Foreign Qualification in Colorado

If you have formed a business and have been operating it in the state of registration and you suddenly decide that it is time to expand the operations, there are options for you. You can look at several states including Colorado and take a decision of starting a branch of the company in this state. You can register a separate company or new company and go through the entire registration process or simply apply for foreign qualification in Colorado. This is a guide that focuses on providing relevant information pertaining to various aspects of foreign qualification including state laws governing the process, foreign qualification requirements, fee, and conducting Colorado foreign entity search among others.

Colorado Foreign Qualification

Most often than not, first time entrepreneurs get confused by the word “foreign” and think that it refers to a company that has to be formed outside the United States. In reality and from the perspective of state laws related to business entity compliance, “foreign” simply refers to any business that has been registered in any U.S. state other than an entity’s registration or domestic state. So if your entity is considered a domestic entity in New York and if you want to start a business in Colorado then you will need to undergo foreign qualification in Colorado. The process of Colorado foreign business registration will also ensure that such an entity has access to and benefits from various business incentives, grants, and tax credit programs.

What is a Colorado foreign qualification?

If you are planning to expand your corporation, LLC, limited partnerships (LPs), or limited liability partnerships (LLPs) to the state of Colorado from another state, then foreign qualification in Colorado becomes necessary. The registration of a foreign entity in the state is governed by the state laws or Colorado Code, Title 7 – Corporations and Associations. The registration process as well as requirements for foreign entities may vary according to the business structure. Hence, it is necessary to conduct Colorado foreign entity search prior to registering in this state. Let’s look at an example to understand this:

Example: You have formed a domestic LLC in Vermont by filing the Articles of Organization. Here, Vermont will be considered to be your home state or state of formation. Now, if you want to expand your business to Colorado then there are two options. One is to close your existing business and register a new domestic LLC in Colorado. The second option is to qualify for Colorado LLC foreign registration and this will essentially provide you with the authority to transact business in this state without the need to close your company in Vermont.

Doing business in Colorado

Every business whether an LLC or a corporation or any other entity is different in more ways than one! They differ in terms of formation, operations, and governing laws. One important aspect to consider is the need for Colorado foreign corporation registration or foreign qualification. The registration of an entity depends on whether such an entity is doing business in Colorado or simply conducting specific activities. The act of doing business is defined by the 2022 Colorado Code, Title 7 – Corporations and Associations, Article 90 – Colorado Corporations and Associations Act, Part 8 – Foreign Entities § 7-90-801, Authority to Transact Business or Conduct Activities Required.

According to the Colorado Corporations and Associations Act, a foreign entity may not be considered to be doing business in this state if they are:

Maintaining bank accounts in this state
Defending, settling, or maintaining any dispute or proceeding on its own behalf
Holding any meetings of their managers or owners
Carrying forward any activities concerning the internal affairs of such a company
Selling products or services through independent contractors
Owning real or personal property
Securing or collecting debts or enforcing mortgages
Maintaining offices for the transfer or exchange of owner’s interests or its own securities
Conducting an isolated transaction, which is completed within 30 days

If you are conducting any other activity apart from the ones mentioned above then you may be required to apply for a Colorado foreign business registration.

Colorado Foreign Qualification Process

If you have an existing business like an LLC or a corporation in any other state and are thinking of expanding your operations in the state of Colorado then it will be considered as a foreign entity in this state. You will be required to apply for foreign qualification in Colorado and the process will be governed by the 2022 Colorado Code, Title 7 – Corporations and Associations. Each entity based in any other state and which wishes to conduct their business in Colorado will need to apply for proper authority. There can be severe penalties of transacting business without the state authority. Let us look at the process of Colorado foreign business registration for LLCs and corporations.

Colorado Foreign Corporation Registration

If you have incorporated in another state and are currently operating in that state but have a desire to expand your operations in Colorado then you will need to apply for the process of foreign qualification. This involves applying for Colorado foreign corporation registration to get the necessary authority to transact business in this state. Let us understand in detail, what this process entails.

Example: You have incorporated in Illinois and operate your business in the said state. After a few years, if you want to expand your business to Colorado then it will be considered a foreign corporation in the latter state and you will need to conduct a Colorado foreign entity search prior to applying for registration.

The process of foreign qualification involves registering a corporation in the state of Colorado although the process and fees will be different from that of registering a domestic company. The various steps involved in the process of Colorado foreign corporation registration are:

Entity name or True Name – The entity name is also known as the true name in Colorado. If you are planning to transact business in this state then you will need to register a true name pursuant to CO Code § 7-90-604 (2022). You will need to conduct a Colorado foreign entity search or true name availability search. If the chosen true name is available then you can use the Statement of Registration of True Name form along with a fee of $25. If the true name is not available then you will need to file a DBA (Doing Business As) also known as an assumed name or a trade name.
Registered Agent – Whether you are forming a domestic entity or applying for Colorado foreign corporation registration, there are certain state guidelines you have to follow. One such law is to continuously maintain a registered agent in the state pursuant to CO Code § 7-125-101 (2022). We at IncParadise are one of the top Colorado registered agents and have helped several domestic and foreign entities to incorporate in this state.
Foreign Entity Authority Statement – The most important step towards Colorado foreign corporation registration is to get the necessary authorization to transact business in the state. You will need to file the Foreign Entity Authority Statement pursuant to the provisions of CO Code § 7-90-801 (2022). This application has to be submitted with the Office of the Colorado Secretary of State along with a fee of $100.

Do you want to register a foreign Corporation in Colorado?

Colorado Foreign LLC Registration

If you have formed a limited-liability company in another state and are contemplating the idea to expand your business operations in the state of Colorado then you have to undergo the process of foreign qualification. This process is also known as Colorado LLC foreign registration and will help you to transact business in the state without the need to register a new or domestic LLC. The Colorado foreign business registration for an LLC is governed by 2022 Colorado Code, Title 7 – Corporations and Associations, Article 80 – Limited Liability Companies, Part 9 – Foreign Limited Liability Companies. Let’s look at an example to understand this better.

Example: You have registered your LLC in Maryland and are operating there. Maryland will be considered as your home state. Now, if you want to expand your business in another state like Colorado then your Maryland limited-liability company will be considered a foreign LLC in this state. In such a scenario, Colorado foreign business registration will become necessary.

There are certain steps involved in the process of Colorado LLC foreign registration. Let’s look at these important steps in detail.

LLC Name or True Name – One of the foremost requirements of Colorado LLC foreign registration is identifying a business name. This is also known as a true name in this state and should be in accordance with the naming guidelines of the state. You will also need to conduct a Colorado foreign entity search or true name availability search to identify if your chosen name is available. If the chosen true name is available then you can use the Statement of Registration of True Name form along with a fee of $25. If the chosen LLC name is not available or doesn’t comply with state naming guidelines then you may be required to file a DBA (Doing Business As) or trade name in the state.
Registered Agent – One of the important aspects of any new business formation including Colorado LLC foreign registration is the service of process and this is executed by a registered agent. A foreign limited liability company in Colorado will need to continuously maintain a registered agent in the state pursuant to CO Code § 7-80-902 (2022). Top registered agent services are offered by IncParadise in Colorado and this will not only help fulfill state requirements like service of process but also assist with other annual compliances.
Foreign Entity Authority Statement – A foreign limited liability company that wishes to transact business in this state will need to go through the process of foreign qualification or Colorado foreign business registration. Foreign qualification requires an LLC to file the Foreign Entity Authority Statement pursuant to the provisions of CO Code § 7-80-901 (2022). This form has to be submitted with the Office of the Colorado Secretary of State along with a fee of $100.

Want to form a foreign LLC in Colorado?

Need Any Assistance in Applying for Colorado Foreign Qualification?

Colorado has much to offer to businesses right from a diverse industry to highly committed talent pool, pro-business climate, grants and other funding opportunities, and business incentive programs. If you are thinking of expanding your existing business to this state then you will have to undergo the process of foreign qualification in Colorado before you can begin operations. As one of the leading registered agents in Colorado, IncParadise can assist you with the process of foreign LLC registration or incorporation.

We provide several other business related additional services in Colorado that will help in fulfilling annual compliances as required by your company like filing of annual reports or getting an EIN tax ID. We also provide foreign qualification services in all 50 states.