Forming a Non-Profit

A non-profit organization is characterized by the fact that any surplus funds in the organization are not given as profit to the owners, directors, members or employees, but rather put back into the organization to keep it running. A majority of non-profits also go through the process of incorporation, which allows them to receive recognition from the state as a non-profit corporation and to receive tax-exempt status, if they qualify. If you are forming an organization intended to benefit your community in some way, forming and incorporating as a non-profit can greatly benefit you in seeking grants and other funds.

How to Incorporate

There are several necessary steps to incorporating as a non-profit:

• Check with the Texas Secretary of State as to the availability of the name you hope to use. You may not use a name that is the same or very similar to another organization, and you need your organization’s name in order to begin incorporation.
• Create your certificate of formation. This document details information the Secretary of State will need, such as your organization’s purpose and how you will handle excess funds. If you are going to apply for tax-exempt status, it is important that this document contains 501(c)3-compatible language.
• File your certificate of formation with the Secretary of State. You must send duplicate copies and a $25 fee.
• Create your by-laws. These are the rules that detail how your organization will be run.

There are many specific rules as to how each of these steps should take place. The process of incorporating a non-profit can be complex, and your organization may want to seek legal advice.

Contact Us

If you are considering forming a non-profit and would like legal advice on this process, contact the experienced Texas business lawyers of Slater, Kennon & Pugh, LLP, at 512-472-2431 today.