Starting a corporation in Colorado gives entrepreneurs the advantage of separating the company’s finances from the personal assets of its shareholders. Unlike other business entities such as partnerships and sole proprietorships, a corporation generally limits shareholder liability for the actions and debts of the company. Forming a corporation in Colorado is a somewhat complex process involving certain steps that generally apply to all corporations.
Select a name for your Colorado corporation. The name must include one of the following designations: “Corporation,” “Incorporated,” “Company,” “Limited” or the abbreviation “Corp.,” “Inc.,” “Co.” or “Ltd.” In addition, your company name cannot be confusingly similar to that of an existing business in Colorado, and it cannot indicate affiliation with a banking or government entity.
Check the company name database on the Colorado Secretary of State website (link in Resources). The database will let you know whether your company name is available for registration.
Complete the Statement of Reservation of Name form, available on the Colorado Secretary of State website. Submit the form to the Secretary of State or complete the online form. This step is not required if you are ready to file your company's formation documents; but if you are not yet ready to incorporate, use this form to reserve your company name for 120 days. The fee for reserving a name is $25 as of 2012.
Designate a registered agent for your Colorado corporation. This agent must be a person or business entity with a physical address in the state of Colorado. A registered agent accepts legal service of process on behalf of the corporation.
Complete the Articles of Incorporation form, which is available on the Colorado Secretary of State website (link in Resources). This form lists the corporation's physical address and mailing address, the incorporators' names and addresses, and the number and class of shares the corporation may issue. It must also list the name and address of the registered agent.
Submit your completed Articles of Incorporation form to the Colorado Secretary of State. You can mail the form or submit it online. As of 2012, the filing fee is $50.
Obtain an Employer Identification Number (EIN) from the Internal Revenue Service. This number is used for identification and tax purposes, and you’ll need it to register your business with the Colorado Dept. of Revenue. You can obtain an EIN immediately by calling the IRS or by completing the online form on the IRS website (see Resources). You may also mail your application, although you may not receive your EIN for up to four weeks. The IRS does not charge a fee for issuing an EIN.
Register your new corporation with the Colorado Dept. of Revenue. You can register online through the Business Express Portal on the Colorado State website.
- Hiring an attorney or document preparation and filing service such as LegalZoom may be prudent to avoid costly mistakes during the incorporation process.
- Draft bylaws to reflect the governing procedures for your corporation and how you will run the business. You do not have to file bylaws with the Colorado Secretary of State.
- Check with your local Small Business Development Center location to determine if you need additional permits or licenses to conduct business in Colorado. You can find a list of locations on the Colorado Small Business Development Center website using the link provided in the Resources section of this article. License and permit requirements vary according to the types of business you intend to transact and the types of tangible goods your corporation will sell.