Annual Nonprofit Reporting Requirements and Corporate Formalities

Nonprofit corporations enjoy several advantages and protections such as, tax exemption, access to grants, and limited liability. However, your organization can forfeit its nonprofit status by failing to maintain the required corporate formalities, those requirements a nonprofit corporation must follow to be legally compliant as a registered entity in the state. Every year, many nonprofits are forfeited by the state in which it is registered for failing to maintain corporate formalities. You can avoid such fate.  Texas nonprofit corporations are required to:

• Every four years, file an annual report with the Secretary of State that lists the corporation’s registered agent and registered office and the names and addresses of all directors and officers.
• If the nonprofit has not requested or been granted an exemption, file a franchise tax report annually, by May 15, with the Texas Comptroller.
• Maintain a registered agent and office and if such information changes, file a statement of change of registered agent and/or registered office with the Secretary of State.
• If the nonprofit is a private foundation, file a Form 990-PF with the Texas Attorney General.
• If the nonprofit is dissolved, file Articles of Dissolution with the Secretary of State. (The directors and officers may still be liable for certain types of claims if the nonprofit is not formally dissolved).

A nonprofit corporation can lose its charter if it fails to file the above. Nonprofits also have the following federal filing requirements:

•  File the appropriate “990 series” annual IRS return.
• If applicable, file the Donee information Return, Form 8282, to report the sale or disposition of certain donated property.

Warner & Associates recommends that you develop a compliance checklist specific to your organization that includes the above formalities, as well as, governance requirements, required employment filings, insurance renewal dates, record retention policies, policies for the maintenance of property tax exemptions, operational requirements, periodic review of bylaws and policies and procedures, and any federal, state, or local licenses filing requirements for its activities. Also be sure to keep current and accurate books and records.