Corporations in Colorado | Boulder Business Lawyer
Despite the rise of the limited liability company (LLC) form of business entity in Colorado and elsewhere, corporations are still a very common form of business entity, and, although the administrative burden and dual layers of taxation mean they are not well suited for everyone, there are still good reasons to use them in certain situations.
All corporations are obligated to file a corporate tax return. If an S Corporation election is allowed (determining whether an S Corporation election is allowed is based on a number of factors that are outside of the scope of this article) and such election is timely made with the IRS, the corporation will not be subject to the C Corporation taxing regime, although an entity level tax return (Form 1120-S) will still need to be filed. Otherwise, if no S Corporation election is made, the corporation will be required to pay taxes at the entity level and the individual level (i.e., no pass-through taxation). The analysis of whether the corporate form is the best suited for your tax purposes has become more complex following the passage and implementation of the Tax Cuts and Jobs Act (TCJA) of 2017, with smaller C Corporations being more disadvantaged from a tax standpoint than they were before passage of the law and larger C Corporations receiving more tax advantages.
If you are starting a business in Colorado or have already organized your business entity as a corporation and are looking for a Boulder Small Business Lawyer with a results oriented approach tailored to your matter’s specific needs, contact Newell Law. We have the experience and knowledge to achieve the best results possible for your case.