Below are the steps to take to become incorporated. If an Affliliate is looking to incorporate it is advisable to seek guidance from a nonprofit attorney.
1. Establish a name
2. State recognition: Establish Articles of Incorporation and send to the state. Secretary of State, P.O. Box 13697, Austin, TX 78711-3697. Fee $25.00
3. You should receive a Certificate of Incorporation with a file number (also called a charter number).
4. Federal recognition and establish an Employer ID Number (EIN):
Apply by EIN Toll-Free Telephone Service - Taxpayers can obtain an EIN by calling the Business and Specialty Tax Line (800-829-4933). You will be assigned the EIN number over the phone.
Apply by Fax - Taxpayers can fax the completed Form SS-4 application to their state fax number, after ensuring that the SS-4 form contains all of the required information. A fax will be sent back with the EIN within four business days.
Apply by Mail - The processing timeframe for an EIN application received by mail is four weeks. Ensure that the Form SS-4 contains all of the required information. If it is determined that the entity needs a new EIN, one will be assigned using teh appropriate procedures for the entity type and mailed to the taxpayer.
Apply by EIN Online - This Internet EIN application www.irs.gov is another avenue for customers to apply for and obtain an EIN. Once all of the necessary fields are completed, preliminary validation is performed and the taxpayer will be alerted to information IRS needs that may not have been included. An EIN will be issued after the successful submission of the completed Form SS-4 online. Please note that not all business entity types may use this method.
5. Federal Exemption and Letter of Determination. To be exempt from paying federal taxes for your organization, you MUST file and request that your organization be exempt. If you apply for a 501 (c) 6 status (professional organization). Read the instructions carefully and complete the parts that apply to your organization in detail. You must submit form 1024 along with form 8718. Fee is determined by the amount of revenue you expect to generate yearly. This is a VERY important document - it will take approximately 6 months to get a letter back. IRS, P.O. Box 192, Covington, KY 41012-0192.
6. Franchise Tax Exemption: AP-204 through Texas Comptroller of Public Accountants. You must wait until you receive your federal determination letter (federal exemption) status to be able to apply for the franchise tax exemption. Just don't forget to do this or you will be responsible to pay! (No fee)
7. State Sales Tax: Generally, 501 (c) 6 federal exempt organizations do have to pay all state sales tax and charge sales tax for any merchandise sold. For example, TNP, Inc. must charge state sales tax on our brochures. You must have a permit in order to comply with the state. See form AP-201: Texas Application for Sales Tax Permit, Comptroller of Public Accountants, 111 E. 17th Street, Austin, TX 78744-0100. No fee
If the organization has any employees - this is another round of paperwork, applications, filings and payment plans.