Q. What issues may arise when merging with another ministry?

A. Church mergers require legal planning for leadership, assets, staff, and bylaws to ensure a smooth and unified transition.

Draft detailed plans concerning leadership changes, changes to legal documents, decision-making up to the point of the merger, employment transition, title changes for owned assets, and vendor relationships.

Whether your ministry merges into another existing ministry, consolidates with another ministry into a new ministry, or joins together with another ministry in some other manner, many issues need to be considered to ensure that the proposed merger results in unity and joy rather than division and litigation.

If two or more ministries are consolidating into a new ministry, then the merging ministries will need to agree on the content of the organizational documents of the new ministry entity.

Ministries contemplating a merger should consider the following:

1. Draft a written memorandum of understanding that explains how the leadership board of the new combined ministry will be selected and other legal and practical changes that will result.

2. Determine what changes to Articles of Incorporation/Bylaws will be required. If one ministry is merging into another, then the organizational documents of the surviving ministry will need to be reviewed for any needed revision. If two or more ministries are consolidating into a new ministry, then the merging ministries will need to agree on the content of the organizational documents of the new ministry entity. An attorney should be involved in this process to ensure compliance with all locally applicable laws.

3. Draft a written plan of how decisions will be made leading up to the combination, as well as what the final decision-making structure will be once the combination is complete. Because questions of control are a significant source of controversy, it is best to deal with this issue up-front before critical decisions are made.

4. Determine how current employees of the churches will be treated—both those who will continue to serve the ‘new’ church and those for whom there will no longer be a position.

5. Draft a written plan regarding how the assets of the churches will be titled, used or sold after the transition. Selling or changing title to assets may require a vote of the original ministries prior to the merger.

6. Contact existing vendors to make any necessary changes in the terms of service required by the merger or consolidation. This includes utilities, insurance carriers, banks and any retailer where the ministry has an account.

Recommended Resources

If you found this information helpful, you might be interested in these other resources:

• Are Church Mergers Changing the Church Landscape – by Dan Reiland

• 6 Reasons Why Church Mergers are a Good Idea – by Dan Reiland

Posted 2017
The information we provide is intended to be helpful, but it does not constitute legal advice and is not a substitute for the advice from a licensed attorney in your area. Accordingly, no attorney/client relationship is created through this process, and no legal advice will be provided. We strongly encourage you to regularly consult with a local attorney as part of your risk management program.