How to Start a Nonprofit Organization in Texas

501c3 Approval in Texas
There are five basic steps to starting a nonprofit organization in the state of Texas:

1.  File a Certificate of Formation with the Secretary of State that includes among other items your organization’s name, registered agent, registerd office, proper purpose and dissolution clauses, and the names and addresses of at least three board members, unless you choose to have members.

2.  Obtain a Tax ID Number, also called EIN (Employee Identification Number) from the IRS.  This can be done fairly easily and for no additional fee from the IRS website.

3.  Create a set of organizational bylaws.  Bylaws are a required part of your Form 1023 application packet when applying for federal tax exemption from the IRS.

4.  File IRS Form 1023 – Application for Recognition of Exemption with the IRS, including either a $400 or $850 user fee depending on your projected annual revenue.  It’s usually this step in the process when those doing most of the work themselves start looking for professional help.

5.  After obtaining tax exempt status from the IRS, Texas nonprofit organizations should submit their application for State Franchise Tax Exemption to the Texas State Comptroller’s office.

Those are your basic five steps to starting a nonprofit organization in the state of Texas.  Don’t hesitate to contact us for more information, or if you’re in need of professional assistance during the startup process.

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