Benefits of a Corporation
Many people form corporations to take advantage of their limited liability, which means that the corporation’s owners—the shareholders—are not personally responsible for the corporation’s debts and other financial obligations. Corporations and other business entities are not responsible for liability if you are negligent or do something illegal.
Requirements for Incorporating in Colorado
Articles of Incorporation
Your corporation’s existence will begins when you file its articles of incorporation with the Colorado Secretary of State, unless the articles specify a later date. To form a corporation, you need only file articles of incorporation and pay a fee. The articles must contain the following provisions:
- Name of the corporation
- Registered agent name and address
- Names and addresses of incorporators
- Address of the corporation’s initial principal office
- Stock structure, including the classes of shares and the total number of shares each class is authorized to issue.
- If there is more than one class of shares, the articles must provide a distinguishing designation for each class and must state the relative rights, limitations and preferences of that class.
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Naming Your Corporation
You should check the Secretary of State’s website to see if your corporate name is available before filing articles of incorporation.
You can reserve a name for 120 days by filing a Statement of Reservation of Name with the Secretary of State. Extensions of 120 days each are available.
Your corporation name must meet the following requirements:
- It must contain the words “corporation,” “incorporated,” “company” or “limited,” or the abbreviations “corp.,” “inc.,” “co.” or “ltd.”
- It must be distinguishable from any other entity name on file or that has been reserved with the Secretary of State.
An incorporator is responsible for filing the articles of incorporation with the Secretary of State. If initial directors are not named in the articles of incorporation, the incorporators may hold an organizational meeting to elect directors and adopt bylaws. After that, the incorporators do not have any additional responsibilities.
The following are requirements for specifying incorporators for your Colorado corporation:
Incorporators’ names and addresses must be listed in the articles of incorporation.
Your corporation must have at least one incorporator.
An incorporator must be an individual who is at least 18 years old.
Corporate directors guide the corporation’s policies and strategies and oversee the corporation’s business and affairs. Directors have a duty to be diligent and use good business judgment. The following are requirements for specifying directors for your Colorado corporation:
- There must be at least one director.
- There is no maximum number of directors. The number of directors should be stated in the bylaws.
- A director must be an individual who is at least 18 years old. The bylaws may contain additional eligibility requirements for directors.
Specifying a Registered Agent
A registered agent is a person or entity that receives official correspondence on behalf of the corporation. A registered agent may be an individual who is at least 18 years old and has a primary residence or business address in Colorado, or the agent may be a business formed or authorized to do business in Colorado that has a usual place of business in Colorado. A corporation can be its own registered agent.
Stating a Corporate Purpose
Unlike many states, Colorado does not require you to state a corporate purpose in the articles of incorporation.
Determining Incorporation Bylaws
Bylaws provide important guidelines for the way a corporation will be structured, the responsibilities of officers and directors and the way decisions will be made. Although bylaws are not required, the incorporators, directors or shareholders may choose to adopt bylaws.
Bylaws can contain any provision for managing the business and regulating the affairs of the corporation. Usually, bylaws include such things as the number of directors and how they are chosen, the manner in which votes are taken and the way that shareholders’ and directors’ meetings are conducted.
Bylaws must not contain anything that conflicts with the law or the articles of incorporation.
Costs of Incorporating in Colorado
The Colorado Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. Corporations are also required to pay state and federal income taxes.
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