Motion Picture Association of America v. CrystalTech Web Hosting Inc.

Filing 1294

Motion Picture Association of America v. CrystalTech Web Hosting Inc.

Doc. 1294 Att. 2

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IN THE ilNITED STATES D1 STRICT COURT

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¡"OR THE DISTRICT 'OF ARIZONA
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PRESCOTT DIVISION

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UNITED STATES 02 AMERICA,

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Plain.tiff,
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NO. CV05-3073-PCT-EHC

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ELIZABETH A. GARDNER and FREDRIC A" GARDNER, each individually and d/b/a BETHEL ARAM MINISTRIES,

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Defendants.

13 DEPOSITION UPON ORAL EXAMINATION OF LOYAL L. RITTER
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617 Washington Street Wenatchee 1 Washington

May 16, 2007 4:00 p.m.

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CC(Q~)f
TAKEN AT THE INSTANCE OF THE PLAINTIFF

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CERTIFIED COpy
~ PLAINnFF
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REPOi';TED BY:

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ie. KAY VAUGHAN 1 RPR, CCR
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Dockets.Justia.com

1 ",-APPEARANCES:
2 FOR THE

PLAINTIFF:
MR. MARTIN M. SHOEMAKER U. S. Department of Justice Tax Division Civil Trial Section, Central Region P.O. Box 7238 - Ben Franklin Station Washington DC 20044
[phone]/ [phone]
martin. m. shoemakerWusdoj . gov

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PRO SE:
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( TELEPHONI CALLY)

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MS. ELIZABETH A. GARDNER MR. FREDRI CA. GARDNER
P .0. Box 2038

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Dewey, AZ 86327
[phone]/ [phone]

ALSO PRESENT:
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(TELEPHONICALLY)

MR. DAVID BORDEN

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,":".
--~ :~~, -~~ -. \:~.:

CENTRAL;COURT REPORTLNG 1-800-442-DEPO ,~i;';~~:nSeat't,l:e¿::-:,,:Be.ii evue ,. Yakima -; T1Jenacchee

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1INDEX
2 USA V. GARDNER
NO. CV05-3073-PCT-EHC

3 May 16, 2007
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TESTIMONY
LOYAL L.

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RITTER

PAGE NO.
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Examination by Mr. Shoemaker Examination by Examination by
Ms.

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Gardner

31 - 40

Examination by Mr. Shoemaker
Ms.

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41 - 42

Gardner

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EXHIBITS
MKD rD
Exhibi t No.1, Copies of Three

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Checks from L. Ri t ter to Bethel
Aram Ministries, Check Nos. 4935, 5000 and 5019
Exhibi t No. 2 i Bethel Aram

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Ministries Donation Sheet

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Exhibi t No.3, Bethel Aram Ministries Contribution Agreement
Exhibi t No.4, Bethel Aram Ministries Corp Sole FAQS
Exhibi t No. 5, Bethel Aram Ministries What is a Corporate Sole

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CENTRAL COURT REPORTING l-BOO-442-DEPO
Seattle ~' Bellevue - Yakima - Wenatchee

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BE IT REMEMBERED that on Wednesday i May

16, 2007, at 4:00 p.m., at 617 Washington Street,
Wenatchee 1 Washington, the deposi tion of LOYAL L.
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RITTER was taken before C. Kay Vaughan,

Registered Professional Reporter and Notary
Publ ic.

The following proceedings took place:
being first duly sworn to
tell the truth, the whole truth and nothing but the
truth, testified as follows:

LOYAL L. RI TTER,

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EXAMINATION

BY MR. SHOEMAKER:
Q.

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All right.

Mr. Ritter, could you give me your

ful 1 name, please.
A.
Q.

Loyal Lee Cl ayton Ri t ter.

Could you give me your home address.
16043 Chumst ick Highway i Leavenworth, Washington 1

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A.

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A.
Q. Q.

98826.

All right.
No.

Mr. Ritter, have you ever had your

deposition taken before?

All right.

Let me just explain briefly what i s

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going to happen here.

I i m going to ask you a
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CENTRAL COURT REPORTING 1-800-442-DEPO Seattle - Bellevue - Yakima - Wenatchee

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series of questions.

I i d just ask that you answer

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them completely 1 truthfully.

A.
Q.

Uh-huh.
i f i ask you something you do not understand,

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please stop me and I will try to clarify it.
A.
Q.

Okay.

Also avoid nonverbal or nonoral gestures.
court reporter here is going to take down

The

everything we say. And she can i t pick up nods

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or -A.

Don i t have those emotions like they do on the
Internet there, huh?

Q.

Exactly.
Okay.

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A.
Q.

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After I 'm f ini shed talking, Mr. and Mrs. Gardner
wiii have the opportunity to also ask you
quest ions.

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A.
Q.

Okay.
And t hat wi 1 1 be it.

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A.

All right.
MS. GARDNER,:

Could you possibly speak a

little louder?
THE WITNESS:

Can you not hear me?

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Yeah, now I do, but I couldn 't hear you, Martin, very well.
MS. GARDNER:

CENTRAL COURT REPORTING I-BOO-442-DEPO Seattle - Bellevue - Yakima - Wenatchee

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MR. SHOEMAKER:

All right.
Okay.

We i i i try to

make that a point.
MS. GARDNER:
Q.

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(By Mr. Shoemaker)

Could you tell me your

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employment for the past five years.
A.

I have been a real estate agent or Broker for the
last five years in Leavenworth.
Tha tis how I

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earn my living.
Q.

Do you have income from other sources?

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A.
Q.

No.

Tha tIs it.

Do you know El i zabeth Gardner?
I do know El i zabeth Gardner.

A.
Q.

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Do you know Fredric Gardner?

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A.

Yeah.

I know him by Rick.

Probably the same

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Q.

person, I would imagine.

Rick is short for

Fredric.
A.
Q.
Yes, 'i am.

So I i ve spoken wi th him.

Are you familiar with Bethel Aram Ministries?

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And how did you first learn of those two
individuals and Bethel Aram Ministries?

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A.

I believe it was through the Internet.

I was

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searching for information about corporate soles
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and I came upon their Websi te.

And that's how I

contacted - - I think I spoke with Elizabeth

first.

I may have even e-mailed and then talked
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CENTRAL COURT REPORTING 1-800-442-DEPO Seattle - Bellevue - Yakima - Wenatchee

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to them at that point_
Q.

Do you remember what the W~bsite' s address was or
the name?

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A.

I think it was www.corporatesoles.org, to the
best of my recollection.

Q.

If I said could it have been www. corpsole. org --

A.
Q.

Very possible.

Absolutely.

It could bei yeah.

So you were interested in corporation soles; is

tha t correct?
A.
Q.
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uh-huh.
You were doing Internet research and you came upon
that Website?
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A.
Q. .

That i S correct.

Amongst many others.

All right.
Yes.
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And the corpsole. org Websi te led you

to the Gardners i is that correct?
A.

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It had a "contact us" section, I believe,

and it -- i think it had their e-mail address.
think that i s how I first made contact was by

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clicking on the "contact us" e-mail link.
Q.

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So you contacted the Gardners first?

A.
Q. .

Yes.
They didn't contact you first?

A.
Q.
--

That i S correct.

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All right. when was thi s?
Somewhere in 2003.
I would guess - - November of
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CENTRAL COURT REPORTING 1-800-442-DEPO Seattle - Bellevue - Yakima - Wenatchee

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So I received that through the e-mail from my

inquiry.
Q.

And on the donation sheet it talks about making
separate checks out to Bethel Aram, Carol
Spackman, State of Nevada.

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Did you, in fact, make

separate checks out to those three?
A.

I made - - it was a - - I think it was $1,000 was

the amount to set up the corporate sole, that

donation level.

200 went to Carol Spackman.

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Plus filing fees, I believe.

And this is ~-

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breaks it down a little bit farther, which is my
commi tment to make donations to Bethel Aram

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Ministries.
Q.

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All right. Thi s wil 1 be Exhibi t 3. exactly what Exhibit 3 is.

Tell me

A.

It is a Contribution Agreement that I formed with

Bethel Aram Ministries so that I could make

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multiple payments and start the paperwork, you
know, sooner than later.

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And so this is what was

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Q.

put together and sent to me again through e-mail,
which is --

Sent to you from whom?
Bethel Aram Ministries.

A.
Q.

When you were dealing with Bethel Aram Ministries,

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what person were you talking to?

CENTRAL COURT REPORTING 1-800-442-DEPO 26
Seattle - Bellevue - Yakima - Wenatchee 023

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A.

I believe the second page has Elizabeth's

signature on it.
Q.

And that's - - that's who sent

me that one, I believe.

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All right.
Bethel Aram?

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Other than Elizabeth or Rick Gardnerj

did you speak with anyone else associated with

, A.
Q.

Bethel Aram? No, I don't believe so.

Huh-uh.

All right.

Okay.

I sent you a subpoena in this

case 1 correct?
A.
Q.

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Yes 1 you did.

And the subpoena requested that you send all - - or
bring with you all documents in your possession or
control , including checks, correspondence,

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contracts, agreements and promotional material in
any way related to Bethel Aram Ministries,

is
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El i zabeth Gardner or Fredric Gardner.
done that?
A.

Ha ve you

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Yes.

That i s what these two piece of paper are,

the questions and answers pages that I have here that I read over, and then the corporation sole

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documents.

Those are the sum total of what I

have that would have anything to do with Bethel
Aram Ministries.
Q.

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This Corporation Sole Questions and Answer

document wi 1 1 be Exhibi t 4.
CENTRAL COURT REPORTING 1-800-442-DEPO
Seat tle - Bellevue - Yakima - Wenatchee

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MR. SHOEMAKER:
MS. GARDNER:

Your objection is noted.

I can i t hear you.
Noted.
Noted? Okay.

I cannot

hear you, sir.
MR. SHOEMAKER:
MS. GARDNER:
Q.

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Thank you.

(By Mr. Shoemaker)

All right. One more exhibi t .

I i m going to make - - in your notebook you have a
tab 4, a set of documents leading off with "What
is a Corporation Sole, II and I'm going to make this
depos i t ion Exhibi t 5 and I ill make a copy of it.

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(PLAINTIFF'S EXHIBIT NO.5
MARKED FOR IDENTI FI CATION. )
Q.

Can you tell me what exactly deposition Exhibit 5

is?
A.

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Exhibit 5 is a number of pages that help me to

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understand a little more of what a corporate sole
is i that I can open, you know, a bank account

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wi th a corporate sole, how to do it, and how to

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change personal property to a corporate sole if I

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Q.

desire to do that and how to dissolve a

501 (c) (3) .

So it l s just part of the manual that

I have that tried to identify in a little greater
detail what a corporate sole is.
Al i right.

And where did that document, Exhibi t

5, come from?

CENTRAL COURT REPORTING 1-800-442-DEPO 30
Seattle - Bellevue - Yakima - Wenatchee
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A.

This came from Bethel Aram Ministries.

It was

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part of the packet that was sent to me wi th the

Secretary of State Corporate Charter.
Q.
Al 1 right.

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MR. SHOEMAKER:

That is all I have.

Mrs. Gardner i you have the floor.

MS. GARDNER:

Thank you.

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EXAMINATION

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BY MS. GARDNER:
Q.

Loyal, you said that you haven i t talked to me

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since last year. You talked about anything but
the conference, the ministers the pastors

conference.
A.
Q.

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Uh-huh.
Did we not at all talk about spiritual things?

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A.
Q.

Wel l~ I i m sure that was in there.
it is?

Absol utely.

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Do you understand that the corporation sole, what

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A.
Q.

Yes, I understand what a corporate sole is.

Okay.

What is a corporate sole i in your

unders tanding?
A.

A corporate sole is one person that is the

spiri tual leader of this part icular enti ty.
an ongoing, everlasting entity, and that its

It 's

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CENTRAL COURT REPORTING I-S00-442-DEPO Seattle - Bellevue - Yakima - Wenatchee

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WHAT IS A CORPORATION SOLE
A corporation sole is a esteemed creation consisting of one person only, and his

successors in some paricular position, who are incorporated in order to give them sole legal caacities an advantaes, paricularly tht of perpetuity, which in their natul person they could not have had. The cru of ths description is not that the corporaion
sole is composed of a single person. Raer, it is really composed of a nwnber of persons

who, one afer another, hold the same offce.
If the corporation sole is an overseer, bishop, or pator, etc. of a church organzation,

he/she becomes a trstee/steward of that mistr only in the capacity of the corpration sole offce. He does not become possessor of it. When he/she leaves the church/mi
for whtever reason, he does not tae the asets with hier. The succeeding
corpration sole then taes the offce of corporation sole and he/she becomes the
trtee/stewad of

the church/mistr.

The corpration sale is a paricular position of an offce. The offce is not created under
law, and is not under the junsdction of the state. The offce is recorded with the S~reta of State in a parcular stte for recogri:tion and existence that you are an
Ambassador of the Nation of Jesus COOst out of

the root of Abra's seed ofIsac.

A corporation sole is not a corporation in any way or fashion. A corpration is an
association of sharholders created under law, and regarded as an arificial person by the

cour for doing business. Man canot incorporate the tre body of Clinst. If man
attempts to inorporate Chrst's body, he desires to be other than Chrst's body.
If you are a pastor of a church, the congregation does not employ you for a salar. If so,

you ar considere an employee and income from the exercise of your mist is
employee. He/she is a sovereign in his/her own right and is fufillng the commsion the offce of

considered income frm waes for income ta puroses. A corpration sole is not an of
the religious order by performg services requied by tht order.

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WHAT IS A SUCCESSOR CORPORATION SOLE
A corpration sole successor is the one who is succeeded by an established corporation

sole in some pacular position who contiues the same spiritual care of the inbitants
of the churh/ministr. All the origina rights of the church/ministr are preserved

entirely to the successor.
When the corpration sole successor taes position of the established corporation sole,

he/she must record hisler offce of succession with the state of Nevada by sending a
copy of the corporation sole Resolution to the Secreta of State. Beth Ar will help
you with ths.

If the successor desires to be a corporation sole in hisler own right, aricles of

incorporation of hisAer title £offce) must be estalished in mslher own caacity. Ths
may be accomplished by contating Bethel Ar Ministes legal deparent at

[phone], or P. O. Box 2038, Dewey, Arzona 86327.

If you are corpration sole and you are not a pastor of a church or in a mist that you want to contiue on at your demise, and have assets you put in the mistres name, you
will want to form a Canon Law Tru to get the assets to your heirs. You canot give the
assets of the corpration sole directly to your heirs. Ths is ilegal nnder the statutes of

corpration sole. In a resoluton directive you will donae all the assets of the corpration
sole to the trst. Your heirs will be the beneficiar of the Canon Law Trust, thus

receiving the assets.
If you ar pator of a church and will be having another pasor or person of the church

become your successor, all your personal assets should b~ put in the Canon Law Trut. Any assets you put in the corpration sole wi go directly to the successor.
RIc Gadner of Bethel Aram Minstres is a Cerified Estte Planer with speial trg

in Business and Chartale Plang and will help you form your Canon Law Trut.

HOW TO DISSOLVE THE 501(C)(3) CORPORATION
To dissolve a 501(C)(3) corpration, you must cali the corporation commsion in your
state and ask what is the procedure to dissolve a non profit corpration. Every state is

different in ths procedure. Some sttes have a form tht must be filled out, others require

anytg.

a letter in the effect that you are dissolvig your corporation and others do not require

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If the church propert is not paid in full, a Quitclaim Deed would be made. The deed would be made out the same as the Warty Deed. The only difference would be the
heading would indicate Quitclai Deed intead of Waranty. After the propert is paid

off then a Waranty Deed could be made.
Form for either a waty deed or a quitclaim deed may be obtaned at any sttionar
store or real estate offce. If the corporation sole desires a professional deed. Bethel

Ar Ministres' legal deparent can provide this servce.

CHANGING THE PERSONAL PROPERTY OF A CORPORATION SOLE
If a corpration sole desires to place hislher personal propert (home) in the name of the corporation sole mistr, he/she may do so. If you are a corpration sole of a church
congrgation, it would be titled in the nae of the corporation sole, but will not include
the church naie. The home then can be exempt from the propert ta, and would protect

you from the probate system, liens, creditors, and judgments.

Example:
KNOW TO ALL ME BY THSE PRESENTS:

Tht (The Name that the home is in) the undersigned grantor, for the
consideration of Ten (10) Dollars, and other valuable considerations, do hereby

covey to (JOE SMIm, a corporation sole of ABC Ministry) all nght,
title...... ............

Lf the corporaon sole desirs to trfer the home and assets to their heirs, he/she must

place the home and assets in a Caon Law Tru that may also be obtaed from Bethel

Ar Minstes. Ths tr will protet you frm the probate system, liens, creditors, and
judgments, as would the corporation sole.

If you need any direction in changig your persona propert, feel free to call Bethel

Ar Minstres, and the legal deparen,t will help you.

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This is the best way of makng your check. If you are in personal ministr
you will NOT need to put Name of offce below the signatue line unless you
desire to.

INQUIRIES FROM IRS
Corpration sole is NOT a corporation according to IRS. It is not found in their
regulations. The reaon is it is not located in their reguations is beause it is not under
their jursdiction. Although it is in the sta of a non-profit organzation, it is not an

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organzation incorporated under their reguations. Corporation sole is totaly separte
from a regular corpration.

If the IRS makes inquires concerng the church/mistr, notify them tht you ar a
corpration sole. Ths will end their inquiry. Do not give them any inormation, e,xcept

that you are a corpration sole! If you receive anytg you do not understad, contat

Bethel Ar Minstres and they will help you. Don't fait, ths is not likely to ever happen, especially if you are workig the ministr as stated in your corporation sole aricles.

WORKERS AS MINISTERS
Remember, a corpration sole does not have employees. Any workers in your
church/mistr ar considered misters. An ordination certifcate must be made for
each worker designatig their capacity of mistr they will be perfonng for the

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corpration sole church/mistr. The certifcates ar available at any staionar store.
Be sure to purchae golden seasalso. They are to be placed at the bottom of the

certficae and sealed with the corpration sole seal. An example of a Certifcate is on

the ne page.
The workers are rewarded as a donation or monies for their support by the order of the
corporation sole without any ta deductions if the worker takes a Statement of Faith

(vow of povert). An example of a Workers Statement of Faith is on the next page.
The corporation sole does not have to issue a 1099 or W-2 form to the workers/ministers of the order. They are exempt from taation. But if they work outside the corpration

sole, they must fie on the wages they receive from the entity they work for. See IRS
publication 517 in section 5.

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CANON LAW TRUST
If you received a Canon Law Trut, be sure to read it carefully and sign your name where
indicated immediately.
The Canon Law Trust is used as a member of your LLC and for estate plamg. If you

do not have a LLC, it will be used for estate planng for the corporation sole.

Remember, you canot give, donate, or tranfer any asset in the corporation sole to your heirs directly. The only way you can get them to your heirs is by donation from the
corpration sale to the trt. The asset can never go dirctly from the corporation sole to
the heirs.

Afer you have signed you corporaon sole, wrte a resolution in the corpration sole
indicag that al assets of the corporation sole at the demise of the corpration sole ar

to be donated to the Canon Law Trut. Your heirs will be the beneficiares of the trst,
thus receivig the assets. If your spouse is your successor, she will wrte the resoluton
signed by her as successor to donate the assets to the trt.

If you are passing the corpration sole to someone other th your spus, and want a
porton of the asset to remai in the corpration sole and a portion be passed on to your

heirs, a resolution must be made indicatig the percentage you want to go to each entity.
If you ar a pator of a church, the church can be put in the nae of the corporation sale

for protection. If you are not plang to make someone that is par of the church to be
your successor to contiue the pasorate of the church, you may want to wrte a resolution

at your resignation or demise, the church propert is to be put in the name of XYZ and that you relinquish all rights to it afer your resignation or demise.
Personal assets can be put in the trt if you wish. I -suggest th your home corpration sale. If your state allows exemption

for mist propert, it can be taen off

be in the

the propert ta list as the parsonae, thus relieving you of propert ta.

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