Free Exercise of Religion by Closely Held Corporations

The First Amendment of the United States Constitution states that “Congress shall make no law respecting an establishment of religion, nor prohibiting the free exercise thereof.” While it is obvious this applies to natural persons (in other words, living human beings), the Supreme Court ruled in Burwell v. Hobby Lobby Stores, Inc. that, in some cases, it can also apply to closely held corporations. Although it has been half a decade since the case was decided, the exact implications of Hobby Lobby remain loosely defined.

In Hobby Lobby, the United States Supreme Court ruled that “closely held corporations” may exercise their right to the free exercise of religion just as natural persons can, even if they are not corporations founded with an explicitly religious purpose (such as a 501(c)(3) religious nonprofit). This means they can argue to be exempt from certain legal requirements on religious grounds, in the same way that many private citizens do. However, the court refrained from defining what constituted a closely held corporation under this definition, leaving the law in limbo.

It should be noted that this interpretation of the law is not based on a strict constitutional interpretation, but instead based on an interpretation of the Religious Freedom Restoration Act (RFRA). The RFRA imposes strict requirements on any law or regulation that might impinge upon religious freedoms, requiring the law to show it is intended to achieve a compelling interest, and that it does so through the least restrictive means possible. However, because Hobby Lobby was an interpretation of a statute, rather than the First Amendment, it is possible this protection for closely held corporations could be legislated out of existence by a hostile Congress.

If you need any help starting your church or religious organization, or have questions about applying for tax-exempt status, you’ll need an attorney who thoroughly understands the religious organization law and its tax implications. The non-profit law attorneys at Wingate, Kearney, & Cullen, LLP have offices in Brooklyn and Long Island, New York.  The firm is experienced in incorporating religious organizations and applying for tax-exempt status. For more information or to schedule a consultation, call (718) 852-5900 or fill out our contact form.

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