5 page essay on the various types of church bodies that you can register under the

respective laws of the country, stating the advantages and disadvantages for each type of
registration.

I. Necessity of registration for a holding property

I would like to begin by stating that there is, under the Federal constitution, no requirement for a

church, or any religious group, to be registered as a company or society or other type of body, in

order to exist and be able to carry out its activities. The existence of any religious group is

legitimized under Art 11(3). As a result any church gathering for worship, which does not disrupt

public order, is constitutionally recognized, whether or not the church has formed a legal

association. It is important to understand that such gathering cannot be viewed as illegal, being

unregistered, but it is legitimate under the constitution which is sovereign over any other law.

Now, the provision stating that the church is required to maintain its activities in accordance to

the law is that provision that requires churches to form a legal body in order to carry out

“business” such as: acquiring and managing property, land, etc; opening a bank account and

managing financial assets; exercising legal rights as a group and applying for permits as a group

from government authorities (which are necessary for instance when inviting foreign speakers,

missionaries, etc).

Section 43(d) of the National Land Code of 1965 spells out only four categories of persons or

bodies are entitled to own property and these are:

a. Natural persons other than minors;

b. Corporations having power under their constitutions to hold land;

 c. Sovereigns, governments, organisations and other persons authorised to hold land under

the Diplomatic & Consular Privileges Ordinance 1957; and

d. Bodies expressly empowered to hold land under any other written law.

Consequently, in regards to the acquisition and management of property, we must understand

that churches are not considered eligible bodies under the National Land Code of 1965 for

holding and dealing in land. Secondly, when it comes to property ownership, the government

only recognizes church denominational groups created prior to 1900, hence, late-born

denominational groups are not granted under the NLC the status of a body corporate, which

under section 43(d) is, alone, entitled to own church property.

There is therefore a need to mitigate this discrepancy between the right to exist provided by the

Federal Constitution and the absence of recognition under the NLC in order to properly own

property needed to operate certain church activities.

Two options, as a result, can be looked into in order to provide the church a form that would

provide it with a physical existence:

- being a public company limited by guarantee, registered under the Companies Act of

Malaysia 1965

- being a society, registered under the Societies Act of 1966

II. Forms of Registration

What could push a church group to consider registration will usually be the following criteria:
The size of the church group: the larger it is, the greater the need will be for a large meeting

place which a building alone could provide. If the ownership of a place comes in view, the

following criteria will be taken into account as well; the need to hold property whether movable

(bank account) or immovable (building and land) and the capacity to handle the administrative

requirements that come with registering it.

An unregistered church group could choose to be registered as a company or a society but needs

to carefully take into account the implications that such registration would have on the day-to-

day operation of the church.

a. Incorporation

Under NLC 43(d)(b), churches that incorporate themselves as private companies are entitled to

own property but under this form of incorporation, these church groups would have to be limited

to a maximum of 50 members. Hence, most churches choosing to be incorporated will choose to

form a public company with limited guarantee. There is a caveat however, to the ability of an

incorporated church to acquire land under the Companies Act, and that is that the church must

first receive a license to acquire land from the Minister of Domestic Trade and Consumer

Affairs, which grant is at his discretion. As a result, the incorporation of a church does not

automatically give it the right to own land as may have been expected.

The main advantage of incorporation though is that it allows for the church to be recognized as a

separate legal entity giving it the advantage of exercising its legal rights namely under contracts,

hence to sue a party for instance. But the opposite will also be true, where the company can be

subject to legal action by its members, making it easier for cumbersome and potentially

unnecessary lawsuits to take place.

Another advantage lies in the perpetual succession of the company whereby the company can

continue to exist even without operations or members. The dissolution of the company would

need to be done in accordance to provisions in the Companies Act.

Lastly, in the case of a limited guarantee company, its members are only liable for the company’s

debt to the extent of their guarantee as agreed upon in the memorandum of association.

b. Registration as a Society

It is interesting to note that under the Societies Act 1966, Section 2, the definition of ‘society’

does not seem to include religious bodies but neither does it exclude them. By default, a religious

group can register under the Registrar of Society provided that it complies with all the rules it

imposes on societies.

Similar to a company, a society is a legal entity of its own which is able to sue and engage in

legal actions for its own advantage but then can also subject to lawsuits and judgments against it

or its property. A society is also entitled to own property under its own name.

However, in the case of registration under the Society Act, there are many stringent rules and

intrusive provisions that a church would have to abide by. Indeed, the Minister of Home Affairs,

the Police and the Registrar of Societies all have powers to intervene in the activities of a society.

This presents quite a significant disadvantage.

The Minister of Home Affairs, at his discretion, could declare society unlawful if he considers

that its activity presents a security threat to the nation. He also has the ability to prescribe

anything at his discretion, which for instance include giving power of inspection to the Registrar

who can require specific documents to be presented by the society at its request.
The Registrar, in turn, has almost unlimited power to ensure compliance with the Societies Act.

It has also the power to refuse or cancel the registration of a society. It also has the power to

inspect records as state above but also power of entry in the premises of the society should it

consider that the society is engaging in activities threatening public peace, order, morality, etc.

This would normally be seen as an intrusion of privacy but it is sanctioned by the Society Act

and the Registrar has full permission therefore to make such inspections, even by force if

necessary.

Moreover, the Police is also given power of entry and search if they consider that the Society is

engaged in any unlawful activity.

As a result, registration as a society can be very stringent and can make a church vulnerable to

unexpected inspections and charges as the considerations of “threat to public security” can be a

very biased and manipulated concept.

In either forms of registration, we need to remember that administration, keeping of records,

accounting, etc can be very cumbersome, time consuming and financially draining. Fees are

payable every year, documents need to be filed, etc. Compliance with the provisions under the

Company Act or the Society Act are crucial and any failure to comply can be detrimental,

leading to penalties or worse, deregistration. Moreover, the risk of deregistration is quite high as

any complaint from a member could potentially lead to that. Once deregistered, a society

becomes unlawful, as well as every branch thereof. Following that, the property of such

deregistered society can then be sold to wind up the affairs of the society which would include

paying up its debts and other costs of legal proceedings.

III. Alternative Registration Options as Company or Society in Order to Hold Property

a. Appointment of Trustee

If a church group is looking for alternatives to own property without tackling the difficulties and

risks of incorporation or registration as a society, another option is possible, which is the

appointment of a trustee to hold property on behalf of the congregation. A trust is an

arrangement whereby property is transferred to it wherein a person or more (trust/ trustees) are

given the responsibility to manage the property and handle any income related to it. The trust is

appointed on behalf of beneficiaries which in the case of a church would be the congregation.

The procedure to form a trust is quite easy making it very advantageous for churches. The steps

entail the following:

(a) Appointment of the trustees by church members in a general meeting; (b)Signature of a

memorandum; (c)Trust deed prepared by legal practitioner defining the purpose of the trust,

property to be managed and beneficiaries.

Members will only have to ensure that the trustees are reliable and will work for the benefit of

the beneficiaries in good faith. This is important for the members as legal action against a trust

for breach could be a tedious and complicated process. Another advantage of the trust is that it

could register as a corporate body and hence, similar to a company, enjoy perpetual succession,

power to take legal action as a separate entity in its own name, etc.

b. Non-registered church under a recognized body (e.g. NECF)

The National Evangelical Christian Fellowship of Malaysia is a body recognized by the

government. As a result, any member church under its wings could make applications through
this body and enjoy many benefits, if it is a non-registered church. If its property, moreover is

handled by a trust, going through NECF for specific requests or transactions, may be a more

viable option than registering as a separate body.

A church group should carefully consider its options prior to deciding whether they want to

register or not. The consequences of registration as a company or society can be quite

cumbersome and taking the church away from its purpose of being first of all a spiritual body.

The administration that has become so heavy on many churches today, as I see it, has often times

taken the place of spirit-led leadership and quenched the liberty of pastors to follow the

commands of the Lord as they try to also protect their congregants and rights acquired from

potential intrusions from the government, registrar, police and other agents. Indeed, in Malaysia,

we fear to lose our rights if we were to abide by God’s commandment to go to ALL nations

(including those forbidden to us by the Federal Constitution) and therefore shy away from

obeying this commission.

 1. (b) As a pastor, you have just planted a church with a small congregation of 30
believers. The church is self supporting and paying your monthly salary and
expenses.
(i) A five page essay on the steps for convening a church annual general meeting
(AGM) stating the following:-
- Notice and agenda items for consideration
- Who shall be chairman of the meeting; and
- The minutes of the AGM

Convening a Church Annual General Meeting

Proper church governance will include amongst other things, the proper calling of meetings. In

case of the Annual General Meeting, certain standard proceedings need to be respected. First of

all, the notification and agenda of the meeting need to be sent out to all concerned members.

Then the chairman of the meeting needs to be designated. And once the meeting has taken place,

the Secretary will have to send around the minutes of the AGM appropriately taken down.

The AGM is typically held every year. Its purpose is to inform its members of the previous year's

activities. During the AGM, it is also common that elections of directors and other officials for

the following year take place.

I. Notice of Meeting

The AGM of the church needs to be called at least 14 days prior to the date or according to

whatever period of time is called for by the articles of association of the church. The notice

should be drafted in words as follows:

“Notice is hereby given that an annual general meeting of members of [name of church] will be

held at [time] on [date] at [location of the meeting with address].”

Should there be an explanatory circular, it will need to be attached to the notice of AGM. An

explanatory circular would include for instance any general information concerning any new

nominations, the particulars of the nominees, any report that need to be reviewed during the

AGM and is provided to the members for review prior to the meeting, etc. With such

explanatory notice, the sentence above would need to be followed by another to this effect:

“The Explanatory Circular which accompanies and forms part of the this Notice of AGMT

describes the various matters to be considered”.

II. Agenda of meeting

The Notice of Meeting will also need to include an Agenda of the AGM, drafted by the Church

Board Secretary by order of the Board. Because the church is a newly planted on, the agenda will

more than likely not include any review and vote of prior AGM minutes or a complete treasury

report. However, there will need to be a report on compliance with laws of incorporation, forms

submitted, etc, as well as a budget presentation for the year. A vote will then be submitted to

accept the year’s budget.

The pastoral report will ensue as well as any other business that needs to be attended, such as

ministry reports, etc. Prior to closing, the vote to set the following year’s AGM date will be

submitted.
The agenda would be as follows:

1. Opening Prayer

2. Appointment of the Chairman

3. Roll call: confirmation of the quorum

4. Treasury Report of accounts to date

5. Compliance Report

6. Budget Presentation and Vote

7. Pastoral Report

8. Other ministry reports

9. Call for Any Other Business

10. Vote to set the following year’s AGM date

11. Meeting completed and closed/ Closing prayer

III. Appointment of Chairman

The Board of Directors of the church will propose the names of the directors to be elected as

Chairman of the AGM for the term called for by the articles of the church. The names and brief

biographies of the nominees will be detailed in the Explanatory Circular attached to the Notice of

AGM for the review of the members.

The procedure for the vote will also be included in that Explanatory Circular which will make

reference to the articles of association concerning the vote procedure. This will include

information on:

- The voting members

 - Voting procedure

- Voting rights and proxies

IV. Minutes of AGM

The Secretary of the Board will have the duty to keep a faithful record of all business

proceedings of the church and the church board and to record the minutes of all business

meetings. The Secretary will therefore be required to take down detailed notes of the AGM and

subsequently draft the minutes to be circulated to the Chairman and all directors for their review.

Any changes, comments or amendments will then be made and returned to the Secretary for a

final draft. The finalized document will be filed in the church’s Minutes Book, which is made

available for any inspection by the relevant authorities but also referred to in the following AGM

for confirmation.

The form in which the minutes of the AGM could be presented is as follows:

Church Annual General Meeting Minutes

(Name of Church)

(Date and time of the Meeting object of the minutes)

(Venue with address)

I. Preamble

In this section, the Secretary will introduce the attendees, listing all the members starting with

the chairman, vice-chairman, treasurer and secretary, pursued by all other directors and then the
list of members of the church by name. Should there be any individuals attending as observers

(i.e. non-member or non-committee member) only, they also need to be recorded.

The Secretary will also state the time the meeting was called to order and who chaired it.

II. Opening Prayers

III. Minutes of Previous AGM

In this section, the minutes of the previous AGM will be introduced and any elements that

needed to be discussed during the present AGM are highlighted and with comments on how

those items were addressed.

IV. Reports

The list of reports discussed at the AGM will be listed here but appended to the minutes. These

will include financial reports, pastors and ministry reports, etc.

V. Votes

If any votes occurred during the AGM, the voting process will need to be recorded, listing first

of all the names of returning officers and then the candidates. The elected officer/ director(s) will

be indicated within the minutes.

VI. Matters Arising

Any motions passed, discussions that occurred, need to be recorded. The Security Commission

of Malaysia requires that not only every decision be recorded but that the discussion that led to

such decision be detailed as well in order to provide an understanding of the process by which

the decision reached.

 VII. Any Other Business

In this section, any other discussion or event outside those listed above which took place during

the meeting need to be recorded here.

VIII. Closing Prayers

Then the time at which the meeting was adjourned will be stated as well as the name of the

Secretary submitting the minutes:

Meeting adjourned at (time)

Minutes submitted by Secretary

Name:

(Date)

When writing minutes of any meeting, there is no rule as to the form it should take but best

practice would recommend either doing it in a fully narrative form or by summarising the

discussion points as long as the essential elements of the discussion are properly spelled out.

(ii) State and briefly describe the types of records, registers, books and financial
statements that you should keep and maintain, including those bconcerning
meetings of the church board and congregation.

Documents to be kept

Documents, records and registers needed to be kept by a church are dependent upon the body the

church is registered as but also upon how long the church has been registered. In the case we are
handling the case of a church that is newly planted with 30 members, where the salary of the

pastor is paid by the church on a monthly basis.

The registers that should be kept by the church include:

 Register of Directors, Managers and Secretaries

 Register of Charges, if any

 Register of Members and its classes, if any.

The church will also need to maintain a Minutes Books for:-

 All minutes of meeting of the board of directors/council/managing body

 All minutes of members’ meeting i.e. EGM and AGM; and

 Minutes book of Committee minutes, including those meetings of management type e.g.

finance and budget, missions, project etc.

 Protem Committee meeting minutes

 Management meeting minutes

 Annual General Meeting minutes that need to be filed together accounts in Return Form

to Registrar of societies after AGM

The church will also have to maintain the list of elected Management/Office Bearers with their

particulars. This list needs to be submitted annually after their election at the AGM.

Because the church is paying the pastor’s monthly salary and expenses, it is most likely an

incorporated body and in this case, the church will have to maintain the following as well:

If incorporated body, need to register with Inland Revenue Board

  Annually Form C for a company, Form T for a society

 Annually Employees Form on salaries –Form CP8

 Monthly scheduler tax deduction of employees eligible for tax

 EPF/SOCSO monthly submission

In regards to documents of title of any property held by the church:

The church is also required to maintain financial documents and accounts for tax and audit

purposes. The church needs to be able to provide financial records and supporting administrative

documentation (receipts, contracts, etc) in order to prove Financial records and supporting

administrative documentation should be kept in detail to demonstrate the critical accounting

distinction between income that is related to Church activities and income generated from

activities that are unrelated to church business. Congregations should document these activities

clearly and in a format that allows historical re‐creation of data during a tax inquiry or audit.

(c) What do you understand by the statement “That every church should be properly
governed to ensure accountability to its congregation with appropriate systems put in
place”

Church governance is important for pastors and ministers in today’s modern era of living.

Whether the church is small, big or mega in size, strong godly leadership is important and good

governance practices should be put in place for reason of accountability, clear decision making

processes and transparence to the community of faith. The New Testament is the model for local

churches. As churches grow, they need a good sound structure and processes to ensure that they

are conducive to creating a healthy environment for stewardship and accountability of resources
provided by God through its community of believers. These principles of governance will serve

to guide the modern structuring of a church especially in leadership role, the support for worship

places and missionaries in fulfilling the purpose and mission in the world. The theology behind

these principles stem from the fact that all resources are contributed by the community of

believers called by God to be the church, and should rightly be made accountable by the elected

leaders who have full power and authority to dispense with the resources that are contributed by

the community of the body of Christ.