In Texas, the Secretary of State oversees the creation and management of all non-profit organizations. The state categorizes non-profit organizations into five types -- charitable, homeowners, educational, religious, and federal and all others. When creating a non-profit, the group decides whether to become a-non-profit corporation or an unincorporated non-profit association.
To become a non-profit corporation, the entity must file a certificate of formation with the Texas Secretary of State. As a non-profit corporation, the organization may not distribute any income to members, directors or officers. The Certificate of Formation for a Nonprofit Corporation form is located on the Secretary of State website. The group can mail or fax in the completed form, or complete it online through the Texas SOSDirect online portal.
Unincorporated Non-Profit Associations
According to the Secretary of State and the Texas Business Organizations Code, the state defines an unincorporated non-profit association as any group with three or more members who have a common, non-profit purpose. A unincorporated non-profit does not have to file anything with the Texas SOS to operate as a non-profit unless it wants tax-exempt status.
Earning Tax Exempt Status
Gaining tax-exempt status requires filing with both the Internal Revenue Service and the Texas Comptroller of Public Accounts. For federal status, the organization must file IRS Form 1023. At the state level, the organization files for tax exempt status by submitting the proper form to the Texas Comptroller of Public Accounts. The form it files varies depending on the type of non-profit organization it is, such as charitable, educational or religious.
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