An interesting and fulfilling experience can come from starting a charity organization. The Internal Revenue Service (IRS) must grant you 501c3 tax-exempt status before you can start your work, though. It can take some careful planning and adherence to federal and state rules to obtain a 501c3 in Texas. Depending on your organization’s size and complexity, Texas’s 501c3 application fee varies.
For organizations in Texas with yearly gross receipts of less than $10,000, the application price for a 501c3 is $275. The cost rises to $600 for groups with annual gross receipts of above $10,000. You must pay these fees to the IRS when you turn in your completed Form 1023, Application.
But the price of getting a 501c3 in Texas is not limited to the application fee. To help you negotiate the complicated application procedure, you might need to employ an attorney or accountant. Additional costs include filing fees, state incorporation fees, and annual report fees must also be covered.
Many business owners take into account various business forms in addition to acquiring a 501c3, such as an LLC or DBA. A common business form that provides personal liability protection for financial commitments made by the company is the Limited Liability Company (LLC). Doing Business As (DBA) is a made-up name that a company uses in place of its legal name.
While having many LLCs or DBAs can give your company flexibility and security, it can also be more difficult and expensive to operate. It could be preferable to have a single LLC or DBA that houses all of your enterprises.
In order to safeguard assets and restrict liability, an LLC can also be utilized as a holding corporation. A holding company is a business that exists only to own other businesses or assets. You must set up a new LLC and transfer the ownership of the current LLC to the new holding company in order to establish a holding company for an LLC. This procedure necessitates knowledge of both law and accounting and might be complicated.
Although an LLC has numerous advantages, it also has some drawbacks. Lack of uniformity in state regulations, the need to pay self-employment taxes, and restricted access to capital are some drawbacks of an LLC.
The complexity of your business will determine how much it costs to become a 501c3 in Texas. To ensure that you adhere to all rules and regulations, it is imperative that you get professional counsel. Although LLCs and DBAs can give your company flexibility and security, managing them can be difficult and expensive. It could be preferable to have a single LLC or DBA that houses all of your enterprises. And finally, while LLCs have a lot of benefits, there are a few drawbacks you should be aware of before beginning your company.