When forming a Non-Profit in Colorado, the first thing to do is to name your business.
The state requires that your Non-Profit’s name is not the same as another existing Non-Profit registered in the the Secretary of State’s Records. Check name availability using Colorado’s name search database.
After you have named your Non-Profit, the next step is to elect your Colorado Non-Profit officers and directors. These Non-Profit officers and directors will help you decide on crucial matters of your organization as well as its daily operations.
When starting a Colorado Non-Profit, the state requires that you elect at least one or more directors for the organization.
A Colorado Registered Agent is necessary to operate a Non-Profit organization in your state. A Registered Agent is an individual/entity that is in-charge of accepting all legal documents from the state on behalf of your organization.
State requirements mandate that you cannot be your own Agent. The Registered Agent that you hire should be a Colorado resident and must be available at his or her street address during office hours.
You can hire a Registered Agent service and pay up to $160/year, or get a Colorado Registered Agent free of charge when you incorporate your Non-Profit with IncFile.
To legalize your organization, you need to file an Article of Incorporation for Non-Profit organizations to the Colorado Secretary of State. The link provided contains a sample form from which you can base your article and view the required information.
An Article of Incorporation does not automatically grant you eligibility for the 501(c)(3) tax-exempt status with the IRS, so make sure to include specific languages in your application. These languages include:
The first meeting with your board of initial directors and officers is a turning point in your Non-Profit organization. Make sure you make decisions regarding the following matters:
Minutes of the meeting should be reviewed and signed by all directors at the end of the meeting.
Keeping a Corporate Records Binder is important when managing your non-profit organization. While it is not a state requirement, a Corporate Binder helps keep all of the Non-Profit’s important documents in one place. You may include information such as: your Colorado Non-Profit registration paperwork, minutes from your meetings, forms for taxes, permits, and licenses.
A Corporate Records Binder can be purchased on Amazon or at an office supply store.
A Colorado Non-Profit EIN is critical for your organization. The EIN is a series of numbers issued by the Internal Revenue Service as a way to monitor your tax and employment obligations. Think of it like a Social Security Number for your organization.
You cannot operate legally if you do not have an EIN, as most business transactions require one. You can obtain an EIN for free through the IRS website.
As you manage your Non-Profit, it is very important to keep your personal and organization finances separate. Therefore, it is in your best interest to open a business bank account.
Recommended Resource: Look into this roundup of the best business banking accounts to decide which is right for you.
To facilitate for your Colorado Non-Profit tax registration exemptions in both the federal and state level, complete the following steps:
To enjoy a tax-exempt status, submit Form 1023, Application for the Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. Read the instructions before completing the form, as it is lengthy.
If you are a small Non-Profit organization, you may qualify for Form 1023-EZ, Streamlined Application for the Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.
You may qualify if you have a projected income of less than $50,000 with a total assets that do not exceed $250,000. All instructions for forms 1023 and 1023-EZ are provided in the actual form for your reference.
Next, register to obtain a state tax-exempt status. You may qualify for several tax exemptions based on sales, property, etc. You can apply for these tax exemptions through the tax agency for Colorado.
Depending on the size of your Non-Profit and its corresponding activities, you may or may not be required to comply with fundraising registration obligations. Make sure you follow through on this potential requirement.
In addition to taxes, you must also obtain your business licenses. Colorado business licenses and regulations are a requirement for your organization to operate legally.
Recommended Resource: If you would like for professionals to find all business licenses and regulations on your behalf, here is a great package. Otherwise, look into this resource roundup offered by the SBA.
Congratulations! You have followed the steps above and are an official Non-Profit organization in the state of Colorado! Here are 2 additional steps based on best practice when starting a successful organization. They are not required, but are highly recommended based on experience.
Write a business plan today and increase your chances of a thriving organization tomorrow. A business plan is like a blueprint when building a house – without a plan, the house will not be solid.
A business plan allows you to foresee possible business issues, map out your growth, etc. If you need help writing a solid plan for your organization, check out the resources provided below.
To tell the story of your organization and show credibility, you should have a professional website. With WordPress, you’re able to build and customize your website literally in minutes. Bluehost is a web hosting service that is very reliable, has a 1-click automatic WordPress installation, and has a delightfully helpful customer support.
Resource for Getting Started: See how to start a website for your organization through this step-by-step guide.
This guide on starting a Non-Profit organization in Colorado is an informational guide. However, it should not be treated as a legal advice. For further details on starting a Non-Profit and any specific questions you may have, speak with a local professional.