Form a Colorado Corporation
Form your Colorado (CO) corporation online now. Colorado incorporation has never been easier. Incorporate in Colorado with the Colorado incorporation experts. We will assist you with forming your Colorado corporation, the right way. To get started, simply click on “Order Now.” Please feel free to call us, anytime, with any questions.
Incorporating in Colorado
Incorporating in Colorado can be vital to businesses based of Colorado. At LawInc, we prepare your Colorado corporation Articles of Incorporation, bylaws, stock certificates, stock ledger and more. We can even obtain your Colorado corporation Tax ID number and file your Colorado S corporation election with the IRS.
Colorado Incorporation Information
The following Colorado incorporation information will likely be helpful when deciding to incorporate in Colorado.
Colorado Corporation Name
The first step in forming a Colorado corporation is selecting the business name. Colorado corporation names:
- Must contain “Corporation,” “Incorporated,” “Company,” “Limited,” “Corp.,” “Inc.,” “Co.” or “Ltd.”
An available Colorado corporation name may be reserved for a 120 day period.
LawInc.com permits you to choose up to three names and will conduct a name search for your Colorado corporation, prior to filing.
Colorado Corporation Formation
Colorado Corporation Filing Procedure: To incorporate in Colorado, you must file Colorado Articles of Incorporation with the Colorado Secretary of State.
The Colorado Articles of incorporation should include:
- Corporation name.
- Number and classes of shares to be issued.
- Registered agent address.
- Name and address of the incorporator.
Colorado Corporation Filing Fee: The Colorado corporation filing fee is $125.
Colorado Corporation Authorized Shares: There is no minimum or maximum number of authorized shares since state incorporation fees are not based on the share structure.
Colorado Incorporator: Minimum number of incorporators is one (1) (individual or an entity) and there is no requirement that the incorporator be a resident of Colorado.
Colorado Corporate Directors: The minimum number of directors is 1. A Colorado corporation director must be a natural person at least 18 years old. Directors need not be listed in the articles.
1244 Stock: Election to have stock classified as IRC Section 1244 stock allows for a substantially larger application of the deduction from business losses to ordinary income than regular stock. With regular stock, you can only offset $3,000 against ordinary income. With the issuance of Section 1244 Stock, the corporation can claim an ordinary loss deduction of as much $100,000.
Colorado Registered Agent: A Colorado corporation must maintain a registered agent and office to receive service of process in Colorado. The Colorado registered agent should be available, at a Colorado physical address, during normal business hours to accept important legal and tax documents on behalf of the Colorado corporation. The registered agent can either be (1) an individual with a physical Colorado address or (2) a corporation authorized to serve as registered agent.
Colorado Corporation Limitation of Directors’ Liability: It is acceptable to state either alone or with a specific purpose clause, “The purposes for which the corporation is organized shall be to transact any and all lawful business for which corporations may be incorporated pursuant to the provisions of the Colorado Business Corporation Act.”
Colorado Professional Corporation: Colorado Professional corporations are corporations organized for the purpose of providing professional services. Typically, professional corporations must be organized for the sole purpose of rendering professional services of the licensed practitioners.
Colorado Corporation Post-Filing Requirements
Colorado Corporation Annual Report: Colorado corporations are required to file annual reports which are due on the anniversary month of formation. The reports may be filed 3 months prior to or after the anniversary month, before a late fee is assessed. For more information, visit: http://www.sos.state.co.us/pubs/business/FAQs/reports.html.
Colorado Corporate Minutes: Colorado corporations are required to hold and document annual shareholder and director meetings.
Colorado Corporation Taxes
Colorado Corporation Taxes: For information on the Colorado state income tax rate, visit: http://www.revenue.state.co.us/main/home.asp
Colorado C Corporation: All Colorado corporations formed by default are “C” corporations. A Colorado C corporation is a Colorado corporation that has not made an election to be an “S” corporation. The term C corporation is specifically used because the entity is taxed under subsection C of the IRS code. Colorado C corporations are taxed at two levels (“double taxation”). This means that the corporation itself pays its own tax when it makes money (the first tax). The owners or shareholders are then taxed again when they are paid a salary or dividend by the corporation (the second tax). Despite double taxation, Colorado C corporations offer many planning and benefit opportunities.
Colorado S Corporation: A Colorado S corporation is a corporation that has made an election with the IRS to be treated for tax purposes as a “pass-through entity.” This means that corporate profits and losses are passed through to the shareholders (owners) who report them on their own personal tax returns and pay the tax at the individual level. The corporation pays no federal income tax at the corporate level. Colorado S corporations are not subject to the double taxation C corporations encounter. The State of Colorado recognizes S corporation status. Colorado does not require a state election. However, Colorado S corporations are still subject to a separate 1.5% S corporation fee, which is based on the corporation’s net income.
These are the 3 main advantages of forming an S corporation:
- No double taxation: One of the main advantages of S corporation status is that it avoids the double taxation that occurs with a regular C corporation. In a C corporation, the corporation pays income tax on its profits and, if those profits are distributed to shareholders, the shareholders pay income tax on the distribution.
- Loss deductions: The availability of losses. Shareholders of an S corporation generally may deduct their share of the corporation’s net operating loss on their individual tax returns in the year the loss occurs. Losses of a C corporation, however, may offset only the corporation’s earnings.
- Self-employment tax savings: By electing S corporation status, only the earnings actually paid out to you as salary are subject to payroll taxes; money left in the business is not subject to payroll taxes or self-employment tax. All income passes through, but its tax status depends on whether it is classified as salary or ordinary income.
Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. All Colorado corporations should obtain an EIN.
Colorado Corporation Dissolution
Colorado Corporation State Dissolution requirements: A Colorado corporation can be voluntarily dissolved by filing Articles of Dissolution online. For more information, visit: http://www.sos.state.co.us/biz/FileDocSearchCriteria.do
Colorado Corporation Federal/IRS Dissolution requirements: Corporations are required to file IRS Form 966, Corporate Dissolution or Liquidation. A final tax return should be filed with the IRS. Form 966 should be filed along with the final tax return. Final state tax returns may also need to be filed. Follow up with an accountant regarding all tax related requirements.