Are the elders or church leadership personally liable for debt of a church?
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Are the elders or church leadership personally liable for debt of a church?
The pastor of our church has misshandled the financial matters of our church. We are in the
process of elections for new leadership and pastor. The main concern is we will be held
personally liable for the unpaid bills and debt of the church.
Asked on April 21, 2016 under Business Law, Indiana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
You are not directly liable for the pastor's criminal act (assuming you did not participate in it--that is, you were his accomplices or conspirators), unless you executed some sort of agreement under which you would indemnify (repay) the church for any losses. However, you could be liable for your negligence, or carelessness, if your oversight or supervision was unreasonably lax, so that you should have caught the embezzlement earlier but failed to do so. That failure to take reasonable care to protect church assets could potentialy make you liable for the churchs's losses. But if you took reasonable steps (e.g. had an accountant and annual audit; undertook a deeper review if and when suspicious activity surfaced; etc/), then you should not be liable.
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