The CORPORATION SOLE

VOW of POVERTY

A person who has been initiated into a Religious Order may take a vow of poverty at any time during their membership in the Order.

The vow of poverty is not to be interpreted as being for ever poor, but rather to sharing everything in common. Those who embrace a vow of poverty do not claim private ownership of any possessions: everything they have is used for the common good of the Religious Order

In return for the services and any income of the participant, the Order provides the participant, and his/her dependents if necessary, with all their material needs. Depending upon the activities of the individual, this may extend to private housing, transportation when needed, food and clothing, healthcare and any other service needed to maintain physical, emotional and spiritual health.

The relevance of taking a vow of poverty might well be questioned. Especially when the world as a whole is trying to eradicate poverty.There does not appear to be any sin in having abundance as a goal, and there is enough wealth in this world to provide everything a person could need. (It may well happen when N.E.S.A.R.A. is implemented) . It is fuelled mainly by the biblical reference: it is "easier for a camel to pass through the eye of a needle than for a rich person to enter the kingdom of God." (Luke 18:25) Easier, but not essential. A life of hardship is neither necessary nor righteous. This would be a personal judgment. Poverty must also be considered relative.

It removes the element of competition: everyone works as a team, in a community. At least, that is the objective. It is in fact more in tune with the byword for the 21st century, which is cooperation rather than competition.

One negative feature of the Vow of Poverty is that it impresses upon the unconscious mind that wealth is undesirable and therefore it does not attract wealth to that individual (nor to the Order).

One financial advantage is that those who elect to take this vow of poverty would be no longer liable for income tax and contributions (in Canada) to Canada Pension Plan, and Unemployment Insurance would also cease. Employer deductions also cease, eliminating in effect a double deduction when an individual is self-employed. At current rates (January 1987) the deductions amount to $1,092.26 p.a. for the individual and $1,351.24 for the employer. This should not however be a consideration In deciding whether or not to take such a vow.

Income, when made over to the Order and classified as earned income, is NOT taxable. When tax is deducted automatically at source, this is refundable at year-end, once an income-tax return has been filed. Income which Is unearned, such as interest, dividends, other investments etc continues however to be taxable.

The Order must certify annually that a person has taken a vow of perpetual poverty and has transferred all earned income, superannuation and pension benefits for the current year to the funds or account of the religious order.

In the U.S. the rules are similar. No returns are required under § 6033 (a)(2)(A)(iii) for "the exclusively religious activities of any religious order". SECTION 1402 (c)(4) reads:
"the performance of service by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order" Is not considered a "trade or business" when used with reference to self-employment.

It should be noted that despite the fact that a person has signed a vow of perpetual poverty, it is not Irrevocable, and the person can be released from this vow at a future date, should circumstances warrant it or the person change his mind. However, no person should contemplate taking such a vow if the intention at that particular point in time is not to continue permanently thereunder.

Although a vow of perpetual poverty may be taken by its members this does not preclude the Order itself from owning corporately any estate or effects.

© COPYRIGHT 1987 Milson Macleod

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© Dr Milson Macleod Jan 2000

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