1. Incorporation and Deeds
Before an annual conference, district conference, a pastoral charge, or a society purchases real estate, a lawyer should be consulted and given a copy of The Manual of The Free Methodist Church in Canada for reference, and wherever the civil laws will permit, proceed to incorporate. The articles of incorporation, wherever the law will permit, should provide that the corporation shall be subject to the rules, regulations, doctrines, and The Manual of The Free Methodist Church incorporated as “The Free Methodist Church in Canada,” as from time to time adopted by the general conference of that church insofar as they do not contravene the civil laws, and that the secular affairs of the corporation shall be managed by trustees elected according to the provisions of this chapter. When incorporation is complete, the deed shall be made out directly to the owning body in its corporate name and shall without exception contain the trust clause given in the following paragraph.
1.1 Trust Clause
The Free Methodist Church in Canada was incorporated by an Act of Incorporation assented to on July 8, 1959, by the Parliament of Canada.
In provinces where the law requires church property to be held by trustees, and where incorporation is not secured as provided for in the above paragraph, all deeds shall be made to the trustees, naming them and their successors.
The deed should be drawn up by a lawyer, and contain a trust clause drawn in harmony with the Second Schedule of the Act of Incorporation of The Free Methodist Church in Canada. A copy of this schedule may be obtained from the Ministry Centre.
The deed shall also include a clause indicating that in the event of dissolution of the local society or other organization, for whatever reason, the trustees shall convey the net proceeds of sale of local properties to The Free Methodist Church in Canada, or if no trustees remain, that titles of all properties shall be transferred to The Free Methodist Church in Canada, in accordance with ¶350 of The Manual.
All property, whether real or mixed, acquired by any local society, pastoral charge, conference or other body, whether incorporated or unincorporated, shall be held subject to the foregoing trust as set forth in section 2 whether appearing in the evidence of title, or whether left out of such evidence of title, by mistake, inadvertence, willfully, or otherwise; and can only be released pursuant to the provisions outlined below….
2. Real Property and Trustees
- 2.1 The trustees (See ¶3126.96.36.199) of the local society shall hold in trust all real property (buildings and lands) for the use and benefit of the society. They shall ensure that titles are in order; that deeds are drawn-up in accordance with the civil law; and that the trust clause given in ¶385 is included in all deeds.
- 2.2 The Free Methodist Church in Canada was incorporated by an Act of Incorporation assented to on July 8, 1959 by the Parliament of Canada. The Second Schedule of this Act defines in detail the permitted uses of real property and the scope of authority of the trustees. Trustees shall acquaint themselves with the Act (which can be ordered from the Ministry Centre of The Free Methodist Church in Canada), and ensure that their actions are in keeping with it.
A. In keeping with the Act of Incorporation:
- The trustees shall obey all lawful directions of the official board, society and conference. They shall be subject to direction by the society through the official board.
- The trustees shall have the power to mortgage, lease or sell property, with the consent of the society and the management committee of the conference.
- The church or parsonage property shall not be sold, mortgaged or encumbered for current expenses.
3. Other Property
- 3.1 All other property (equipment, supplies, money, and investments; i.e. property other than real property) shall be held in trust by the official board and its treasurer for the use and benefit of the society. The treasurer shall have charge of all monies and investments, subject to local by-laws regarding signing authority.
- 3.2 The Act of Incorporation requires investments made by The Free Methodist Church in Canada to be made in securities authorized under the federal Insurance Companies Act, Dec. 1991). All investments made by local churches shall also be in securities authorized under this act. Any investment of funds or change in investments must be approved by the official board. Funds shall be invested prudently and with due diligence for the security of the principal funds. (See the accompanying Handbook on Local Church Administration (¶370) for more details).
- 3.3 Funds (donations, bequests or endowments) designated for specific projects (e.g. building fund, missions, etc.) may not be used to pay operating expenses. If real property is sold, the principal received may not be used for operating expenses. With the permission of the management committee of the conference board of administration, the interest received from money received from the sale of property may be used to pay operating expenses.
Whenever a local society ceases to exist due to local action, or it is so declared by duly authorized action of the conference, the local trustees and official board, if they remain, shall sell all real and personal property of the society, and transfer the net proceeds, after clearing all local debts, to the conference, or convey the title to all real and personal property to the conference. If no trustees or official board remain, the titles to all real and personal properties of the former society shall transfer to the conference, for the benefit of The Free Methodist Church in Canada. The conference board of administration may authorise the management committee to sell the real and personal properties. The proceeds may be used as directed by the conference board of administration, provided that they are first applied to clearing any remaining debts of the former society.