A nonprofit corporation is created by filing a Certificate of Formation with the Secretary of State. See Form 202 (Word, PDF). A “nonprofit corporation” is a corporation no part of the income of which is distributable to members, directors, or officers. A nonprofit corporation may be created for any lawful purpose, which purpose must be stated in its Certificate of Formation.

A Texas nonprofit corporation is not automatically exempt from federal or state taxes. To become exempt, it must meet certain requirements and apply with both the IRS and the Texas Comptroller of Public Accounts.

Generally, political and social action activities are permissible purposes for a nonprofit corporation; however, certain activities may affect a nonprofit corporation’s tax-exempt status. For more information, contact the Texas Ethics Commission, (512) 463-5800, the Federal Elections Commission, or the IRS.

Exemption from federal taxes is determined by the IRS. IRS Publication 557, “How to Apply for Recognition of Exemption for an Organization,” describes the rules and procedures for requesting exemption. Questions about federal tax-exempt status can be directed to: Exemption from Texas state taxes is determined by the Texas Comptroller of Public Accounts . Questions can be directed to:

The Texas Non-Profit Corporation Act and the Texas Business Organizations Code require a nonprofit corporation to have at least three directors, one president, and one secretary. The same person cannot be both the president and secretary. Officers and directors must be natural persons.

The Attorney General has statutory authority to (1) investigate charities that operate as nonprofit corporations, and (2) inspect the books and records of all corporations, including nonprofit corporations. The Secretary of State has no such authority.

The Texas Non-Profit Corporation Act and the Texas Business Organizations Code require nonprofit corporations to maintain financial records and minutes of certain proceedings and make them available to members for examination and copying. The board of directors is required to prepare or approve an annual financial report. In general, all records, books, and annual reports must be available to the public for inspection and copying.

Yes. Name reservations are now “generic” and can be used to form any type of filing entity.

Yes, Seedlings is a 501c3 organization. Nonprofit status was requested and granted in 1984 so that donations could be obtained to subsidize the cost of book production. Braille books are very expensive to produce, but with the help of grants and donations, we are able to make our braille books available at a much-reduced cost (at an average of approximately $10 per book!)

In most states, the first step is the filing of articles of incorporation with the secretary or state. The statutes of the state of incorporation determine the contents of the articles of incorporation. After filing of the articles of incorporation, tax-exempt status must be applied for at both the federal and state levels. The nonprofit corporation must conform to corporate formalities by holding annual meetings of directors and members.

A nonprofit corporation formed under IRS code Section 501(c)(3) may be formed and organized to operate for some religious, educational, literary, charitable, or scientific purpose. It must be noted that a nonprofit corporation may also be formed for other purposes pursuant to various other sections of the IRS code.

Under Internal Revenue Code Section 501(c)(3) a nonprofit corporation is eligible for certain federal tax exemptions, which can amount to significant, tax savings. Just like a for-profit corporation, nonprofit corporations receive the same limited liability protection. Thus, the directors, trustees, and officers of a nonprofit corporation are not personally liable for the debts and liabilities of the corporation.

The main disadvantage would be an increase in the paperwork. Articles of incorporation must be prepared and filed with the appropriate state agency, bylaws have to prepared, and minutes have be maintained and certain federal and state tax exemptions must be timely filed to obtain a tax-exempt status.

A domestic corporation is incorporated according to North Dakota's laws while a foreign corporation is incorporated according to the laws of another jurisdiction that may be another state, or a country outside the United States.