Forming a Colorado S Corporation

A Colorado C corporation will be filed pursuant to §7-90-301 and §7-102-102 of the Colorado Revised Statutes, or CRS. Incorporated entities in Colorado, including C corporations, are registered with the Secretary of State’s office’s Business Division.

Articles of Incorporation for Your Colorado S Corporation

Your Colorado Articles of Incorporation are the formation documents that you must submit to the state in order to create an S corporation. The same Articles of Incorporation should be filed for a Colorado S corporation as for a C corporation—the distinction is at the Federal level, not the state level.

These Articles of Incorporation should contain the following information:

  • Name: Your S corporation’s name must be available for use in that state, and it must contain a corporate ending (or abbreviation of the ending) appropriate for the entity type: Incorporated, Corporation, Inc., Corp., and so on. Certain finance-related restricted words or terms may require separate approval from various state boards.
  • Principal office address(es): You must give the main address at which your C corporation is to be located; you may also list a separate mailing address, which may or may not be a physical address.
  • Registered agent: The contact person (or entity) for your business is required to have a physical address in Colorado. He or she (or it) may provide a separate mailing address, if necessary.
  • Period of duration: Any corporation in Colorado, by default, exists perpetually. If your corporation is to have a specific end date, that date should be provided.
  • Incorporator: The filer will insert his or her name and address.
  • The amount of share of stock to be authorized should be listed.

Once filed, the Articles of Incorporation create a new legal “person,” and the owners, assuming they follow all of the corporate formalities, enjoy protection from personal liability for the company’s debts and contracts.

Further Responsibilities of a Colorado S Corporation

Colorado requires that a Periodic Report be filed for every reporting entity (which includes S corporations). This periodic report must be filed within the three-month window beginning on the anniversary date of your original filing.

Once your corporation has been recorded, you must file your S Corp Election Form (form 2553) with the IRS within 75 days. This form will give you S Corporation status and allow you to be taxed accordingly. You will also need to obtain an EIN from the IRS. This will be your tax ID number.

You are required to file an Article amendment if any information originally provided in your Articles of Incorporation changes.

More Information About a Colorado S Corporation

Your S corporation:

  • Can have up to 100 owners/shareholders, but no more
  • May deduct the cost of benefits provided to employers (such as parking permits, health insurance, and so on)
  • Has a board of directors, which oversees the policies of the corporation
  • Cannot have more than one class of shares
  • Issues limited liability for owners
  • Must be owned by US citizens or resident aliens
  • Is taxed as owners’ income, not as a separate entity
  • Allows business losses to be deducted on the owners’ individual tax returns
  • Must pay payroll tax

For S corporations, only the salary paid to the owner-employee is subject to employment tax. The remaining income that is paid as a distribution is not subject to employment tax under IRS rules. Therefore, an owner of an S corporation stands to realize substantial employment tax savings. However, the salary you give yourself must not be artificially low; if the IRS finds your salary unreasonable, they may reclassify some of the distribution funds as salary and require you to pay taxes on it.

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Other Types of Businesses in Colorado

For information on other types of businesses in Colorado, please explore the links below.