Did you know there were 1,571,056 tax-exempt nonprofit organizations in 2016 alone? That number includes public charities, private foundations, and civic leagues.
This means there is plenty of room for your business ventures when it comes to forming your very own nonprofit. But you’ll want to familiarize yourself with federal and state regulations.
Let’s take a look at the most basic steps of how to form a Dallas NonProfit Organization. Keep in mind that these are the minimum steps and depending on your organization and the type of work you do it is best to consult with an experienced attorney to make sure you are taking all the steps you need to take. Bearing that in mind here are some and not ALL of the basic steps:
1. Decide Who’s Going to Be Calling The Shots
In the state of Texas, all nonprofits must have a minimum of 3 directors on the board.
You’ll want to decide who will be making the final call on decisions for your company. While it’s important to ensure every member of your nonprofit has a voice and contributes ideas, you’ll want to have people who have the final say to keep things running smoothly.
2. Pick an Effective Name
The brainstorming of your nonprofit’s name can be fun and engaging. Think about what you stand for. What are your nonprofit’s goals?
What do you hold most dear in its mission?
These are things to consider when choosing a name that’s simple, short and memorable. You’ll also want to check the availability of any name you’re considering.
In Texas, you’re not allowed to have a nonprofit name that is the same or even closely resembles any other name in use. Do your research thoroughly.
3. Gather and File Your Nonprofit’s Organizational Materials
You’ll want to be organized at the outset to prevent delays down the road.
Business Licenses, Permits, and EIN
Obtain your nonprofit’s business license and any permits required in Dallas. Be sure to represent your company’s mission and intentions clearly and accurately.
Also, you’ll need to acquire your Employer Identification Number (EIN). This will be used for tax purposes for your nonprofit.
4. Meet With Your Board of Directors
You’ll next want to schedule a meeting with your company’s board of directors. During the first organization meeting you will want to accomplish many things.
Governing Policies and Procedures
Address the overarching policies of your nonprofit. What are the expectations you have for your employees? What steps will be taken if these expectations are repeatedly ignored?
Create Bylaws for Your Dallas Nonprofit Organization
You’ll need to establish bylaws for your company to ensure you comply with the federal, state and local laws for nonprofits. Setting up customized bylaws that anticipate future growth and possible exit strategies is critical. Don’t just use a template. Remember this is where having an attorney to guide you on best practices can be very helpful. Keep in mind that you should not be relying on an accountant or CPA to provide you with legal advice regarding the management of your organization.
Arrange a Corporate Record Folder
You’ll want to have a binder with all the records for your business. How will you track progress? Goals? Areas that need to be tweaked?
Familiarize yourself with the newest employment, tax, and corporate laws to ensure your company complies with the federal, state and local laws. Whether you plan on using volunteers or employees plan on how you will keep records on them and set up basic management policies for your organization.
Decide what type of fundraising and other methods you’ll use to spread the word about your organization. Be sure to accurately report any income your nonprofit brings in from these ventures, as well. Will you have members? How will you keep track of membership creation, revocation, termination and maintenance.
5. Acquire Tax Exemptions
You’ll want to have strategic planning when it comes to taxes. Report accurately, and also educate yourself on everything that can and can’t be written off in your taxes.
Obtain your nonprofit’s federal and state tax exemptions. Be sure to keep impeccable documents of your company’s daily operating procedures.
These will come in handy when it comes time to file taxes.
Forming Your Very Own Dallas Nonprofit Organization
You’re about to launch into an exciting and dynamic endeavor as you begin the formation of your nonprofit. There will be high points and low points. Using an attorney to minimize any anticipated risks and pitfalls when setting up your nonprofit can save you a lot of time and grievance along the road. You should always make sure you are setting the best foundation you can in forming your organization for building future success.
You can also greatly reduce the low points by staying up-to-date on regulations and potential legal issues.
If you’d like legal support while forming your own Dallas nonprofit organization, check us out today!