By Jonathan Feniak, Esq., MBA
In order to form a Colorado corporation, there are many steps you most consider including drafting corporate bylaws and electing S-corporation tax status. Perhaps the most important, though, is filing the articles of incorporation with the Colorado Secretary of State. Articles of incorporation are the legal documents that officially create your corporation as a separate entity and confirm its existence with the state. Filing these articles is an important first step for your business, as their approval is required before applying for a tax ID, or employer identification number, as well as any permits or licenses.
The necessary forms can be found and filed online at the Secretary of State website. When filling out your articles, you will be required to include the following information: your corporation's name, the principal place of business for your corporation, your registered agent's information, your incorporator's information, and the class and number of any shares your corporation has been authorized to issue.
Before filing your articles, you should choose a name for your corporation that is unique from any other Colorado businesses. In order to determine this, conduct a name search in the database provided by the Colorado Secretary of State. All registered businesses in the state will have their names available in this database. Additionally, if your corporation is for-profit, it must include an appropriate identifier, such as “corporation”, “incorporated”, “limited”, “company”, or an abbreviated version of these.
Every corporation must maintain a registered agent. The duties of a registered agent include accepting official documents on the corporation's behalf and ensuring their prompt delivery. Your registered agent can a person or another registered corporation. The registered agent must also maintain a Colorado address that is up-to-date with the Secretary of State at all times.
Your corporation determines ownership through issuing shares of stock. There are two types of stock that you can authorize: common stock and preferred stock. In most cases, corporations only issue common stock, which provides basic ownership and voting rights. However, in some cases, preferred stock may be issued in order to achieve special guarantees, dividends, or voting rights, among other options. Additionally, your corporation must determine a stock par value. Par value is the minimum price at which a share can be issued.
In addition to your corporation's name, you must also list the address of its principal place of business. If you are using a formation service for your corporation, however, you have the option of listing an address specified by your attorney. This is usually the address of their own office or a similarly designated place. Clients interested in keeping their personal information private often prefer this method.
Additionally, you must list the name and information of your corporation's incorporator. This is the individual who files and signs your articles of incorporation. It is not necessary that this individual be part of the corporation beyond the initial filing stages. Also, you have the option of choosing an attorney to complete this step. In which case, their information and signature would be used.
Enlisting the help of an attorney or filing service can guarantee accurate compliance with Colorado corporation regulations. Additionally, an attorney can serve as your corporation's Incorporator and therefore list their own name and address. This option provides you the most privacy, as the articles are a public document. In some cases, an attorney may also serve as your corporation's registered agent. Incorporation can be a confusing process, so we recommend doing some reading on Colorado corporate taxes and the difference between Colorado LLCs vs. Colorado S-corps to make sure you fully understand your options so you can choose a path that’s right for you business.Order Now