how to start a church legally in Texas

Texas is not just the fastest-growing state in America. Religiously, it is also one with the largest number of churches in the USA, with over 27,848 churches. But does that mean that Texas no longer needs new churches?

Not really.

Despite having one of the largest congregations in America, there are still tons of communities in Texas that lack a church they can call their own. That’s probably why you’ve considered starting one in this state.

You need to do the following to get up and running.

Draft Your Church Bylaws and Belief Statement

Starting a church in Texas and most U.S. states is like starting a corporation. You need to draft and provide bylaws and a belief statement that defines the church’s mission, how it will be structured, and the beliefs it will follow.

You should consider the following when drafting your church’s bylaws:

• Why are you starting the church?
• Will the church participate in community outreach programs?
• Will the church perform weddings and funerals?
• Will fundraising be part of the church’s activities?
• Will you be committed to the church part-time or full-time?

You can get church bylaws templates and examples online, which will help you understand how you should format yours. 

You should also establish a board of directors for your church and a list of officers at this stage.

Structure and Name the Church

Starting a ministry has different legal, structural, and financial requirements than starting a church. Legally, a church has more complex processes and benefits than a ministry. A church also has more structural and financial needs.

You need to figure out whether you need plans for new buildings, employees to manage church activities, and, more importantly, the name you’ll give the church. The church’s name is used to address it legally and have the congregation reference it.

Get a 501(c)3 Status

It is not a must that you file with the IRS to get tax-exempt status. Churches affiliated with the Baptist General Convention of Texas can request a Letter of Determination from the Controller/Assistant Treasurer of Texas Baptists through the Cooperative Program.

However, if your church has ministry areas that require the IRS status, you will have to file for 501(c)3. These ministries may be separate organizations such as Soup Kitchens, Child Development Centers, or Crisis Ministries that raise support outside the normal stewardship channels of the church.

You must get the help of a competent nonprofit attorney to file for this status.

Get an Employer Identification Number and Open a Bank Account

Before officially incorporating your church in Texas and most U.S. states, you need to get an employer identification number or EIN. The IRS issues this number once all required paperwork has been submitted. 

You need to request and file form SS4 from the IRS to get the EIN. You can access this form on the IRS website or get a paper copy from your local library.

The EIN allows you to open a bank account for the church. It also allows the church to hire and pay employees through the opened bank account.

Most banks will require the following before opening a bank account for your church:

• Employer identification number
• Church bylaws
• Statement of Beliefs
• Statement of Faith
• Funds for the opening balance
• 501(c)3 status for tax exemption

Other banks will require more details than listed. It is best to get in touch with your desired bank to know their complete list of requirements for opening a church bank account.

File for the Certificate of Formation

The state of Texas requires a church to prepare a Certificate of Formation for a nonprofit organization before incorporation. This document should be prepared in hardcopy and then mailed to the Secretary of State in Austin. 

However, there’s a second and quicker method that can be done online. You can file the form online, pay the incorporation fees online, and get notified when the Secretary of State approves the incorporation.

Filing the Form Online

The Certificate of Formation can be obtained online through http://www.sos.state.tx.us/corp/forms_boc.shtml. The form you’re required to file is Form 202.

Once you’ve downloaded the word document file, fill in all the details required. There are a few details you need to ensure you’ve filled correctly:

• Under Article 2 – Registered Agent and Registered Office, you will designate an individual to serve as the registered agent. You should check both boxes B and C and ensure the appropriate information is provided in the boxes.
• On page 6, ensure you’ve checked the box “The management of the corporation is to be vested in the nonprofit corporation’s members.” Do not list any directors.
• Under Article 4 – Membership, check the box “The nonprofit corporation shall have members.”
• Under Article 5 – Purpose, you must have a church Constitution ready. Otherwise, you can create one using an online sample from sources like this one – http://texasbaptists.org/files/2010/10/Developing-a-constitution.pdf. You’re required to enter or copy and paste the purpose statement from the constitution into the box at the bottom of page 6.
• On page 7 – “Effectiveness of Filing”, check box A.

Handle Other Businesses Required by Texas Law After Incorporation

Once you’ve received the certificate of incorporation, Texas law requires some items of business to be handled immediately. These include:

1. At the first business meeting, the church must adopt its bylaws.
2. All assets must be transferred to the corporation’s name if the church owns any.
3. All documents and contracts should be changed to reflect the new corporate name.
4. The church must file for ad valorem tax exemptions if any real property is transferred.
5. The church may receive a letter from the State Comptroller’s Office related to Franchise Tax. Upon receipt, you need to go to http://www.window.state.tx.us/taxinfo/taxforms/ap-205.pdf and file a request for tax exemption. The form provided will walk you through the process.

For business items 2 – 4, you may need assistance from an attorney qualified in handling nonprofits.

Incorporate Technology into Your Church Management

Once you’ve completed the incorporation process of your church, you want to think about management. You’ll want efficient ways of communicating to church members, managing and making contributions, giving, and communicating about events in the church.

Grab good software that will satisfy the needs of your church in its formative stages up to its massive intended scale.