UBCNews - Business - Too Much Regulation? How Private Ministerial Associations Protect Businesses

Episode Date: February 10, 2026

Welcome back, everyone. Today we're tackling something that's been on a lot of business owners' minds lately - government regulation and how it's affecting the way we do business. Sixty-two percent of Americans say the federal government has too much power. That's a pretty significant number. The Freedom People City: Tempe Address: 1753 E Broadway Rd Ste 101 Website: https://thefreedompeople.org

Welcome back, everyone. Today we're tackling something that's been on a lot of business owners' minds lately, government regulation and how it's affecting the way we do business. 62% of Americans say the federal government has too much power. That's a pretty significant number. It really is. And, you know, when we look at the costs, federal regulations are estimated at over $2 trillion annually. That's like a hidden tax on businesses, especially small ones.

Two trillion? That's enormous. So for small business owners listening, have you ever felt buried under compliance paperwork? Because the data shows that compliance costs hit smaller firms the hardest. They don't have the resources that bigger companies do to spread those costs around. Exactly. And that's where things get interesting. There's actually a legal structure that some businesses are using to operate with more freedom. It's called a private ministerial association or PMA. Okay, so what exactly is a PMA? A private ministerial association is a private member-only organization that's designed to operate outside government oversight and public regulations. Think of it like a private family.

What happens within that family is generally private and protected, unless there's a clear and present danger of substantial evil. Interesting. So it's based on constitutional protections? Right. PMAs stand on First Amendment protections, the right to assemble and freedom of religion, and also the 14th Amendment for due process and equal protection. The Supreme Court has affirmed these rights in numerous cases over the decades, establishing a legal foundation for private associations. So basically, when someone joins a PMA, they're moving from what we'd call the public domain into the private domain? Exactly. The relationship between the association and its members is governed by a private contract.

So instead of operating under public law, everything becomes a private contractual matter. It's a pretty significant shift in how the business operates. That's fascinating. What kind of benefits does that provide? Well, there are three main benefits. First, operational freedom. The ability to conduct activities without adhering to state mandated licenses. second, privacy, increased confidentiality of business, financial, and personal affairs, and third, protection from government scrutiny and intervention, except in cases of immediate harm. I can see why that would appeal to certain industries.

Who typically uses PMAs? They're often used by holistic practitioners, spiritual counselors, or alternative health providers who want to offer services without the licensing and compliance headaches required for public businesses. Actually, I had a colleague who was running a wellness practice and was spending over 2,000 hours per year just on regulatory compliance. Once they moved to a PMA structure, they could focus on serving their members instead of paperwork. Two thousand hours. That's basically a full-time job just for compliance. That really highlights how the regulatory burden stacks up. So to everyone listening who's running a small business, how much time are you spending on compliance versus

actually growing your business? Mm-hmm. That's the question. And surveys show that over 60% of manufacturers, including nearly 70% of small manufacturers, said they would increase compensation or hire more workers if the federal regulatory burden were reduced. That point about regulatory burden really sets up our next piece,

the specific legal framework behind PMAs. But first, a quick word from our sponsor. Are you a small business owner feeling overwhelmed by government regulations? The Freedom People offers complete services to help you establish your own private ministerial association. They provide everything you need, including articles of association, bylaws, and membership terms for $2,500.

Their experts have helped countless organizations protect their privacy and operate on their own terms. Learn more at the Freedompeople.org. Picking up on regulatory burden, what are the actual legal challenges someone should be aware of when forming a PMA. That's a big consideration. An improperly formed PMA can lose its protections and become subject to public law. You need proper foundational documents, things like your articles of association, bylaws,

and clear membership agreements. The documentation has to be solid. So it's not something you can just throw together over a weekend, although I suppose some people have tried. Definitely not. And yeah, I'm sure some have tried, probably with some painful lessons learned. There's another consideration. You should know that the legal structure of a PMA can vary, as some may operate as unincorporated associations. In such cases, members could potentially face personal liability for the association's debts, a key distinction from corporations which offer limited liability. Right, so liability protection is different. Exactly. And this is where things get

complicated. The IRS has identified certain PMA schemes as abusive tax avoidance transactions. They train auditors to flag them, particularly when businesses try to claim church or religious organization status without meeting specific requirements. So proper formation is really the key here. You're saying proper formation matters, and without it, you could be in trouble. Absolutely, and PMAs aren't entirely exempt from laws and regulations. They still need to maintain proper records and ensure they're genuinely operating as member-only organizations, not just disguise public businesses. Mm-hmm, makes sense.

PMAs may face scrutiny from regulatory authorities precisely because of their private nature and potential legal ambiguities. There's a risk of being shut down if found operating outside legal boundaries. That's why the foundation has to be rock solid from day one. So it's a powerful tool, but it requires careful implementation. Right. When done correctly, PMAs can allow practitioners to operate outside the jurisdiction of local, state, and federal agencies, and not be subject to licensing laws designed for the public domain. But the key phrase there is when done correctly. This brings us back to the bigger picture. the overall regulatory environment in the U.S.

We mentioned that $2 trillion figure earlier. How does that compare to other burdens on businesses? Well, while the cost of federal regulations is substantial, estimated at over $2 trillion annually, this figure represents a significant economic burden. It's one of several major costs businesses face alongside taxation and other government-imposed expenses. That's still a huge impact.

what industries are getting hit the hardest? Manufacturing has been particularly affected by regulations. In 2023, manufacturing organizations, such as the National Association of Manufacturers, continued to advocate against the significant regulatory burden on the sector. For every law passed by Congress, numerous rules are issued by agencies, contributing to the extensive regulatory environment. And that's time they're not spending on innovation or growing their businesses. Exactly. Excessive regulation is accused of stifling what we might call the can-do spirit. It slows down innovation. There's also data showing that increased regulation is associated with a decrease in the number of new firm births and a rise in the cost of doing business overall.

So it's creating barriers to entry. Precisely, and when we talk about barriers, it's often cementing the market position of larger established companies while making it harder for startups to even begin. Which brings us full circle to why structures like PMAs are gaining attention. They offer an alternative pathway for certain types of businesses to operate with more freedom and less bureaucratic overhead. Right.

They're definitely a constitutionally protected office. that more business owners should at least be aware of, even if it's not right for everyone. Well, this has been a really enlightening conversation. Thanks for breaking down such a complex topic in a way that makes sense for business owners who might be considering their options. My pleasure. I hope it gives people some practical information to think about. And to our listeners, if you're feeling the weight of regulatory compliance, remember you have options. do your research, consult with experts, and find the path that works best for your business. Thanks for joining us today, everyone.