The Church as a Corporation: Part III

Here are a few more odds and ends about the Church as a corporation that I was able to find out. First, I wanted to correct two mistakes in my earlier posts. I recently found out that after Joseph Smith was murdered, it was not Brigham Young and the Twelve who succeeded to the office of trustee-in-trust. Rather, Bishop Newel K. Whitney was appointed, which means that he was the legal agent in charge of Church property during the City of Joseph period. Second, upon rereading the corporate charter granted to the Church by the State of Deseret, I noticed that it did contain a rather watered down mortmain provision, which stated that the Church could receive donations of real and personal property “for the benefit, improvement, erection of houses for public worship, and instruction, and the well being of said church.” Obviously, “well being of said church” provided a much larger grant of power than that available under the previous Illinois statute.

What about the Church today?

The Church today no longer exists as a special charter corporation that way that it did during Utah’s pioneer period. Rather, as near as I can tell its core corporate existence is organized around two corporations sole: The Corporation of the First Presidency of the Church of Jesus Christ of Latter-day Saints and the Corporation of the Presiding Bishopric of the Church of Jesus Christ of Latter-day Saints.

The corporation sole is one of the oldest corporate forms. It incorporates a particular person, or more precisely a particular office. In Anglo-American law the oldest corporation sole is probably the King of England. The King, in contemplation of law, is a corporation composed of all of the people that have ever occupied the office. Hence, Elizabeth Winsor does not personally own the property of the English monarchy. Rather, that property is held by a corporation sole – the king or queen – which existed long before her coronation and will (presumably) exist long after her death. Other examples of corporations sole would be bishops of the Church of England, parsons, and the mayors of many towns. As early as 1786 parsons in Massachusetts were treated as corporations sole. What is interesting, is that the corporation consists of the office holder not of the organization in which he or she holds office. Thus, while the State of Deseret charter of the Church incorporated “all that portion of the inhabitants of said State, which now are, or hereafter may become residents therein, and which are known and distinguished as ‘The Church of Jesus Christ of Latter-day Saints’,” the Corporation of the First Presidency incorporates only those who do and have held the office.

In addition to these two corporations, there are two other main corporate entities of which I am aware. The first is Intellectual Reserve Inc., which holds all of the Church’s copyrights and other intellectual property. The second is Deseret Management Corporation. This corporation is a holding company which owns all of the Church’s stock in for profit businesses, such as KSL or the Deseret News. I don’t know what form either of these corporations take, although I am assuming that Deseret Management Corp. is a regular joint-stock business company. Also, in addition to these four Utah based corporations, my understanding is that there are dozens of other Church corporations organized under the laws of other countries to hold and manage Church property in those nations and act as the Church’s legal personality there.

10 comments for “The Church as a Corporation: Part III

  1. Adam Greenwood
    April 29, 2004 at 11:55 am

    Any speculation as to why, if the Church Corporation was allowed to own property, so much of was in Joseph’s name or otherwise tangled legally?

  2. April 29, 2004 at 12:57 pm

    Adam: I touched on this in my earlier post. The short answer is that the Church did not have a seperate legal personality until quite late, and in Nauvoo in particular the Church did not have a legal personality until after Joseph had become personally libable for huge debts associated with the purchase of land etc. for the town.

  3. Frank
    April 29, 2004 at 2:21 pm

    As you would suppose, the church schools are also incorporated. They have interesting charters.

  4. April 29, 2004 at 4:53 pm

    Nice info, Nate. I’ve really enjoyed this series of posts, sharing informations that is interesting but tough to come by.

    So does the Corp. of the FP hold Mormon buildings (temples, stake centers, visitor’s centers, the MTC) while Corp of the PB holds investment property (real estate and securities)? And I take it the Corp of the FP rather than Intellectual Property has legal ownership of the actual manuscripts in the Church archives?

  5. Chad too
    April 29, 2004 at 5:37 pm

    I know I’ve run across Hawaii Reserve, Inc (HRI) as the entity that oversees the Church properties in Hawaii (BYUH, PCC, etc.)

  6. April 29, 2004 at 5:57 pm

    Dave: I don’t know. My understanding is that the physical facilities of the church (ie chapels, MTC, chapels, etc.) are owned by the Corp. of the Presiding Bishopric. I don’t really know how Church investments are structured. My understanding is that they take two forms. First, there are assets (mainly businesses, land, and chunks of stock) which are held as a form of long term savings. Second, my understanding is that the current “cash reserves” of the church are invested in a diversified stock portfolio which they move in and out of quite frequently as expenses become due and revenue comes in. I believe that that long term investments are held by Deseret Management Corp., but I have to confess that I don’t really know.

  7. April 29, 2004 at 6:25 pm

    I thought that it was the Corporation of the President of the Church, not of the First Presidency. Correct me if I’m wrong.

    Also, my understanding is that the Corporation of the President is the parent of the others.

  8. April 29, 2004 at 7:03 pm

    Steve: I don’t know on the name. You could be right. I am not sure what you mean by “parent.” A corporation sole can own stock in another corporation, but it cannot be owned by someone else. Thus, while I am assuming the Corp. of the Pres. owns the stock of Deseret Managment Corp., I don’t think that it could own the Corp. of the Presiding Bishopric.

  9. Pete
    April 30, 2004 at 5:05 am

    I too enjoy this kind of rare information.

    Property Reserve Inc. is probably another main corporation worth mentioning. I understand it is the primary real estate holding and development arm of the church, including all of the significant church properties in downtown SLC (Crossroads/ZCMI, etc.).

    IIRC, the media reports I have seen in the past (Time, Newsweek, etc.) have highlighted real estate as the most significant asset in the church’s portfolio.

  10. Ryan Wares
    May 7, 2004 at 6:19 am

    This was written by the now president of DMC.
    At the beginning of 1990, major commercial businesses owned by the Church included Beneficial Development Company, Beneficial Life Insurance Company, Bonneville International Corporation, Deseret Book Company, Deseret News Publishing Company, Deseret Trust Company, Farm Management Company, Temple Square Hotel Corporation, Utah Home Fire Insurance Company, and Zions Securities Corporation. The Church also owns Laie Resorts, Inc., a small motel, restaurant, and service station located adjacent to the polynesian cultural center in Hawaii. These businesses come under the umbrella of Deseret Management Company, a holding company that receives and distributes profits, performs internal audits, generates consolidated financial statements, files consolidated income tax returns for the group, coordinates activities, and reviews business operations and plans.

    Thought you might liek to know!!

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3 comments for “The Church as a Corporation: Part III

  1. April 5, 2004 at 3:18 pm

    Erratta: The South Sea Company actually did have a corporate charter.

  2. Dan
    April 5, 2004 at 5:00 pm

    This is great stuff. What are your sources besides “Great Basin Kingdom”? And what subsidiaries does the current church corporation have? Are parts IV-??? forthcoming?

  3. April 5, 2004 at 6:43 pm

    My sources are Arrington, Firmage & Mangrum _Zion in the Courts_, and Sarah Barringer Gordon, _The Mormon Question_ on the Mormon stuff. Dale Morgan, _The State of Deseret_ has the text of the 1851/1855 charter, which was also published in Utah Historical Quarterly. I tracked down the Illinois law on my own using information from Joseph Smith’s multi-volume History of the Church. For the evoluation of corporate law, there are a couple of places to go. Gerald Frug, “The City as a Legal Concept” is an interesting article. Lawrence Friedman and Morton Horwitz both give (very leftist) over-views of the history of corporate law in America. Also, Paul G. Mahoney, “Contract of Concession? An Essay on the History of Corporate Law,” 34 Ga. L. Rev. 873 is where I got a lot of the basic history. Right now I am reading William W. Bratton, Jr., “The New Economic Theory of the Firm: Critical Perspectives from History,” 41 Stan. L. Rev. 1471, which also covers a lot of this history.

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