To form a corporation in Colorado, you need to take the steps set forth below. You can also use Nolo's Online Corporation service, which will form a corporation for you with everything you need.
Under Colorado law, your corporation's name must contain the words "incorporated," "corporation," "limited," or "company," or an abbreviation of these words. The name may not indicate or imply that the corporation is organized for a purpose other than one permitted by state law or its articles of incorporation.
Your corporation's name must be distinguishable from the names of other business entities already on file with the Colorado Secretary of State. Names may be checked for availability by searching the Colorado Secretary of State business name database. An available name may be reserved for 120 days by filing a Statement of Reservation of Name with the Colorado Secretary of State. The form must be filed online at the Secretary of State website.
Your corporation is legally created by filing Articles of Incorporation for a Profit Corporation with the Colorado Secretary of State. The articles must include the corporation's name and street address; the name and street address of the agent for service of process; affirmation of consent of the registered agent; the name and address of each incorporator; and the number of shares the corporation is authorized to issue. The articles must be filed online.
Every Colorado corporation must have an agent for service of process in the state. This is an individual or corporation that agrees to accept legal papers on the corporation's behalf if it is sued. A corporation may not service as its own agent for service of process. The agent should agree to accept service of process on your corporation's behalf prior to designation.
The registered agent may be an individual who is a full-time resident of Colorado, a Colorado business entity with its principal place of business in Colorado, or a foreign entity authorized to do business in Colorado and which has a usual place of business in the state. The agent must have a physical street address in Colorado, not a post office box. Small corporations typically name a director or officer to serve as the initial agent. A different agent can always be named later. The agent must consent to the appointment.
Bylaws are an internal corporate document that set out the basic ground rules for operating your corporation. They are not filed with the state. Your corporation is not legally required to have corporate bylaws, but you should adopt them because they establish your corporation's operating rules, and help show banks, creditors, the IRS, and others that your corporation is legitimate. For corporate bylaw forms, see Nolo's website or Incorporate Your Business, by Anthony Mancuso (Nolo).
Keep your bylaws, meeting minutes, and other important corporate papers in a corporate records book. This can be a simple three ring binder or corporate records kit you order through a corporate kit supplier. Keep it at your corporation's principal office.
The incorporator—the person who signed the articles—must appoint the initial corporate directors who will serve on the board until the first annual meeting of shareholders (when the board members who will serve for the next term are elected by the shareholders).
The first meeting of the corporation's board of directors should be held to appoint corporate officers, adopt bylaws, select a corporate bank, authorize issuance of shares of stock, set the corporation's fiscal year, and adopt an official stock certificate form and corporate seal. The directors' actions must be recorded in corporate minutes prepared by the incorporator or any of the directors. If the corporation will be an S corporation, the directors should approve the election of S corporation status.
Issue stock to each shareholder in return for their capital contributions of cash, property, services, or all three. Small corporations usually issue paper stock certificates. Enter each shareholder's name and contact information in the corporation's stock transfer ledger.
The default rule in Colorado is that corporate stock has no par value. Thus, the articles need not state whether the shares have a par value. However, Colorado corporations have the option of establishing a par value for their shares. If desired, the par value can be listed in the articles, but this is not required. See Nolo's article "What is Par Value Stock."
A share of stock in your corporation is classified as a security under state and federal securities laws that regulate the offer and sale of corporate stock. However, federal law exempts "private offerings:" a non-advertised sale to a limited number of people (generally 35 or fewer). See Nolo's Corporations FAQ for more details.
Colorado exempts all nonpublic offerings from registration. These include unadvertised offerings to any number of sophisticated investors. Also exempt are private sales to up to ten Colorado residents during any 12-month period where the shares are purchased for investment. Neither of these exemptions requires any state filings or fees. For more information, see the Registration & Exemptions Filings page at the Colorado Division of Securities.
Colorado corporations and foreign corporations authorized to do business in the state must file a Periodic Report with the Colorado Secretary of State each year. The report is due during the three-month period beginning with the first day of the corporation's anniversary month of formation or qualification to do business in Colorado. If you sign up for the Business Division's email notification service, an email notice that a Periodic Report is due will be sent at the beginning of the three-month period for filing the Periodic Report on time.
The report must be filed online at the Secretary of State's website.