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Advantages of Incorporating a Business in Colorado

One of the key drivers of startup company in Colorado is the numerous business incentives being offered apart from the salient advantages. Once you have formed a Colorado business, you or your business entity will be able to benefit from these incentives and advantages. The Department of Revenue of Colorado administers most of the tax incentives including exemptions as well as tax credits, while OEDIT (Office of Economic Development and International Trade) along with other state agencies administer non-tax programs and other credit programs.

Business Growth Incentive for New Businesses

As one of the top registered agents in the state, we can help you to register a new business in Colorado as this will ensure you are able to leverage all types of business gains and state provided incentives and grants. Let’s take a quick look at why Colorado is considered one of the best places for establishing a business:

Advantage#1: Salient benefits of Corporation or LLC formation

Corporation

  • Limited Liability: The shareholders in of a Colorado C Corporation will enjoy limited liability where the corporation’s debts are concerned.
  • Easy Conversion to S Corporation: If you register a new company in Colorado as a C Corporation, you can always convert with ease to an S Corporation and enjoy the benefits of flow through taxation.
  • Long life: When you register a new business in Colorado as a Corporation, you will be able to raise additional funds by selling stock.
  • Colorado public benefit corporation: You can also establish your business entity as a Colorado public benefit corporation, which will enable long-term value creation. Such a corporation will also be able to benefit from several incentives laid out by the state.

LLC

  • Flexible Profit Distribution: A startup company Colorado LLC has the benefit of being able to select different ways of distribution of profits
  • Limited Liability: As an owner of a Colorado LLC, you will be able to enjoy limited liability protection quite similar to what a corporation enjoys.
  • Flow through Taxation: When you register a new company in Colorado, an LLC can benefit from the process of flow through taxation that will ensure there are no double taxations.
  • No Minutes of meetings: Unlike a corporation, an LLC startup company in Colorado will not be required to maintain any minutes of the meetings or resolutions.

Advantage#2: Beneficial Programs

Several beneficial programs have been introduced in the state of Colorado to enhance the growth of small and medium sized businesses. Once you register a new business in Colorado, you will be able to benefit from the programs especially those that are either focused on a business specific industry, type of business, or location of business. Some of the top programs include:

  • Colorado Credit Reserve (CRR): This is a program wherein a startup company in Colorado can avail credit options. This program is being administered by the Colorado Housing and Finance Authority (CHFA) and Colorado Office of Economic Development and International Trade (OEDIT).
  • Work Opportunity Tax Credit (WOTC): This is a type of federal tax credit wherein employers are encouraged towards hiring a targeted group of job seekers. If you register a new company in Colorado, you can get federal tax credit between $2,400 and $9, 600 for each new hire.
  • Colorado Microloans: This is a Microloan Program and its aim is to provide small loans to startup companies in Colorado as well as entrepreneurial small businesses. The program has been created by the Colorado Economic Development Commission (EDC) and is being administered by the Colorado Office of Economic Development and International Trade (OEDIT). The loan amount through this program can vary from $5,000 to $50,000.

Are there any Disadvantages of Incorporating in Colorado?

The state of Colorado provides a long list of benefits and advantages to businesses but are there any disadvantages if you register a new business in Colorado? The disadvantages are very few and almost inconsequential like, the fact that you have to pay a higher fee and the time taken to process incorporation is also longer as compared to other forms of organization. The fact is that these are small disadvantages compared to the several benefits that can steer ahead your business towards substantial growth.

Apart from the above mentioned programs, there are several other programs that businesses can benefit from including the Transferable Tax Credit program, Strategic Fund Incentive, State Trade Expansion Program, Regional Tourism Act, Job Growth Incentive Tax Credit, and Enterprise Zone Tax Credits among others.

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