Starting a nonprofit in Colorado

Starting a nonprofit in Colorado is governed by the “Colorado Revised Nonprofit Corporation Act” (Articles 121 – 137) (hereinafter called the ‘Act’)

Eligibility for starting a nonprofit organization in Colorado

a) The Proposed nonprofit organization must be represented by one or more incorporator who must be 18 years or older.

b) The resident agent of the organization must have a valid address(not p.o box no.) in the State of Colorado for the purpose of serving notices or demands as a representative of the organization.

The following steps should be followed to start a nonprofit corporation in Colorado.

1) Choosing a Name – As per the Act, the corporate name for the proposed organization need not be in English – as long as it is translated into English for filing purposes. The name can include Arabic or Roman numerals. Also read the section on naming a nonprofit organization on the process to be followed.

2) Drafting the Articles of incorporation – The Articles of incorporation shall lay down the broad policies related to governing of the Nonprofit. The following provisions of the Act must be kept in mind when drafting the Articles of Incorporation –

As per the Act, The Article must contain the name of the organization, the street address of the initial registered office of the nonprofit organization, the name of its initial registered agent at that office, The address of the initial principal office which may be different from the state of Incorporation, The name and address of each of the incorporators, the provisions regarding membership or nonmembership of the proposed organization, The written consent of the initial registered agent to undertake his duties and provisions that would be applicable in case of dissolution of the nonprofit organization.

The Articles may additionally have (though not required) the names and addresses of the the initial directors and the purpose (s) for which the organization is being established.

Additionally, If a nonprofit organization proposed to seek federal tax exemption,  the Articles must specify the sections (say 501(c)(3) or others) under which the exemption would be sought. IRS prescribes this as a mandatory clause in the Article for recognizing tax exempt status for an organization.

Further, if tax exemption is sought from the State tax authorities – this should also be mentioned in the Articles of Incorporation.

Click here to download a sample Articles of incorporation.

3)Drafting of Organization Bylaws – The following provisions of the Act must be adhered to when drafting the bylaws –

a)The bylaws or the articles must specify the minimum and maximum number of directors permissible on a board. The board must have minimum 1 director. There is no upper cap on the number of directors.

b)All directors must be natural persons (companies not allowed as board member) and must be 18 years or older as on the date of incorporation.

c) If the proposed nonprofit corporation chooses to have voting members, all directors except the initial directors shall be elected by annual voting procedure of the members.

d) The term of directors to be specified in the Articles. In the absence of this clause, directors will have a one year term with possibility of re-election.

e) The Director’s quorum – of a meeting to be decided by the articles or the bylaws. If nothing is mentioned majority would constitute the quorum. The director’s quorum  can not be less than 1/3rd in any case.

f) Officer’s Appointment – the articles or the bylaws should mention the officers to be appointed. In the absence of such a clause, the organization will have to compulsorily elect  a president, a secretary and a treasurer. All officers must be natural persons and should be 18 years or older. The act also permits one person to hold more than one office at a time.

Click here to download a sample bylaw for Colorado nonprofit organization.

Filing fees – The Act does not specify any particular filing fee as specified by many other state laws. The latest filing fee applicable to filing a nonprofit corporation can be obtained at the address given below for online filing.

Execution

The above mentioned document shall be signed by all the incorporators or the initial directors or by the registered agent (if applicable to a particular document) and delivered to the secretary of state of Colorado for filing.

The documents must be submitted in duplicate (original and one conformed copy) along with the requisite filing fees to the office of the Secretary of state.

The documents must also be accompanied by a covering letter mentioning the address to which a copy of filed documents need to be sent upon successful completion of the filing.

Electronic filing– Colorado is one of the few states which has provisions for limited online filing for Incorporation. You can begin the incorporation process by visiting:

http://www.sos.state.co.us/biz/FileDoc.do

Manual Filing – If you prefer to Incorporate by manually submitting your documents, contact the SOS office at 1700 Broadway, Denver CO 80290  |  Phone number – 303-894-2200  or email at   [email protected]

Final Incorporation – A nonprofit organization comes into a formal legal existence upon completion of successful filing of documents.

A filing would be successful when the secretary of state legibly stamps or endorses the word “filed” on the submitted documents under his name, official title and the date of effective filing on both the sets documents submitted for filing.

The secretary returns one copy of the filed document along with a receipt of the fee paid by the applicant and a formal certificate of Incorporation signed by the secretary (in person or  fascimile signature) as an evidence of Incorporation.

In case of refusal to file, the secretary of state must do so within 10 days of filing along with statement explaining a brief reason for refusal.

Conclusion

The process of starting a nonprofit corporation in Colorado is pretty simple.

You will not even need the services f an attorney for the same. However if you wish to engage an attorney or an external service provider, you can find several organizations that provide same day filing services at a reasonable fee.

(Hint: Search for a local service provider on the net)

Even if you decide to outsource this activity, it is advisable that you draft your own articles and bylaws before letting the attorney ratify it as the contents of the articles and bylaws will eventually govern the day to day operations of your organization.

Resources: You can assess the bare Colorado Nonprofit Corporation Act at http://www.i55mall.com/FMF/index.html