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What Is a Nonprofit Corporation?
A non-profit organization, also known as a not-for-profit organization or simply "nonprofit," is a type of corporation that operates for purposes other than generating profit. Non-profits are often formed to pursue social, cultural, charitable, religious, educational, or scientific goals. These organizations can be found in virtually every sector of society and play a crucial role in addressing various needs and issues within communities.
If you have plans to form a nonprofit organization, our legal team has the resources and experience needed to provide effective support. All nonprofits are governed by the Texas Business Organizations Code. Understanding the regulations and laws involved in forming a nonprofit is crucial, especially if you want to start on a solid foundation. When you work with a Dallas nonprofit lawyer at Perliski Law Group, you can rest assured that we will provide the counsel you need to make the best choices for your nonprofit.
Ready to get started on your Texas nonprofit organization? Call our Dallas lawyer for a 501c3, 501c4, 501c5, 501c6, and 501c7 at (214) 865-7542 today.
Types of Nonprofits We Can Help With
One of the first steps you will need to take is determining what type of organization you want to form.
We work with clients who wish to form the following types of nonprofits:
- 501(c)(3): Churches, religious organizations, scientific organizations, and charitable nonprofits.
- 501(c)(4): Social welfare organizations and employee associations (e.g., neighborhood watch and lobbying organizations).
- 501(c)(5): Any type of agricultural or horticultural organization.
- 501(c)(6): Real estate boards, business leagues, and other business network organizations.
- 501(c)(7): Any type of social or recreational club.
Nonprofits are called 501(c) organizations because they adhere to Section 501(c) of the Internal Revenue Code. These organizations are also tax-exempt, but in order to earn that exemption, you must secure IRS recognition and tax-exempt status.
To start your own nonprofit in Texas, you will need to file a certificate of formation with the Secretary of State.
Using Form 202, you will need to do several things:
- Name your organization
- Appoint a registered agent
- Introduce management
- Outline the purpose of your organization
- Determine whether your nonprofit will have members.
How to Start a Nonprofit in Texas
As confusing as it seems, many sections of Form 202 require other documentation. For example, you must use Form 401-A to appoint a registered agent and reserve your business name using Form 501 or Form 503. The Texas Secretary of State may also ask you for additional documentation, such as a periodic report for nonprofit organizations (Form 802).
How to Incorporate a Nonprofit in Texas?
Under Texas law, you do not have to incorporate your charity or nonprofit organization with the State. If you are starting a law-enforcement-related organization, a public safety organization, or a veteran organization, however, you and your solicitors may need to register with the Office of the Attorney General (OAG) or the Secretary of State, especially if you plan to solicit funds via phone.
Even though they don’t have to, most charities and nonprofit organizations choose to incorporate for the tax benefits and other legal protections afforded by Corporate law.
No organization is automatically tax-exempt. To become exempt, even charities and nonprofits must meet certain requirements and apply with both the Internal Revenue Service (IRS) and the Texas Comptroller of Public Accounts.
Nonprofit Tax Exempt Form
Filing Form 202 (see above) and incorporating your nonprofit organization can make it easier to achieve tax exemption at both the state and federal levels. To request tax exemption from the IRS, you will need an employer identification number (EIN) or tax identification number, and you will need to apply for exemption under Section 501(c) of the Internal Revenue Code. The IRS requires nonprofits to use Form 1023 and cautions that the form takes several hours to get familiar with and several more hours to complete. When you file Form 1023, you must pay a $600 user fee, as well.
The State of Texas also offers tax exemptions for qualified organizations. You can apply with the Texas Comptroller of Public Accounts using Form AP-204, Texas Application for Exemption. To learn more about the tax exempt form for nonprofits, call our attorneys at Perliski Law today.
Who is the Registered Agent of a Nonprofit in Texas?
In Texas, the registered agent of a nonprofit organization can be an individual or an entity that meets the state's requirements.
- Individual: A member or officer of the nonprofit organization can act as the registered agent, provided they have a physical address in Texas where legal documents can be delivered.
- Third-Party Service: Nonprofits can also hire a professional registered agent service or a commercial registered agent company to fulfill this role. These services specialize in receiving and handling legal documents on behalf of organizations.
It is important to note that the registered agent must have a physical address in Texas, as a post office box or virtual address is not acceptable.
Perliski Law Group can help you fill out your forms correctly, so you do not lose money from expensive filing fees. We can also help you stay compliant with state and federal tax laws over time.
When you start a nonprofit, you are also starting a business, so you should think about how you want your business to be run. We can help you draft your organization’s bylaws (or your church charter) and avoid conflicts of interest, as well.
If ever state or federal governments have questions for you – about taxes or anything else – our firm can help you answer them! We support churches, charity organizations, and all other nonprofits, and we provide nonprofit formation services on a flat fee basis.
We bring years of experience and expansive knowledge to your nonprofit, giving you the confidence that you need to navigate the complex tax-exempt sector. Whether you need help making your vision a reality or require sophisticated counsel on compliance with the Office of Foreign Asset Control (OFAC) to address foreign aid in war-torn countries, our firm has the experience to assist you.
Our attorneys actively represent many 501(c)(3) public charities that promote the arts and scientific research, provide humanitarian aid and spiritual guidance, or lend a hand up to the homeless and underprivileged.
- Forming charities, foundations, churches, and business leagues
- Securing IRS tax-exempt status for nonprofits
- Governing churches and other nonprofits
- Documenting board meetings and attendance
- Avoiding conflicts of interest
- Disclosure and documentation
- Compensating executives
- Charitable contributions and capital campaigns
- Planned giving (charitable trusts)
- Corporate sponsorships
- Charitable solicitation, registration, and compliance
- Unrelated business activities
- For-profit subsidiary formation
- UBI tax issues
- Trademark and licensing agreements
- Drafting and reviewing contracts
- Compliance review for lobbying activities
- Preparing IRS Forms 1023, 990, 990-EZ, and 990-T
Our clients are alumni organizations, cancer research charities, churches, community gardens, animal rescues, drug rehabilitation clinics, food pantries, homeless outreach organizations, job training and education groups, ministries, school booster clubs, scientific research committees, organizations that support the arts, Veteran’s groups, women’s shelters, and youth sports leagues.
We are Dallas-Fort Worth nonprofit attorneys.
Forming a nonprofit organization can be challenging. Don’t do it alone. We encourage you to seek legal counsel, and we would be happy to help.
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