Executive Summary

This white paper examines the landscape of U.S. state-level “sunshine” laws — statutes promoting transparency and accountability of corporate and nonprofit boards — and their applicability to churches. It explores how these laws intersect with churches incorporated in one state but operating and maintaining congregations in another. While religious organizations enjoy broad constitutional and statutory protections, churches that choose to incorporate as nonprofit corporations may subject themselves to certain transparency obligations. This paper reviews the key legal principles, analyzes variations among states including Ohio, discusses how state law defines “members” of a church corporation, and offers guidance for churches on compliance and best practices.

Introduction

Churches in the United States occupy a unique dual identity: they are protected as religious organizations under the First Amendment, but they often organize as nonprofit corporations under state law to hold property, enter into contracts, and limit liability. While most states exempt religious corporations from some reporting and governance requirements imposed on secular nonprofits, questions arise when a church incorporated in one state conducts operations, owns property, or maintains congregations in other states.

This question becomes particularly important in light of “sunshine” provisions, which require corporate boards — including nonprofit boards — to conduct activities transparently, keep minutes, and allow members access to certain records. An equally important issue is identifying who qualifies as a “member” under state law, since member rights are often the vehicle through which transparency is exercised.

The Legal Framework

1. Incorporation and Internal Affairs Doctrine

Under the internal affairs doctrine, the law of the state of incorporation generally governs the internal affairs of a corporation, including the conduct of its board of directors and corporate governance. This doctrine is widely recognized and applied by courts in all states. Therefore, a church incorporated in Delaware, for example, is governed by Delaware corporate law even if it owns property and operates congregations in Ohio.

However, the internal affairs doctrine has limits: states also exercise police powers to regulate activities within their territory, particularly when public policy is at stake. Transparency in nonprofits serving the local public may trigger such state-level interests.

2. Sunshine Laws: Overview

Sunshine laws are state statutes that mandate open meetings, access to records, and transparency in decision-making. While primarily aimed at government entities and publicly-funded bodies, some states extend transparency obligations to nonprofit corporations, especially those receiving public funds or serving the public at large.

Government-Focused Sunshine Laws: Every state has a public records law and an open meetings law applicable to state and local government. These do not apply to private religious organizations. Nonprofit Corporation Acts: Almost all states have enacted versions of the Model Nonprofit Corporation Act (MNCA), which governs the operations of nonprofit corporations in their jurisdiction. These acts generally include provisions requiring boards to hold meetings, keep minutes, maintain records, and allow members access to certain information. Many explicitly exempt religious corporations from some or all provisions.

Who Are the “Members” of a Church Corporation Under State Law?

A recurring question in applying sunshine provisions to churches is determining who has the right to inspect records, receive notice of meetings, or otherwise hold the board accountable. These rights are typically granted to the “members” of a corporation, and it is crucial to understand how state law defines this term.

Statutory Definition of “Member”

Most state nonprofit corporation laws distinguish between “members” of the corporation and “attendees” or “congregants” of the church. Being a member of the congregation in a spiritual sense does not automatically confer legal rights as a corporate member under state law.

Model Nonprofit Corporation Act (MNCA): defines a “member” as a person who, pursuant to the articles or bylaws of a corporation, has the right to vote for directors or on other matters. California: under the Nonprofit Religious Corporation Law, a member is defined by the corporation’s articles or bylaws. A church may choose to have no statutory members, in which case the board governs exclusively. New York: the Religious Corporations Law often defers to denominational rules to define membership. Ohio: under the Ohio Revised Code (O.R.C. §1702.01(G)), a “member” of a nonprofit corporation means a person having membership rights in accordance with the articles or regulations of the corporation. In practice, churches incorporated as religious societies (O.R.C. Chapter 1715) define membership in their articles or bylaws, and the statutory “members” may be only the trustees or elders.

Implications for Sunshine Provisions

State statutes usually grant certain inspection and participation rights to “members.” For example:

Right to inspect books and records for proper purposes. Right to receive notice of and vote at member meetings. Right to elect or remove directors if bylaws confer that authority.

Churches can avoid statutory member rights by structuring themselves as board-only nonprofits (sometimes called “non-membership” corporations), where the board governs without a separate body of members. However, adopting this model may raise ethical or ecclesiastical concerns, as congregants may expect some level of participatory governance.

Churches should therefore carefully draft articles and bylaws to clearly define who is a “member” in the corporate sense, and what rights those members have. Failing to do so may result in disputes when congregants assume they have rights that they legally do not.

Comparative State Analysis

Below is a sample of how several states handle sunshine provisions, religious corporations, and the role of members, with Ohio included:

State

Religious Corporation Exemptions

Sunshine Provisions for Nonprofits

Definition of Member

California

Nonprofit Religious Corporation Law exempts churches from AG oversight reporting required of public benefit nonprofits

Does not impose public meeting requirements on private nonprofits

Defined by articles/bylaws; may choose to have none

New York

Religious Corporations Law defers to denominational rules; courts reluctant to interfere

No open meetings for nonprofits; members may inspect records

Determined by denominational polity

Florida

Sunshine Law applies to governmental entities only

Nonprofit records accessible to members but not public

Determined by articles/bylaws

Texas

Nonprofit Corporations Act exempts churches from AG oversight

No public meeting requirements

Determined by articles/bylaws

Illinois

Religious Corporations Act largely silent on governance, defers to internal rules

Records inspection rights limited to members

Determined by articles/bylaws

Massachusetts

Exempt from many annual filing requirements if organized as religious

No public meeting requirements

Determined by articles/bylaws

Ohio

Religious societies governed by O.R.C. §1715, allowing self-regulation via articles/bylaws

Sunshine Law applies only to public bodies; nonprofit corporations must keep records and permit member inspection per O.R.C. §1702.15

“Member” means as defined in articles/regulations (O.R.C. §1702.01(G))

Best Practices for Churches

To navigate this complex legal environment while upholding ethical standards of transparency and accountability, churches should consider the following:

Define Membership Clearly: Draft articles and bylaws to define “member” for corporate purposes and clarify rights, to avoid misunderstandings. Understand Home-State Law: Ensure compliance with the nonprofit and religious corporation laws of the state of incorporation. Register as Foreign Entity: Where required, register to do business in each state of operation. Review Local Statutes: Examine whether the operating state imposes additional recordkeeping or reporting requirements, such as member inspection rights under Ohio Revised Code §1702.15. Adopt Ethical Sunshine Practices: Even if legally exempt, adopting open meeting policies, maintaining clear minutes, and granting member access to records can strengthen trust. Train Board Members: Ensure that church board members understand the dual responsibilities of spiritual oversight and corporate governance. Seek Counsel: Consult legal counsel familiar with both nonprofit and ecclesiastical law to stay compliant while preserving autonomy.

Conclusion

While most states exempt religious corporations from strict sunshine law compliance, the trend in nonprofit governance favors greater transparency. Ohio exemplifies a state where religious corporations retain substantial autonomy, yet internal records must still be maintained and accessible to statutory members upon proper request. Churches incorporated in one state but operating in others should be attentive to both legal obligations and the ethical expectations of openness. Defining corporate membership clearly and aligning it with ecclesiastical expectations is a key step in preventing disputes. By respecting state-specific requirements and voluntarily embracing transparency principles, church boards can strengthen accountability, safeguard their religious mission, and reduce legal risk.

References

Model Nonprofit Corporation Act (3rd ed.), American Bar Association. California Nonprofit Religious Corporation Law, Cal. Corp. Code §9110 et seq. New York Religious Corporations Law, N.Y. Relig. Corp. Law. Florida Sunshine Law, Fla. Stat. §§286.011–286.012. Texas Business Organizations Code, Chapter 22. Ohio Revised Code §§121.22, 1702.01(G), 1702.15, 1715.01 et seq. Internal Affairs Doctrine: Restatement (Second) of Conflict of Laws §302.