How to Fill Out Texas Form 202: Agent, Directors, and 501(c)(3) Language

Texas Form 202 is the Certificate of Formation you file with the Texas Secretary of State to create a nonprofit corporation. The filing fee is $25, and you can submit it online through SOSDirect or by mail to the Secretary of State in Austin. Once accepted, your nonprofit exists as its own legal entity that can hold property, sign contracts, and operate independently of its founders. Before you open the form, line up two things: a cleared entity name and a registered agent with a Texas street address.

Check the Name and Line Up a Registered Agent

Your nonprofit’s name must be distinguishable from every other entity already on file with the Secretary of State. It can’t be identical or deceptively similar to an existing corporation, LLC, partnership, or reserved name.¹ The name also cannot imply the organization does business it isn’t authorized to pursue, or falsely suggest a government affiliation.² Run a free name search through SOSDirect before you fill anything out.³ If your preferred name is close to one already registered, you can get the existing entity’s notarized written consent to use it. One quirk worth knowing: Texas nonprofits are not required to include a corporate designator like “Corporation” or “Incorporated” in the name.

Every Texas nonprofit must also designate a registered agent, the person or entity authorized to receive legal documents at a Texas street address during business hours. A standalone P.O. Box does not qualify, though a commercial mail service address works if that business is the registered agent itself.⁴ You can act as your own agent if you have a qualifying Texas address, or hire a professional service, which typically runs between $49 and $300 a year.

Walking Through the Articles

Form 202 is organized into numbered articles. Here is what each one needs.

Article 1: Entity Name

Enter the full legal name exactly as you want it on file, matching what you cleared through the SOSDirect search. The form already identifies the entity type as a nonprofit corporation, so there is nothing to select there.

Article 2: Registered Agent and Registered Office

Enter the registered agent’s name and the street address of the registered office in Texas. The Business Organizations Code requires this information in the certificate of formation.⁵ If the agent is an organization rather than a person, use the entity’s legal name. Putting a P.O. Box here is one of the fastest ways to get the filing kicked back.

Article 3: Management and Initial Directors

Choose whether the nonprofit will be managed by a board of directors or by its members. A board-managed nonprofit concentrates authority in the directors and is the standard structure for most charitable organizations. A member-managed nonprofit distributes voting authority across the membership, which fits trade associations or social clubs.

If the nonprofit has a board, you must list at least three directors; Texas law does not permit fewer.⁶ Provide each initial director’s full name and address. Texas imposes no residency, citizenship, or membership requirements on nonprofit directors.

Watch the interaction between Article 3 and Article 4. If you select member management but then check a statement in Article 4 that only applies to a board-managed nonprofit, the Secretary of State will reject the filing.²

Article 4: Purpose and Supplemental Provisions

State the nonprofit’s purpose. Under the Business Organizations Code, the purpose can be as broad as “any lawful purpose” or as specific as you want.⁵ If you plan to apply for 501(c)(3) status, you will need specific IRS language here, covered in the next section. Article 4 also has a supplemental provisions area for any additional terms, and you can attach addendum pages if you need more room.

Article 5: Organizer

The organizer is the person who signs and submits the form. Only one is required. Enter that person’s name and address. The organizer does not need to be a director or hold any ongoing role in the nonprofit.

Effectiveness of Filing

The final section lets you pick when the nonprofit legally exists: on the date the Secretary of State files the document, on a specific future date no more than 90 days from signing, or on the occurrence of a stated future event within the same 90-day window.⁷ Most filers choose effectiveness on filing unless they need to align the start date with a fiscal year or funding milestone.

Add 501(c)(3) Language If You Want Federal Exemption

Form 202’s default text does not contain the language the IRS requires for a 501(c)(3) organization. If you plan to apply for federal exemption, add two specific clauses in the supplemental provisions of Article 4. Skip this and the IRS will almost certainly deny the exemption application, which means amending the certificate and paying another filing fee.

Purpose Clause

The purpose clause limits the nonprofit’s activities to purposes recognized under Section 501(c)(3). The IRS’s suggested wording states that the corporation is organized exclusively for charitable, religious, educational, and scientific purposes, including making distributions to organizations that qualify as exempt under Section 501(c)(3) of the Internal Revenue Code.⁸ You can adapt this to your specific mission, but the phrase “organized exclusively for” followed by one or more exempt purposes needs to be present.

Dissolution Clause

The dissolution clause dictates what happens to remaining assets if the nonprofit shuts down. The IRS requires those assets to go to another 501(c)(3) organization or to a government entity for a public purpose.⁹ The suggested language reads: “Upon the dissolution of this organization, assets shall be distributed for one or more exempt purposes within the meaning of IRC Section 501(c)(3), or corresponding section of any future federal tax code, or shall be distributed to the federal government, or to a state or local government, for a public purpose.”⁸

IRS Publication 557 contains sample articles of organization with these clauses already integrated and can serve as a template.¹⁰

Submitting the Form

You can file online or by mail. Both cost $25.⁷

Online Through SOSDirect

Filing electronically at direct.sos.state.tx.us is the faster route.¹¹ Create an account, go to the nonprofit corporation filing section, and type your information directly into the system. Do not upload a PDF of the paper form; SOSDirect has its own fields. Do not attach duplicate copies, payment information, or personal identifying information like Social Security numbers, because filings that include those materials will be rejected.² Online filers receive the acknowledgment by email once the document is approved.

By Mail

For paper filings, print and complete Form 202 and send two copies with a $25 check or money order to:⁷

Secretary of State
P.O. Box 13697
Austin, TX 78711-3697

Paper filings take longer because staff review them manually, and the acknowledgment comes back by mail.

Expedited Service

Three expedited tiers are available on top of the $25 filing fee:¹²

Same-day service, $750. Filing must be delivered in person by noon and is processed by close of business that day.
Next-day service, $500. Also requires in-person delivery by noon, with processing completed by end of the next business day.
Standard expedited, $50. Available by mail or in person. Filings are typically processed within two to three business days.

Paying to expedite does not guarantee approval. The document still has to pass the same review, so an error just buys you a faster rejection.

Why Filings Get Rejected

The Secretary of State reviews every filing for compliance before accepting it. The most frequent problems on Form 202:

The chosen name is too similar to an existing entity. The SOSDirect name search prevents this.
Article 3 and Article 4 conflict, such as selecting member management but checking a box that only applies to board-managed nonprofits.
A P.O. Box is listed as the registered office instead of a Texas street address.
Fewer than three directors are listed for a board-managed nonprofit.
Extra materials are attached to an online submission, such as instructions, duplicate copies, or payment information.

A rejection does not cost you the fee. The Secretary of State returns the document with an explanation of what needs to be fixed. It does cost time, which matters if you are working against a grant or IRS deadline.

After the Certificate Is Accepted

The accepted certificate creates the entity, but the nonprofit is not yet operational or tax-exempt. Several follow-up steps remain.

Get an Employer Identification Number from the IRS. Your nonprofit needs one before it can open a bank account, hire employees, or file tax returns, and the IRS recommends forming the entity with the state first.¹³ The online application issues the number immediately.

Adopt bylaws. Bylaws set internal operating rules such as how directors are elected, how meetings run, and what officers exist. The board should adopt them at its first meeting. Bylaws are not filed with the Secretary of State, but banks, grantmakers, and the IRS will want to see them.

Apply for federal tax-exempt status. Filing Form 202 does not make the nonprofit tax-exempt. That takes a separate IRS application on Form 1023, or Form 1023-EZ for smaller organizations that qualify, submitted through Pay.gov with a user fee.¹⁴ The IRS reviews your Certificate of Formation as part of the 1023 process, which is where the purpose and dissolution clauses in Article 4 come into play.

Apply for Texas state tax exemptions. Federal exemption does not automatically exempt your nonprofit from Texas taxes. You apply separately with the Texas Comptroller for exemption from franchise tax, sales tax on purchases related to the exempt purpose, and hotel occupancy tax for organizational travel.¹⁵ Not every organization qualifies for every category.

Adopt a conflict of interest policy. A written policy is not legally required for 501(c)(3) status, but the IRS strongly recommends one and asks about it on Form 1023.¹⁶ The policy governs situations where a director or officer has a personal financial interest in a transaction involving the nonprofit.

1
State of Texas. Texas Business Organizations Code 5-053 – Distinguishable Names Required
2
Office of the Texas Secretary of State. Form 202 — Instructions for Certificate of Formation – Nonprofit Corporation
3
Office of the Texas Secretary of State. Let’s Do Business
4
Office of the Texas Secretary of State. Registered Agents – Section: What Is a Registered Office?
5
State of Texas. Texas Business Organizations Code 3-005 – General Requirements for Certificate of Formation
6
Texas Public Law. Texas Business Organizations Code Section 22.204 – Number of Directors
7
Texas Secretary of State. Texas Nonprofit Certificate of Formation Form 202
8
Internal Revenue Service. Suggested Language for Corporations and Associations (Per Publication 557)
9
Internal Revenue Service. Does the Organizing Document Contain the Dissolution Provision Required Under Section 501(c)(3)
10
Internal Revenue Service. Publication 557 – Tax-Exempt Status for Your Organization
11
Office of the Texas Secretary of State. Business and Nonprofit Forms
12
Office of the Texas Secretary of State. Introducing Texas Express Expedited Business Filings
13
Internal Revenue Service. Get an Employer Identification Number
14
Internal Revenue Service. How to Apply for 501(c)(3) Status
15
Texas Comptroller. Tax Exemptions for Qualified Organizations
16
Internal Revenue Service. Form 1023: Purpose of Conflict of Interest Policy