Nonprofit Corporation

In order to be considered nonprofit, a corporation must have been formed for a purpose other than the financial benefit of its shareholders. Also, a nonprofit corporation cannot pay any dividends or other financial rewards to its shareholders. There are specific Texas laws for nonprofit corporations. To receive tax- exempt status, an organization must first incorporate as a nonprofit corporation. After incorporation, applications for tax- exempt status must be filed with the Internal Revenue Service and the Texas Comptroller of Public Accounts. In order for contributions to the organization to be tax deductible, other requirements must be met. Certain charitable organizations also may face additional requirements. Additional information about nonprofit corporations can be found in the Associations & Nonprofit Corporations Law Chapter.