What’s the big deal about not filing my Colorado business entity periodic report on time?

Late fees!

Gah!

So you can read more here more about the specifics of how to cure the delinquency in your periodic report filing requirement from a paperwork perspective. Log in, autofill, submit, done.

But that’s not what I’m here to talk about. This is just a friendly little TL;DR PSA about why you actually should bother to make sure that dang thing gets filed each year. Yes, even state-level corporate paperwork gets to be a lot like Blockbuster / the public library….

First off, don’t get too worried if you see the word “DELINQUENT” defacing the name of your LLC online. It’s a harsh word, but really, it doesn’t mean much other than you have failed to pay this $10 annual tax on the privilege the state provides business owners to separate their personal assets from business assets. (A small price to pay, all things considered.) Nevertheless, governments exist for taxation, and Colorado is no different… so now you must be wondering…

How much is the fee?

$100.00. Yeah, bummer, right?

At the end of the day, there is little legal impact of neglecting this ministerial box-checking exercise. The real impact is to your DoorDash budget for the year: If you miss your annual filing deadline by more that a few weeks, the $10 annual “check-in; I’m still alive” fee jumps to $100.00. Yes, even for the great state of Colorado, it’s all about the Benjamins.

TL;DR:

File your super-simple periodic reports on time. Or pay the fine.

Separate but related:

I advise lots of clients to consider whether they really need a Delaware corporation to operate a bootstrapped consultancy in Colorado. One of the main reasons I like Colorado entities? Ease of filing: It can be done online in a matter of minutes, all records are public, and the limits on liability enjoyed by the owners are (as far as everything I’ve seen to date) basically indistinguishable from anything I’ve seen in Delaware.

The only other state I often recommend (where owners are Colorado-based) is Delaware, and I reserve this primarily for startups seeking institutional funds through a venture round of fundraising. (More on this elsewhere in the Forum, but the gist is that VCs are accustomed to dealing with Delaware corporations, are familiar with the legal principles that direct the governance of such entities, and basically seek to limit their costs by requiring their portfolio companies to all be Delaware corps.)

Nothing nefarious about the VCs’ approach: they are, after all, providing a huge capital injection to accelerate their startups’ growth.

BUT for companies not seeking venture financing, with Colorado-based owners/managers, a Colorado corporation will do just fine and will save you some cash on the “corporate formalities” you hear so much about.

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Foundry Legal is a law practice.  We primarily focus on data privacy, emerging technology companies and social impact organizations, and capital formation through private securities offerings and strategic investments/acquisitions. 

Occasionally we will find an issue that really, really goes against something we stand for and when that happens we won’t hestitate to get involved.  

The firm serves clients across a range of industries, including new agriculture, financial institutions, aerospace, and professional services.  We are in Denver, Colorado.  Other stuff about us

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