CORPORATE TRANSACTIONS & COMPLIANCE BLOG

Registered Agent No Longer Required When Filing Colorado Charitable Registrations

By: Ron Barrett, COGENCY GLOBAL INC. on Thu, Nov 15, 2018

Registered Agents No Longer Required for Colorado Charitable Registrations and RenewalsEffective October 1st, 2018, the Code of Colorado Regulations no longer requires charitable organizations fundraising in Colorado to name a registered agent in the online registration statements or registration statement renewals required by the Colorado Charitable Solicitations Act.

Keep in mind, however, that foreign charities (those formed in another state) are still required to file a Statement of Foreign Entity Authority (also called a “qualification”) -- which requires a registered agent — as well as a Periodic Report, per 7-90-801(5) CRS, the Colorado Corporations and Association Act:

7-90-801. Authority to transact business or conduct activities required.

(5) A foreign nonprofit entity shall be considered to be transacting business or conducting activities in this state if it is required to file a registration statement with the secretary of state pursuant to Section 6-16-104, C.R.S.

Some Charities Overlook or Ignore Qualification Requirement

Truth is, many charities don’t realize that corporate filings do apply to them, which means there are nonprofits that register to solicit charitable donations in Colorado but fail to obtain the necessary authorization to conduct business in the state. This oversight is not unusual, as qualification filings are not a prerequisite for obtaining a charitable registration in Colorado, unlike other states.

Of course, there are also some organizations that just decide to take a risk and not file for the authorization to conduct business due to the added time and money involved with qualification filings, ongoing annual reporting compliance and the requirement to name a registered agent for service of process and other legal and tax notification purposes.

Colorado is not alone in this approach to nonprofit compliance. Out-of-state (foreign) charitable corporations in California must register with the Secretary of State if they are conducting any business within the state. ‘Doing business’ for nonprofits includes soliciting donations in California by mail, email, telephone, advertisements in publications, or any other means. Foreign nonprofits that register under the charitable solicitations law must also qualify to do business in the state by making a separate filing with the California Secretary of State, independent of the charitable registration process. Like Colorado, California requires nonprofits to appoint a registered agent and file a Statement of Information each year to remain compliant.

D.C. and North Dakota: No Corporate Qualification, No Solicitation

Some States Require Corporate Qualification Before Obtaining a License to FundraiseUnlike Colorado, the District of Columbia (D.C.) and North Dakota do require corporate qualification prior to issuing a license to solicit. In D.C., no organization or person is authorized to solicit funds for charitable purposes without a valid Certificate of Registration, known as a Charitable Solicitation Basic Business License. Nonprofits foreign to D.C. must obtain a Certificate of Authority prior to registering to solicit.

Similar rules apply in North Dakota. If your nonprofit is incorporated outside of North Dakota, you must file a completed Certificate of Authority Foreign Corporation Application and name a registered agent residing in the state, in addition to filing the Charitable Organization Registration Statement for fundraising inside the state.

Future of Colorado Charitable Registration

So where will Colorado go from here? Absent additional rule, law or policy changes, it’s safe to presume that corporate qualification will not be a prerequisite for charitable registration in Colorado.

However, charities that want to ensure they fully meet their state registration requirements should register to conduct business in Colorado, in addition to registering to fundraise, if they are soliciting charitable donations in the state.

 

This article is provided for informational purposes only and should not be considered, or relied upon, as legal or tax advice.

Topics: Charitable Solicitation Registration, Registered Agent, Nonprofit Registration and Compliance