How to Set Up an S Corp in Colorado: A Step-by-Step Guide

Selecting the appropriate business structure is essential if you’re thinking about starting a business in Colorado. The S Corporation, which provides a number of advantages including limited liability, pass-through taxation, and possible tax savings, is one of the most widely used business structures in Colorado. We will walk you through the process of forming a S Corp in Colorado in this article.

The first step is to select a business name. The selection of an original company name that complies with the state’s naming regulations is the first step in forming a S Corp in Colorado. Your company name shouldn’t be the same as or confusingly similar to any already-used company name in Colorado. On the website of the Colorado Secretary of State, you can determine whether your preferred name is available.

Second step: submit articles of incorporation Articles of Incorporation must be filed with the Colorado Secretary of State’s office in order to establish a S Corp in Colorado. Your company’s name, registered agent details, business purpose, the number of shares of stock to be issued, and the initial directors’ names and addresses should all be listed in the articles of incorporation. The Articles of Incorporation and associated fees may be submitted online or by mail.

Employer Identification Numbers, or EINs, are special nine-digit numbers given out by the IRS to identify your company for tax-related purposes. To open a business bank account, file taxes, and recruit staff, you must an EIN. Free of charge, you can apply for an EIN online or by mail.

Drafting corporate bylaws is step four. Your S Corp’s operating procedures will be governed by its corporate bylaws. The bylaws ought to have clauses addressing shareholder meetings, director elections, stock issuance and transfers, and other significant issues. To create your corporation bylaws, you should get legal counsel.

You must call a meeting of the inaugural shareholders and directors after submitting the articles of incorporation and creating the corporate bylaws. You will legalize your S Corp during the meeting by adopting the bylaws, choosing officers, issuing stock certificates, and taking other essential steps.

The $50 filing fee for the Articles of Incorporation and the cost of establishing the company bylaws, which varies based on the attorney’s fees, are included in the cost of forming a S Corp in Colorado. Other services that you might need to pay for include getting an EIN and engaging an attorney to help with the procedure.

Is an LLC Required to Form a S Corporation? No, you can be a S Corp without having an LLC. A corporation that has chosen to be taxed under Subchapter S of the Internal Revenue Code is known as a S Corp. To benefit from the advantages of both formations, many small business owners opt to set up an LLC and then select S Corp taxes. Reasonable Salary for S Corporation

You must pay yourself a fair wage as a S Corp owner in exchange for the services you render to the company. The wage must be comparable to what would be paid for performing identical job in the same business, according to the IRS. The S Corp then distributes the remaining profits to the shareholders in the form of dividends, which are taxed at a lower rate than regular income. Can a S Corporation register as an LLC?

Unable to register as an LLC is a S Corp. An S Corp is a particular kind of corporation that has chosen to be taxed under Internal Revenue Code Subchapter S. A alternative kind of business structure called an LLC provides similar benefits including restricted liability and pass-through taxation. However, unless it is first established as a corporation, an LLC cannot choose S Corp taxation.