body of True Believers.
The Truth About Church Incorporation
[Note: In this article, the word "Church" does not refer to any physical building, but refers to the whole body of believers in Christ. The word "church" is translated from the Greek word ekklesia, which literally means "assembly" or "congregation" of people; it does not refer to any physical building. Keep that in mind when reading this article]
Joshua challenged the people: “choose you this day whom ye will serve.” (Joshua 24:15). Today, government is demanding a similar choice. Today the world assumes that the church is the church because it is registered with, and defined by, the State.
The following is intended merely to provide an overview, an introduction to the whole issue of the Church and incorporation. In addition, its purpose is not meant to be a criticism of the many well meaning Christian men and women who have laboured for the Lord in these matters, but simply as a supplemental guide for the avoidance of “rendering unto Caesar” that which is not and should not be his. We shall endeavor to explore the relationship between, churches and corporations.
So what exactly is incorporation? What really happens to a church that becomes incorporated? Are there biblical principles against incorporation?
First of all, let us define the word “corporation.” In the strict everyday definition of the word, a corporation is “a group of people combined into or acting as one body.” This word is derived from the Latin word “corpus,” which means “body.” In this sense, the Christian Church is indeed a corporation. It is the “corpus Christi,” the “Body of Christ.” It derives its existence and authority from its Head, the risen and victorious Son of God. It is comprised of individual members who have covenanted together to further Christ’s Kingdom by the preaching of the Gospel and the discipling of the nations (Matthew 28:19-20).
Christ is Sovereign over his Church
The Church’s “corporate status” is well-established in Scripture: Matthew 16:18, 1 Corinthians 12:12-14, 27, Ephesians 1:22; 5:23b, 30, Colossians 1:18; 2:19 teach that Christ is clearly the head of the church, and we are all members of his body.
The Church is the visible manifestation of Christ’s Kingdom on earth. However, as Jesus Himself stated, “My Kingdom is not of this world” (John 18:36). Many Christians have misunderstood this verse to mean that neither the Church nor individual Christians should involve themselves with the affairs of the world. In what is known as “pietism,” a false dichotomy is erected between the “spiritual” Kingdom and the “carnal” world.
Of course, this is not what Jesus had in mind at all. He very explicitly stated elsewhere that Christians are to act as the “salt” of the earth and as a “light” in the world by permeating society and working to change it from within (Mat.5:13-16). This task of dominion is accomplished through the work of evangelism and discipleship, as Jesus commanded in the Great Commission. The Christian’s purpose is indeed “worldly,” insofar as it is involved in bringing the world into subjection to the Word of God (2 Cor.10:5).
Thus, the true meaning of Jesus’ declaration that His Kingdom is “not of this world,” is that it does not derive its authority and power from the world or its institutions. The Church is indeed a spiritual organization, but this simply means that it is “of the Spirit”– it relies upon the Holy Spirit and the inspired Word for its existence, not upon the efforts or laws of men. This important detail should be kept in mind as we further study the subject of church incorporation.
The State is Sovereign over its Corporations
Having briefly examined the biblical definition of a corporation, let us now look at the legal definition of a corporation. According to the U.S. Supreme Court:
1. “A corporation is a creature of the state. It is presumed to be incorporated for the benefit of the public. It receives certain special privileges and franchises and holds them subject to the laws of the state and the limitation of its charter. Its powers are limited by law. It can make no contract not authorized by its charter. Its rights to act as a corporation are only preserved to it so long as it obeys the laws of its creation. There is a reserved right in the legislature to investigate its contracts and ascertain if it has exceeded its powers” (Hale v. Henkel, 201 U.S. 43).
2. “[A corporation is] an artificial person or legal entity created by or under the authority of the laws of a state. An association of persons created by statute as a legal entity…. The corporation is distinct from the individuals who comprise it (shareholders)…. Such an entity subsists as a body politic under a special denomination, which is regarded in law as having a personality and existence distinct from that of its several members.” Black’s Law Dictionary West Publishing Company, 1991; 6th Edition, page 340.
3. “A corporation derives its existence and all of its powers from the State and, therefore, has only such powers as the State has conferred upon it. Power is used here to mean the legal capacity to execute and fulfill the objects and purposes for which the corporation was created, and the source of this power is the charter and the statute under which the corporation was organized.” Len Young Smith and G. Gale Roberson, Smith and Roberson’s Business Law, West Publishing Company, 1966, page 796.
Note: A corporation is created by, and derives its existence from, the State. In contrast, the church is created by, a creature of, derives its existence from, subject to, and obeys the Law of, Jesus Christ.
4. “Corporate existence is a privilege granted by the sovereign upon compliance with specified conditions” Len Young Smith and G. Gale Roberson, Smith and Roberson’s Business Law, West Publishing Company, 1966, page 931. .
5. “Corporations are not citizens…. The term citizen… applies only to natural persons… not to artificial persons created by the legislature” Paul v. Virginia, 8 Wall. 168, 177; see also the Opinion of Field, J., in the Slaughterhouse Cases, 16 Wall.36,99.
Note: God teaches that Christians, his church, are citizens of the household of God (Eph.2:19, Phil.3:10).
6. Every corporation has obtained a charter from the State of Incorporation. This charter is simply permission to exist given to the corporation, without which, its operations would be considered illegal. In addition to the charter are the articles of incorporation: “The objects or purposes for which a corporation is formed are expressly stated in its articles of incorporation, which delineate in general language the type of business activities in which the corporation proposes to engage” Smith and Roberson’s Business Law, West Publishing Company, 1966, page 798.
Note: Is the church of God involved in any type of business activities? (Matthew 21:12, John 2:16).
7. “Instances of non-profit corporations are educational institutions, athletic clubs, library clubs, fraternities, sororities, hospitals, and organizations which have exclusively a charitable purpose” Smith and Roberson’s Business Law, West Publishing Company, 1966, page 789.
The reader will notice that “churches” are conspicuously absent from this list of non-profit corporations. That is because our law-makers are fully aware that incorporation involves creation, and the Church simply cannot be created by the State. Furthermore, the Church’s ordained purpose of preaching the Gospel can never be illegal, so no special license is required from the State to do so.
Though not all of our founding fathers were genuine Christians, they nevertheless understood that the Church of Christ is under the sole jurisdiction of its Lord, and that the civil magistrate therefore should not dare to encroach upon that authority. Because of this healthy respect for the Church, the very first sentence of the Bill of Rights reads as follows:
“Congress shall make no law regarding an establishment of religion, or prohibiting the free exercise thereof” (U.S. Constitution, First Amendment).
According to Supreme Court Justice Hugo Black: “The establishment clause of the First Amendment means at least this: Neither a state nor the federal government can set up a church” Everson v. Board of Education, 1947).
It was one of the principles of the sixteenth-century Reformation that the Church and the State are separate governments, and that, although they are to work together for the furtherance of God’s Kingdom, they are not to either merge with one another or usurp the sphere of authority of one another (Westminster Confession of Faith, Chapter XXIII:3) The Church is forbidden by Scripture to take up the State’s “sword” (Romans 13:4), and the State is likewise forbidden to assume the Church’s “keys” (Matthew 16:19). However, as we will see, the latter is precisely what occurs whenever a church seeks incorporation at the hands of the State.
The Truth needs to be presented to those attending 501c3 churches and then they can make the individual choice to “come out of her’ or not.