Presentation on theme: "“STARTING A NON-PROFIT ORGANIZATION and BUSINESS” Presented by the: (This presentation is available for download off the ONE STOP BUSINESS CENTER Website.)"— Presentation transcript:
“STARTING A NON-PROFIT ORGANIZATION and BUSINESS” Presented by the: (This presentation is available for download off the ONE STOP BUSINESS CENTER Website.)
City of Houston ONE STOP BUSINESS CENTER Houston Business Solutions Center 832.393.0954 (3-1-1) Office of Business Opportunity 611 Walker St., Lobby www.houstontx.gov/onestop email@example.com
One Stop Business Center (OSBC) “The Office of Business Opportunity is committed to creating a competitive and diverse business environment in the City of Houston by promoting the growth and success of local small businesses, with special emphasis on historically underutilized groups by ensuring their meaningful participation in the government procurement process.” THE ONE STOP BUSINESS CENTER IS A COMPREHENSIVE BUSINESS RESOURCE FOR HOUSTON AREA ENTREPRENEURS.
ONE STOP BUSINESS CENTER Services GETTING STARTED PACKET: Provides concise, FREE information, which helps businesses concentrate on marketing, competitive and growth COMPLIANCE: Helps businesses comply with local, state, and federal regulations TECHNICAL ASSISTANCE: Referrals to sources of counseling, mentoring, networking, incubators, workshops, and education FINANCING INFO: Provides information on financing programs and local incentives for small businesses ADMINISTERS HIRE HOUSTON FIRST: Designates eligible businesses as City Businesses (CB) or Local Businesses (LB)
ONE STOP BUSINESS CENTER Services MWDBE/SBE: Refers Minority, Women, and disadvantaged businesses to certification and HUB programs GOVERNMENT CONTRACTING INFORMATION: Provides information on COH and other government contracting opportunities DCA: Provides trouble shooting and liaison services to business clients WORKSHOPS: Hosts free business workshops co-sponsored by Houston Public Library, UH SBDC and other local agencies SCORE COUNSELING: Hosts SCORE counseling at OSBC
What is a Non-Profit? A nonprofit organization is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends. States defer to the IRS designation conferred under United States Internal Revenue Code Section 501(c), when the IRS deems an organization eligible. Completed Form 1023 required for section 501(c)(3) exemption. Form 1023 is filed by organizations to apply for recognition of exemption from federal income tax under section 501(c)(3). Upon approval, IRS will issue a determination letter that provides written assurance about the organization's tax-exempt status, and its qualification to receive tax-deductible charitable contributions. Every organization qualifying for exemption under section 501(c)(3) will also be classified as either a “public charity” or a “private foundation.” Other organizations that may file Form 1023. Other organizations that apply for tax-exempt status under section 501(c)(3) by filing Form 1023 include section 501(e) and (f) cooperative service organizations, section 501(k) childcare organizations, and section 501(n) charitable risk pools. Source: Wikipedia, www.irs.gov
IRS 501(c) Organizations 501(c)(3) Religious, Educational, Charitable, Scientific, Literary, Testing for Public Safety, to Foster National or International Amateur Sports Competition, or Prevention of Cruelty to Children or Animals Organizations. Other 501(c)’s include: 501(c)(4) — Civic Leagues, Social Welfare Organizations, and Local Associations of Employees 501(c)(5) — Labor, Agricultural, and Horticultural Organizations 501(c)(6) — Business Leagues, Chambers of Commerce, Real Estate Boards, etc. 501(c)(7) — Social and Recreational Clubs 501(c)(8) — Fraternal Beneficiary Societies and Associations 501(c)(9) — Voluntary Employee Beneficiary Associations 501(c)(10) — Domestic Fraternal Societies and Associations 501(c)(11) — Teachers' Retirement Fund Associations (29 categories total)
Registering a Non-Profit Corporation Nonprofit Corporations: Not all non-profit organizations are filed with the Secretary of State. Many, but not all, non-profit organizations choose to incorporate. A nonprofit corporation is created by filing a certificate of formation with the secretary of state in accordance with the Texas Business Organizations Code ("BOC"). "Nonprofit corporation" means a corporation no part of the income of which is distributable to members, directors, or officers [BOC, Section 22.001(5)]. A nonprofit corporation may be created for any lawful purpose, or purposes permitted by the BOC. Not all nonprofit corporations are entitled to exemption from state or federal taxes. SOURCE: Texas Secretary of State, www.sos.state.tx.us/corp/nonprofit_org.shtmlwww.sos.state.tx.us/corp/nonprofit_org.shtml SOURCE: www.statutes.legis.state.tx.us/Docs/BO/htm/BO.22.htm
Technical Assistance, Education, and Training Referrals OSBC refers clients to sources of free and low cost technical and management assistance, educational opportunities, seminars, workshops, and business plan support. Contact these agencies: SCORE (including OSBC onsite counseling) UH SBDC Internal Revenue Service- www.tax.gov/virtualworkshop United Way: www.unitedwayhouston.org Executive Service Corps (non-profits) Houston Community College Houston Technology Center (www.houstontech.org) Houston Lawyer Referral Service (www.hlrs.org) Houston CPA Referral Service (www.houstoncpa.org) The CITY OF HOUSTON assumes no responsibility for referrals to agencies and companies not affiliated with the CITY OF HOUSTON.
Executive Service Corps- Houston www.eschouston.org 713.780.2208 Executive Service Corps of Houston is a nonprofit organization devoted exclusively to advising, equipping and encouraging other nonprofits in ways that strengthen their capacities for service to donors and their communities. Free and low cost services provided by ESCH include: Assessing a Nonprofit Business Guiding Strategic Planning Improving Board Governance Facilitating Leadership Retreats Coaching Executives and Managers Strengthening Fundraising Achieving Financial Fitness Publishes “How to Start a Nonprofit” pdf download Sponsors seminars to help nonprofits gain knowledge into business management and operations
Loan Information and Referrals Note: OSBC PROVIDES NO BUSINESS FINANCING OSBC provides information on loan programs and business incentives, including the SBA, Houston Business Development, and others. One Stop DOES NOT provide direct private lender referrals- please contact a private lender or the SBA for referrals. The Houston SBA office maintains a list of Preferred Certified Lenders and Microloan companies. Call them at 713.773.6500 for private lender referrals. www.sba.gov/about-sba-services/2834
United Way Grant Funding Community Building Grants - one-time, short-term funding from $500 to $5,000 awarded to nonprofit civic and neighborhood groups for projects that benefit the community. For more information or to apply, please download the 2012 Community Building Grants Brochure. Community Building Grant Conference Presentation 2012 Community Building Grant Application 2011 Community Building Grant funded projects Community Building Grants - Reporting Form For questions or to have your organization added to our database for updates on funding opportunities, please email the name of your nonprofit organization, complete mailing address, phone number and name and title of the primary contact person by calling 713-685-2738. Nonprofit Resource Library The United Way Resource Library can help you expand your grant options. Take advantage of the most comprehensive funder databases available.United Way Resource Library SOURCE: www.unitedwayhouston.org/Nonprofit+Connection/Grant+Opportunities
Grants Grant resources for non-profits and small businesses: www.grants.gov Catalog of Federal Domestic Assistance (www.cfda.gov) The Foundation Center (foundationcenter.org) The Grantsmanship Center (www.tgci.com) www.business.gov www.houstonlibrary.org City of Houston Housing and Community Development Dept. (CDBG Grants) ( www.houstontx.gov/housing/index.html) UH Graduate College of Social Work (www.uh.edu) NOTE: Grants are NOT normally available for start up companies. Before you pay someone promising grant money, contact the Texas Attorney General and check on their complaint record (713.223.5886). Also contact the Houston Better Business Bureau @ 713.868.9500. BEWARE OF PROMISES!!
Business Plan Basics Creates an organized view of your business ideas Helps identify your business’ strengths and weaknesses, as well as your experience Provides direction and contingencies Provides an analysis of the target market Describes your product, service, and pricing structure A review of the management team and practices Identifies capital requirements at start up and in the future SOURCE: web.sba.gov/busplantemplate/BizPlanStart.cfm Why do people create a business plan?
Getting Started Packet Contents Minimum Requirements City, County Requirements Local And State Regulations Federal Regulations Employer Responsibilities Workplace Posters / Contract Labor Supporting Information
Minimum Requirements (Common Filings) DBA- HARRIS / FT. BEND COUNTY CLERK STATE SALES TAX PERMIT- TEXAS STATE COMPTROLLER * EIN-FEDERAL TAXPAYER ID- INTERNAL REVENUE SERVICE * PROPERTY RENDITION- HARRIS / FT. BEND COUNTY APPRAISAL DISTRICT (After Jan. 1 of each year) CORPORATIONS, LLC’s etc.- TEXAS SECRETARY OF STATE * EMPLOYER-RELATED FILINGS SEPARATE (See GSP) *
RECAP: DBAs and General Business Licenses in Houston 1. There is NO “general business license” issued by the COH, Harris Co. or the State of Texas. 2. DBAs, State Sales Tax Permits, or EINs are NOT business licenses. They are business- specific and based on range and scope of activities. DBAs do not prove an operational business. 3. DBAs are NOT unique name registrations. Someone else can use the name for their business in the same county. DBA’s are a public declaration of your intent to use that business name. 4. DBAs are filed in Texas counties in which you have a business presence. DBA’s are required for non-profit entities. HARRIS COUNTY CLERK: 713-755-6436 DBA DATABASE: www.cclerk.hctx.net/applications/websearch/AN.aspx
RECAP: Federal Taxpayer ID Number (Employer ID Number: SS-4) What is a federal tax ID number? A federal tax identification number (also know as an employer identification number or EIN), is a number assigned solely to your business by the IRS. Your tax ID number is used to identify your business to several federal agencies responsible for the regulation of business. Does my business need a federal tax ID number? Any business offering products or services that are taxed in any way must get a federal tax ID number. If your state taxes personal services, or if you are required to collect sales taxes on your sales, you need a federal tax ID number. All the government forms you will be required to file for your business will require either a Social Security number or a tax ID number.
Legal Business Structures in Texas - 1 SOLE PROPRIETORSHIP: Most common and the simplest form of business. In a sole proprietorship, a single individual engages in a business activity without necessity of formal organization. No SOS filing. GENERAL PARTNERSHIP: Created when two or more persons associate to carry on a business for profit. A partnership generally operates in accordance with a formalized agreement, but there is no requirement that the agreement be in writing and no state-filing requirement. No SOS filing. SOURCE: www.sos.state.tx.us/corp/businessstructure.shtml
Legal Business Structures in Texas - 2 CORPORATION: Have characteristics of limited liability, centralization of management, perpetual duration, and ease of transferability of ownership interests. The owners of a corporation are called “shareholders.” The persons who manage the business and affairs of a corporation are called “directors.” LIMITED LIABILITY COMPANY: LLC is not a partnership or a corporation but rather is a distinct type of entity that has the powers of both a corporation and a partnership. Also: Limited Partnership: Limited Liability Partnership, Nonprofit Corporation. You need NOT have an attorney file documents for you. SOURCE: www.sos.state.tx.us/corp/businessstructure.shtml
Occupancy Inspection Basics (COH) If a commercial building or lease space is occupied, or if changes to an occupancy type are made. If no Certificate of Occupancy (CO) is posted the owner or agent is given a 10-day notice to apply and pay fees. If the business fails to comply, citations may be issued each day until the application is received by the City. Residential dwellings and garages, sheds, and carports are exempt from needing CO’s (unless converted to commercial) Minimum $412 fee (one story minimum fee), effective January 1, 2012 www.houstonpermittingcenter.org/code-enforcement/permit-fee-schedule.html
Contract Labor in Texas (Texas Workforce Commission) "Contract labor" may be the most widely used misnomer in business today. The issue is whether a given worker is an employee or an independent contractor. An EMPLOYEE is someone over whose work an employer exercises direction or control and for whom there is extensive wage reporting and tax responsibility. An INDEPENDENT CONTRACTOR is self-employed, bears responsibility for his or her own taxes and expenses, and is not subject to an employer's direction and control. SOURCE: www.twc.state.tx.us/news/efte/ics_contract_labor.html Or Call the Texas Workforce Commission at: 281.933.3858
FAQ - Are Permits, Licenses and Regulations the Same Thing? Business licenses and permits can vary by type of business, range of activities, and enforcing jurisdiction. A business may not be issued a license or a permit (for a fee) but still be regulated. NO!! EXAMPLE Mail Order businesses do not receive an actual permit or license but are regulated by the US Federal Trade Commission through their “Mail and Telephone Order Merchandise Rule” SOURCE: www.ftc.gov
Texas Deceptive Trade Practices Act - DTPA This is the basic Texas consumer protection statute. It prohibits a list of deceptive trade practices and gives consumers the right to sue for damages. It requires that consumers who win DTPA lawsuits be awarded their attorney’s fees and in some cases provides for damages of up to three times a consumer’s actual damages.
Texas Deceptive Trade Practices Act – DTPA (continued) * Passing off goods or services as those of another * False representation * False disparagement of goods or services of another business * False advertising (in certain circumstances) * Fraud by repair persons (i.e. mechanic’s shops) * Misrepresentation * Motor vehicle fraud * False warranties * Failure to disclose certain information in sales of goods and services * False representation of business entity status * Price gouging after a disaster SOURCE: mytexasconsumerlawblog.com/2009/12/11/texas-deceptive-trade-practice-act-dtpa/ Also: library.findlaw.com/2000/Mar/1/130722.html
Guidelines for Purchasing or Leasing Business Property Verify the existence of deed restrictions Check existing property tax records through www.hcad.orgwww.hcad.org (or similar) Verify if property has zoning or land use requirements or restrictions (title papers, county clerk) Research distance operating requirements (planning offices) Analyze the availability and cost of utilities (water, sewer, electric, gas) Determine who is responsible for leasehold improvements and obtaining building permits and COs
Home-Based vs. Lease Space? HOME-BASED Check deed restrictions Low capital start-up Some tax deductions Part-time operation possible Flexible hours Family-friendly LEASE SPACE Easily identifiable location Customer traffic allowed Signage Inventory space Fewer distractions Higher capital start-up
Deed Restrictions- I THE CITY OF HOUSTON IS UNZONED! Houston enforces deed restrictions for the protection of citizens and property owners in residential neighborhoods. All residents and citizens benefit, and it promotes the health, safety, and general welfare of the city. PLEASE CONTACT THE DEED RESTRICTION HOTLINE AT 832.393.6333
Deed Restrictions- II BEFORE OPERATING FROM A HOME: 1.ARE YOU ACTIVELY OPERATING A BUSINESS? 2.ARE YOU GENERATING CUSTOMER TRAFFIC? 3.ARE THERE CURRENT DEED RESTRICTIONS AND WILL THEY ALLOW OR DISALLOW THE OPERATION OF A BUSINESS? ARE THERE DISTANCE REQUIREMENTS? 4.IS YOUR SPECIFIC TYPE OF BUSINESS ALLOWED OR DISALLOWED? 5.ARE THE DEED RESTRICTIONS VOID THROUGH NON-ENFORCEMENT OR EXPIRATION?
Obtaining Deed Restrictions 1.Included with legal papers when real property was purchased. 2.Part of a lease or rental agreement, by reference or inclusion. 3.Obtain from area homeowners association or civic club. 4.Obtain from the applicable County Clerk office (must have property legal description). In Harris Co. call 713.755.6899 (Real Property Records).
For More Information Call ONE STOP BUSINESS CENTER 832.393.0954 (or 311) To download a copy of this presentation www.houstontx.gov/onestop (Updated 9-2012)