Forming a Nonprofit Corporation in Texas [1]

Here are the steps to form a nonprofit corporation in Texas. You should read this page in conjunction with the general section on forming a nonprofit corporation [2] [2], which has additional steps listed that are applicable to all states. You should also familiarize yourself with: Title 2, Chapter 22 of the Texas Business Organizations Code [3] (abbreviated here as "Texas Bus. Orgs. Code"). The Texas Secretary of State's page on Nonprofit Organizations [4] and Nonprofit FAQs [5] may also be useful.

1. Choose a business name and check for availability

• Your nonprofit corporation's name may not be the same as, or deceptively similar to, other corporate names on file with the Secretary of State (limited exceptions apply).

• The Texas Secretary of State can provide a preliminary determination of business name availability. Call (512) 463-5555, dial 7-1-1 for relay services, or e-mail your name inquiry to corpinfo@sos.state.tx.us.

2. Recruit and/or appoint directors

• You must have at least three directors for your nonprofit corporation.

• Directors do not have to reside within Texas, nor do they have to be of a certain age.

3. Incorporate your Nonprofit Organization

You should read the general section on forming a nonprofit corporation [2] in tandem with the steps outlined here.

a. Prepare and file articles of incorporation with the Secretary of State

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• Articles of Incorporation for Nonprofit Corporations [6] explains what to include in your articles in order to qualify for 501(c)(3) tax-exempt status.

• Use Form 202: Certificate of Formation for a Nonprofit Corporation [7] to create your articles of incorporation.

• You must file 2 copies of Form 202 with the Secretary of State [8].

• The filing fee is $25.

• Click here [9] for a sample articles of incorporation.

• Note that you will have to file a periodic report [10] with the Office of the Secretary of State every four years after incorporation.

b. Create the bylaws

• There are no set criteria for the content of bylaws, but they typically set forth internal rules and procedures.

• You are not required to file bylaws with the Secretary of State, but you must keep a copy at the nonprofit corporation's principal place of business.

• Refer to Bylaws for Nonprofit Corporations [11] for general information.

c. Hold an organizational meeting

• See Forming a Nonprofit Corporation [2] for details.

d. Create a Records Book

• You will need a records book to store important documents concerning your nonprofit corporation.

• See Texas Bus. Orgs. Code § 3.151 [12] and Texas Bus. Orgs. Code § 22.352 [13] for specific information about record-keeping requirements under Texas law.

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4. Get your Employer Identification Number

Whenever you hire an employee in Texas, you must inform both the IRS and the state of Texas.

a. Federal

• Request an Employer Identification Number ("EIN") from the IRS. This can be done via an online application [14].

• For more on the EIN, see Forming a Nonprofit Corporation [2].

• The IRS details all of the necessary steps to complete, including verifying work eligibility and withholding allowances certificates, in Hiring Employees [15].

b. State

• Refer to the Texas Employer Portal [16] for more information.

5. Register with the Department of Revenue

• You must register for taxes online using the Texas Employer Portal [17].

6. Apply for tax exemptions

Once you've incorporated as a nonprofit corporation, you can start applying for tax exemptions.

a. Federal

• The IRS lists a series of questions [18] to help you determine whether your organization is eligible for federal tax exemption.

• See Applying for 501(c)(3) Tax Exemption [19] for more information on how to apply for tax-exempt status under section 501(c)(3) of the tax code.

b. State

• Submit Form AP-204, Application for Exemption [20] to the Comptroller of Public Accounts [21] for state income tax exemption.

• Refer to the Texas Comptroller of Public Accounts' Guidelines to Texas Tax Exemptions [22] for more information.

c. Local

• See Forming a Nonprofit Corporation [2] for details.