Colorado has begun enforcing its requirement that out-of-state nonprofit organizations soliciting charitable contributions in the state must be qualified to do business in the state before it approves the organization’s charitable solicitation registration or renewal.
New Foreign Qualification Requirement
Colorado now requires all charitable organizations registered or preparing to register to solicit charitable contributions in Colorado that are incorporated in a state other than Colorado to obtain a Statement of Foreign Entity Authority (foreign qualification to transact business or conduct activities in the state). This foreign qualification must be in place before the organization’s charitable solicitation registration or renewal will be approved. While this requirement has been statutorily required for many years (see CO Rev. Stat. § 7-90-801(5)), Colorado is only now beginning to actively enforce it.
If the organization is legally formed in a jurisdiction other than Colorado and is currently registered—or plans to register—to solicit charitable contributions in the state, it must complete the foreign qualification process first.
New Registered Agent Requirement
As a prerequisite for obtaining a foreign qualification, Colorado requires the appointment of a registered agent with a physical address in Colorado. The registered agent may be an individual Colorado resident or a commercial registered agent service.
Certificate of Good Standing
Although Colorado’s foreign qualification filing process does not require submission of a Certificate of Good Standing (also called a Certificate of Existence), all organizations must be in good standing in their home state to obtain a foreign qualification in Colorado. Good standing means (1) the organization has met its state filing obligations (such as filing of annual reports) in its state of incorporation and (2) the organization’s state of incorporation has not suspended, dissolved, or revoked the organization’s legal status. Accordingly, the organization should take steps to confirm that its home-state status is current and in good standing.
Ongoing Foreign Qualification Compliance: Colorado Periodic Report (annual report)
Once an organization is qualified to transact business in Colorado as a foreign entity, it must file ongoing Periodic Reports with the Secretary of State. This Periodic Report must be filed annually, in addition to the charitable registration renewal.
State Filing Fees (current published amounts)
Colorado assesses the following filing fees for these required filings:
- Statement of Foreign Entity Authority (foreign qualification – one-time filing fee): $100
- Periodic Report (annual filing fee): $25
In practical terms, organizations should treat Colorado charitable solicitation compliance as a two-part filing process: obtain (and maintain) foreign qualification first (including maintaining a registered agent in the state), then proceed with charitable solicitation registration or renewal. Organizations registered to solicit in Colorado should review their current compliance status in the state and be prepared to meet any additional foreign qualification requirements to remain compliant.
