If you’re looking to start a Colorado nonprofit organization, you’re in the right place. This guide will help you file formation documents, get tax identification numbers and exemptions, and obtain authority to solicit donations.
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...
The most common legal structure for a nonprofit is a nonprofit corporation. Less common options include a B-Corporation, nonprofit LLC, L3C, unincorporated nonprofit association, and a trust. If you are undecided, learn about legal structures for nonprofits.
The rest of this article assumes you are creating a nonprofit corporation.
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.
Identify the nonprofit’s Colorado Registered Agent. This individual or company receives notice of lawsuit and other legal service for the corporation.
File articles of incorporation to create your non-profit corporation.
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 (potentially using a template) 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.
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.
Your nonprofit must obtain an EIN regardless of whether it will hire employees.
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:
If your nonprofit has employees and withholds income, then you must obtain an unemployment insurance tax account number and rate:
Save money and build credibility by obtaining federal income tax exemption. This is most difficult and costly step of setting up a nonprofit.
501(c) is the chapter of the Internal Revenue Code that defines nonprofit tax exemptions. Charitable, religious, and educational organizations seek exemption under 501(c)(3) and apply for recognition by filing Form 1023.
The IRS will return a Determination Letter which officially recognized your exemption.
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
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.
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:
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).
You must file federal and state tax returns. You must also file:
Government paperwork is complicated. Working 1-on-1 with one of our nonprofit specialists is not. We handle your government paperwork so you can focus on your mission.Learn More
Please feel free to contact us with any questions or feedback about this guide on how to start a non-profit organization in Colorado.
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