How to Start a Nonprofit Corporation in Texas

You can start a nonprofit corporation in Texas online for less than $70 in total fees. You don’t have to be a resident of Texas, but you do have to be over 18 years old. Here’s a guide to completing the paperwork.

Difficulty: Moderate

Instructions

1. Open your web browser, and enter the website address of the Texas Secretary of State (SOS) at www.sos.state.tx.us. On the top icon menu bar, roll over the ‘Corporations’ tab to get a drop-down menu. Click on "Business and Nonprofit Forms."

2. Click on the PDF or Word format for form #202, "Certificate of Formation for a Nonprofit Corporation." Print out the document, which includes instructions and a two-page certificate form. You can fill out a hard copy to use as your application, or just use it as a guide for online filing.

3. Search for registered nonprofit corporation names to make sure the corporation name you want to use is not already used. A fee of $1 is charged for each online search. On the Texas SOS website, roll over the "Corporations" tab again, and click on "SOSDirect" in the drop-down. Scroll through the text page that explains SOSDirect, and click "enter site."

4. Enter your user ID and password if you already have them, or click on "submit a request for SOSDirect account" to start a new account. Enter your full name to sign in as an individual and click "continue." On the next web page, you will have to enter more personal information, including a valid credit-card number, and charge a minimum of $1 to your account to get started.

5. Sign in to SOSDirect, and click "Business Organizations" on the top menu bar. Click on "Name Availability Search" to see if there are any identical or similar names in use. To get assistance in determining corporation name availability, email a request to [e-mail]. There is a $40 fee to reserve an entity name, which you will be billed for after the SOS determines that the name is available.

6. Fill in the name of the nonprofit corporation once you have verified that the name is available. Enter your name and address as "registered agent," unless you have somebody else representing you, like a lawyer or accountant. If you live outside Texas, your registered agent must be located and registered in Texas.

7. Fill in names and addresses of three directors, unless you want the nonprofit corporation to be managed solely by its members, in which case you just mark the box below the fields for directors. Make sure you discuss the appointment of directors before you fill in the information. You can use post-office boxes or business addresses for directors for security purposes.

8. Check Box A in Section 4, unless you filled in the directors' information and want the board of directors to have sole management of the corporation. Fill in the purpose statement in Section 5, adding additional text in the box below to clarify the tax-exempt nature of the corporation under federal and Texas tax laws.

9. Fill in your name as "organizer," and check off an option for the effective date of organization. Finally, date and sign the form. The form can be mailed with a $25 check to the Texas SOS at the mailing address on the form, or you can enter the information on the form online by going to SOSDirect and following instructions for "business organization."

Tips & Warnings

• Nonprofit corporations that have a certificate of federal tax exemption are exempt from Texas State Franchise taxes. A copy of the federal exemption certificate must be filed with an exemption request to the Texas secretary of state.
• Federal tax exemptions for nonprofit corporations are described on the IRS website at www.irs.gov/charities/index.html.

Resources

• Texas Secretary of State Website
• IRS Nonprofit Information

[j2f2]

on 10/2/2009 Hello my name is Jennifer Jones-Fisher and I would love to be able to speak with you just to pick your brain over my non-profit please email me at [e-mail]...you can also check out my website at j2f2.org