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How to Start a Non-Profit Organization in Colorado


Welcome to our Colorado nonprofit resource guide! This free guide will help you understand how to start your nonprofit in Colorado and become 501(c)(3) tax exempt. You will find step-by-step instructions and get answers to common questions like "what does it cost?" and "how many board members do I need?".

If you're starting out with little or no funds, gaining professional assistance is rarely an option. In that case, you may want to commit to researching the process and filing government applications on your own. This route is not for the faint of heart but is certainly achievable if you work diligently. The following step-by-step guide should help you as you undertake this process.


1 Confirm a New Nonprofit is Necessary

As you begin, take a moment to consider if you should start a new non-profit organization. According to the National Center for Charitable Statistics, there were over 28,000 nonprofit organizations in Colorado in 2009. To decide if a new nonprofit is necessary...

  • Research if an organization already exists in your area that serves your cause. By working together you avoid diluting the effect of fundraising dollars and volunteer hours available in your geography.
  • Consider fiscal sponsorship, in which an umbrella 501(c) organization incubates your charitable nonprofit. Fiscal sponsors permit your cause to receive tax-deductible donations and often handle administrative paperwork.
2 Understand the Benefits of Incorporating

This guide focuses on starting a nonprofit corporation, the traditional nonprofit legal structure. This legal structure has a few key benefits. First and foremost, the nonprofit corporation limits the liability of the organization's officers and directors. Second, the nonprofit corporation is familiar to donors and grant makers. Lastly, nonprofit corporations meet a wide range of IRS eligibility requirements, in particular those relating to the 501(c)(3) application.

3 Check Name Availability

The legal name of your nonprofit corporation may not conflict with any other registered name. Check availability of your desired name by conducting a name search.

Name Search:
Colorado Online Records Search
Name Reservation:
Optional
Suffix:
The entity name of a nonprofit corporation may, but need not, contain the term or abbreviation "corporation", "incorporated", "company", "limited", "corp.", "inc.", "co.", or "ltd.". CRS §7-90-601
4 Recruit Incorporators and/or Initial Directors
  • Identify the incorporators. These individuals will execute the articles of incorporation and submit them to the state. Colorado requires a minimum of one incorporator who is an individual at least eighteen years old (CRS §7-122-101).
  • Recruit initial directors for your nonprofit board of directors. In Colorado, naming the initial directors in the articles of incorporation is optional (CRS §7-122-102(2)(a)). Directors need not be residents of Colorado or members of the nonprofit unless stated in the bylaws (CRS §7-128-102). The number or minimum/maximum number of directors is set by the bylaws (CRS §7-128-103).
5 Appoint a Registered Agent

Identify the nonprofit’s Colorado registered agent. A registered agent is a legal appointee who is responsible for receiving legal notices for your nonprofit. Your registered agent must be physically located in Colorado and maintain an office that is open during regular business hours.

We provide a convenient service to act as your Colorado registered agent. As part of that service, our local office in Boulder, CO receives your legal documents and sends you notifications. You view your documents in your secure online account. Registered agent is included in our nonprofit formation service or you can sign up for this service separately.

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Fast Facts

Below is an overview of the paperwork, cost, and time to start an Colorado nonprofit.


Paperwork
  • Form ARTINC_NPC: Articles of Incorporation for a Nonprofit Corporation
  • Bylaws
  • IRS Form SS-4: Obtain an EIN
  • IRS Form 1023: 501(c) Tax Exempt Application
  • IRS Determination Letter
  • Form CR-0100: Colorado Sales Tax Withholding Account Application
  • Form UITL-100: Application for Unemployment Insurance Account and Determination of Employer Liability, if applicable
  • Form DR-0715: Application for Sales Tax Exemption for Colorado Organizations
  • Form DR-0716: Statement of Non-Profit - Church, Synagogue, or Organization
  • Colorado Charitable Registration (onlin
    Cost
    • Incorporation: $50
    • 501(c): $400 or $850 IRS fee
    • Colorado charitable license: $8
    • Colorado charitable registration: $10

    Time
    • Incorporation: Immediately
    • 501(c): ~3-6 months
6 File Colorado Nonprofit Articles of Incorporation

File articles of incorporation to create your non-profit corporation.

Submit to:
Colorado Secretary of State
http://www.sos.state.co.us/
Form:
Paper forms are not accepted. This is a sample: Form ARTINC_NPC: Articles of Incorporation for a Nonprofit Corporation
Instructions:
Instructions: Articles of Incorporation for a Nonprofit Corporation
Filing Method:
Online
Fee:
$50
Turnaround:
Immediately
Law:
Colorado Revised Statutes - Title 7: Corporations and Associations - Articles 121-137: Colorado Revised Nonprofit Corporation Act
Notes:
  • The IRS requires specific language in the articles of incorporation to qualify for 501(c)(3) federal tax exemption. Refer to IRS Pub 557 for guidance and sample language.
  • Immediately after incorporating you can setup Secure Business Filing on your record so that no one else can make changes to it. Click “setup secure business filing” on the transaction confirmation page.
  • Even though the articles of incorporation are filed electronically, you should download a copy for secure storage in your company records and for use during the course of business (e.g. for setting up a business bank account).
7 Establish Organization Records

Nonprofit must keep corporate records and accounting records in compliance with CRS §7-136-101. Your filed articles of incorporation is the first document for your nonprofit corporate records. Your corporation will generate many other official records such as bylaws, meeting minutes, and your EIN.

Office supplies intended for a nonprofit corporation will help you stay organized and save time. Optionally, get a company record book, seal, and document templates.

Draft bylaws which is the governing document for the nonprofit. The bylaws of a nonprofit corporation may contain any provision for managing and regulating the affairs of the nonprofit corporation that is not inconsistent with law or with the articles of incorporation. (CRS §7-122-106(2)). You will review and ratify the bylaws at your first board of directors meeting.

The Board should create and adopt a conflict of interest policy. This document is submitted to the IRS at the time they apply for 501(c)(3) tax exemption.

8 Hold Organizational Meeting of the Directors

Hold the first meeting of the board of directors or incorporators (CRS §7-122-105). At this meeting, the nonprofit should approve the bylaws, elect additional directors, appoint officers, and approve initial resolutions such as opening a company bank account. Keep minutes of this meeting.

9 Get a Federal Employer Identification Number (EIN)

Your nonprofit must obtain an EIN regardless of whether it will hire employees.

Submit to:
Internal Revenue Service
http://www.irs.gov/
Form:
IRS Form SS-4
Guidance:
IRS Pub 1635: Understanding Your EIN
Filing Method:
Mail, phone, fax, or apply online with the IRS
Fee:
$0
Turnaround:
Immediately online
Notes:
The IRS website is only available during certain hours. Print your EIN before closing your session.
10 Get Colorado State Tax Identification Numbers/Accounts

Colorado offers a consolidated state tax registration application online or you can file two registrations by mail.

To apply for a sales tax account and/or wage withholding account:

Submit to:
Colorado Department of Revenue
http://www.colorado.gov/revenue
Form:
Form CR-0100: Colorado Sales Tax Withholding Account Application
Filing Method:
Mail, in-person, or online
Fee:
$8 for charitable license. $50 deposit if retail sales tax license needed.
Turnaround:
~2-3 weeks online. ~4-6 weeks by mail. Immediately in-person.

If your nonprofit has employees and withholds income, then you must obtain an unemployment insurance tax account number and rate:

Submit to:
Colorado Department of Labor and Employment
http://www.colorado.gov/cs/Satellite/CDLE-UnempBenefits/CDLE/1240336898069
Form:
Form UITL-100: Application for Unemployment Insurance Account and Determination of Employer Liability
Filing Method:
Mail or online
Fee:
$0
Notes:
This application is only for unemployment insurance purposes.

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11 Apply for 501(c)

Applying for 501(c) tax exemption is often the most complex and time-consuming steps in setting up a nonprofit. It is also one of the most important, as obtaining a tax exemption is what is enables an organization to successfully raise funds, apply for grants, be exempt from IRS income tax, and enjoy a variety of other benefits exclusively available to nonprofits.

501(c) is the chapter of the Internal Revenue Code that regulates nonprofit organizations. Most nonprofits are 501(c)(3)s, including charities and foundations. There are a few forms used to apply for federal tax exemption. 501(c)(3) nonprofits apply using Form 1023 or Form 1023-EZ. Not all organizations however are eligible to file the streamlined Form 1023-EZ. Other types of nonprofits, including 501(c)(4)s and 501(c)(6)s, apply using Form 1024.

Seeking the help of a professional with this step is common. Choosing the right form to file is just one consideration. A great deal of expertise, time, and preparation goes into creating a successful application. The IRS estimates over 100 hours are spent on researching and preparing the application. If you're looking for professional assistance, check out our formation services to help you with your 501(c) application and the rest of the process. Our nonprofit specialists will help you from start to finish.

Submit to:
Internal Revenue Service
http://www.irs.gov/
Form:
IRS Form 1023, IRS Form 1023-EZ, or IRS Form 1024
Instructions:
IRS Instructions for Form 1023, IRS Instructions for Form 1023-EZ, or IRS Instructions for Form 1024
Guidance:
IRS Pub 557: Tax-Exempt Status for Your Organization
Filing Method:
Mail
Fee:
$400 or $850
Turnaround:
1023-EZ average: <1 month. 1023 average: 3-6 months.

The IRS will return a Determination Letter which officially recognized your exemption.

12 Apply for Colorado Tax Exemption(s)

Upon obtaining your IRS Determination Letter, your organization is automatically exempt from Colorado corporate income taxes. No application or notification is necessary.

"If a corporation is exempt from federal income tax it is generally exempt from Colorado income tax and from filing a Colorado income tax return."
Colorado Department of Revenue website

More information:
Colorado Department of Revenue
http://www.colorado.gov/revenue

Colorado charitable organizations can apply for exemption from state sales tax and state-administered local sales tax for purchases made while conducting regular charitable functions and activities.

Submit to:
Colorado Department of Revenue
http://www.colorado.gov/revenue
Form:
Form DR-0715: Application for Sales Tax Exemption for Colorado Organizations and Form DR-0716: Statement of Non-Profit - Church, Synagogue, or Organization
Fee:
$0
Notes:
You must attach your IRS Determination Letter. If approved, you will receive a Certificate of Exemption.
13 Register for Charitable Solicitation / Fundraising

Before soliciting any funds or hiring solicitors, you must complete your charitable organization registration in each state where you will raise funds.

If you need to register in many states, review our guide “Charitable Solicitation Registration using the Unified Registration Statement (URS)”. 39 states accept the URS, but Colorado does not.

Any charitable organization that (1) solicits contributions in Colorado, (2) has contributions solicited in Colorado on its behalf, or (3) participates in a charitable sales promotion must register in Colorado:

Submit to:
Colorado Secretary of State
http://www.sos.state.co.us/
Exemptions:
If you do not raise over $25,000, from no more than 10 persons, and do not hire paid solicitors... For full list of exemptions see C.R.S. §6-16-104(6).
Filing Method:
Online
Instructions:
Instructions for Registering as a Charitable Organization
Fee:
$10
Notes:
  • Exempt organizations do not need to file. In some states, exempt organizations must file an exemption form.
  • You must file online.
  • You can view and print a Certificate of Registration from the summary screen of any registered group.
14 Obtain Other Business Licenses & Permits

To run your business legally, you must obtain applicable licenses and permits. The easiest way to navigate the wide range of federal, state, and local requirements is to search by your business type and locality using the Small Business Administration Business License & Permit look-up tool.

Bingo and raffles are regulated by the Colorado Secretary of State. Apply for a bingo and raffle license by filing Form LE7-8_COMB ($100 state fee).

* Ongoing Filings to Maintain Your Nonprofit

You must file federal and state tax returns. You must also file:

  • Nonprofit corporations file Periodic Report ($10 state fee) annually online. Find your record then use the link to file your periodic report. It is due during a five month window surrounding the anniversary month of incorporation.
  • Charities soliciting donations in Colorado must register annually with the Colorado Secretary of State by filing registration renewal online ($10 state fee).
  • Bingo and raffle licenses must be renewed on the calendar year. File bingo-raffle license renewal ($100 state fee) with the Colorado Secretary of State.

Tax-Exempt in 2 Weeks!

Download the case study of how our client, Reform It Now, obtained 501(c)(3) tax exemption in only two weeks using IRS Form 1023-EZ!

  • "Harbor Compliance has done an outstanding, amazing and utterly brilliant job helping Reform It Now organize and obtain its 501(c)(3) status, quickly.
        In point of fact, Harbor Compliance had our 501(c)(3) determination letter in our hands 8 calendar days before your competitor had scheduled our initial consultation. Yes, that's right. They booked the consultation 30 days after we paid their fee, and you had us together with a consultant in less than a week (mostly because I had to get ready).
        From filing the 1023EZ on August 1st to receipt of the determination letter on August 14th is, in my humble opinion, simply breathtaking and I dare say, ONLY Harbor Compliance could have achieved that."
    - Dr. Bob A.

This page was last fact-checked September 24, 2013.