© 2023 All rights reserved
COLORADO COMPANIES: ARE THEY A GOOD CHOICE TO BUILD BUSINESS CREDIT? YES! THEY ARE GOOD CHOICE TO BUILD BUSINESS CREDIT.
THE SHELF COMPANY: A PIVOTAL MOVE FOR SUCCESS
- The competitive advantage in financing, leasing of equipment and real
estate, marketing and sales. - The universal attribute of any company is the age. There are many factors
that impact financing and marketing. The age of the company impacts the
company across the board. - Level the playing field with regional and local competitors who will use their
company age against you. - Bid on projects.
- Increase sales.
- Increase deposits and signed contracts.
- Meet your promises and build your business quickly.
- Don’t wait three years with a brand-new company to be considered stable.
Acquire an aged shelf company now and build on a foundation. - Start your business as you work full-time. Make the success transition to
running your business full-time faster and successfully.
HISTORY
AN IMPORTANT ISSUE IS THE HISTORY OF THE COMPANY & THE CHANGE OF CORPORATE OFFICERS
Let’s look at how and why the Colorado corporation is an excellent company to build business credit.
Lenders and their underwriters are concerned with the continuity of a company. Is the company that is applying for the loan have a continuity that seems normal and healthy? The answer is YES for Colorado corporations. The way the State of Colorado structures the information disclosure makes the Colorado companies an excellent choice for building business credit.
Lenders and their underwriters are concerned with the continuity of a company. Is the company that is applying for the loan have a continuity that seems normal and healthy? The answer is YES for Colorado corporations. The way the State of Colorado structures the information disclosure makes the Colorado companies an excellent choice for building business credit.
Let’s dissect this piece by piece.
1. The lender wants to see that the company (applicant for credit) is in good standing from the date of incorporation. The Colorado secretary of state shows the incorporation date and the complete filing history of the company. Lenders prefer transparency in the ease of access to these filings.
- The certificate of good standing is free from the Colorado Secretary of State. This makes it quick and easy to validate the company in good standing, and to obtain validation to open an account.
- Anyone may obtain the certificate of good standing with ease.
2. Colorado company annual reports don’t disclose the names of the corporate officer and the names of the owners. They only disclose the name of the person who filed the document. This is ideal for anyone acquiring an aged shelf company from Colorado to build business credit.
3. The lender wants to see a consistent story as to the identity of the corporate officer.
The corporate officer wasn’t revealed because the State of Colorado doesn’t request that information in the initial filing and the annual reports. Colorado doesn’t require disclosure of the corporate officers. When we transfer the company to the client, the corporate officer is finally declared. Since there was no corporate officer disclosed in the past, the new officer updated on the public record is considered the original corporate officer.
A change of corporate officer is not detected, since there was no one posted as corporate officer in the past. This is a big plus in using a Colorado corporation to build business credit. Upon selling the company to the client, the client’s name is posted on the public record and that same person is identified as the first and original owner. In this way, the Colorado corporation is just as effective as the Montana corporation and the New Mexico LLC in building business credit.
4.
The lender doesn’t care if the registered agent changed. They seek validation that the company is stable and trouble-free. This means that the company doesn’t carry back taxes, there’s no litigation, and there’s no other problem. The highly competitive environment of the available registered agents has resulted in low-cost registered agent services..
5. Is the company from a state where it is known to produce a great deal of shelf companies? Colorado is not a “shelf company state” because it doesn’t have a large line of incorporators selling aged shelf companies. Likewise, Montana and New Mexico are two other states that produce shelf companies that perform well in building business credit. All three states present good choices for the entrepreneur seeking to start a legitimate business with an aged entity.
A. If you’re intending to build business credit, stay away from the usual states that are known to produce shelf companies: Nevada and Delaware.
B. Most other states are not viable options because they require disclosure of the company owners. The States of TX, NY, CA, SC, NC, GA, IL, MI, OR, and most other states require disclosure of the owners. This means that the shift of ownership is detected from the seller to the buyer. That may reset the respected age of the company to zero. Therefore, one should acquire a company from a state whereby the owners are not disclosed. At this point, the best states are Montana, New Mexico and Colorado from which to obtain an aged shelf company.
i. Privacy is also available with a Colorado corporation if you’re seeking not to disclose the officers at all. This information doesn’t need to be disclosed.
ii. The owners and the officers aren’t required to be disclosed. This means that this information is private until chosen to be disclosed. We can disclose the officers with the Restated Articles of Incorporation. The Director and the Officer(s) of the company are revealed at the restatement, or the client may choose not to reveal this information.
1. Privacy is also available with a Colorado corporation if you’re seeking not to disclose the officers at all. This information doesn’t need to be disclosed.
2. In comparison, Wyoming requires disclosing the names of the Direction and the President when filing the annual report. Colorado doesn’t require disclosure of the officers when filing the annual report. As far as the annual report is concerned, Colorado provides more privacy from the public record than Wyoming.
3. When choosing the disclose the officers in the Colorado corporation, it works in the favor of the business owner to build business credit. The change of officers from the seller to the buyer isn’t detected. The seller is considered the first and original buyer of the Colorado corporation.
iii. Lenders prefer to see the Director and the Officer on the public record. Why? They seek to validate that the person signing the business credit application has the authority to open the account.
iv. Disclosing the names of the Director and the Officers isn’t required as part of the Colorado annual report. The disclosure is best handled through a Restatement of the Articles of Incorporation or other filing whereby the officers are disclosed. Lenders only seek to validate that the person signing the loan application for the company is on the public record with the Secretary of State.
C. The states that present the best choices for building business credit involving an aged shelf company are Colorado, Montana, New Mexico, and Wyoming. The State of Wyoming trails last of the four states when applying for business credit. Wyoming ranks last when ranking against Colorado, Montana, and New Mexico.
i. Wyoming is better for online businesses whereby business credit isn’t involved, and to maximize asset protection.
D. Which one is better out of Colorado, Montana, and New Mexico? Companies from Colorado, Montana and New Mexico are all on equal footing for the same reasons. All three states don’t ask for the owners of the company.
i.
Colorado carries a slight edge over Montana. The State of Montana annual report requires disclosure of the Director and President. Colorado doesn’t require this information. Montana grants access to this information only when paying a fee of $2. This paywall of only $2 reduces the requests to whatever is available freely online. The use of AI systems in lending practices don’t pay for the $2 to view the officers as reported to the Montana Secretary of State. Only when the lender would be willing to pay the $2 to view this information, is when Colorado has the edge. Colorado doesn’t collect this information in the first place but may be deliberately posted upon customer request.
E. The customer may be swayed to one state or another solely on the availability on the company name of the shelf entity. The answer may be the company name whose name best fits your project or industry. All three states produce good quality viable companies that build business credit well.
6. The Colorado annual report fee is $10.
A. The Montana company annual report fee is $20
B. Wyoming annual reports cost $60
C. New Mexico annual reports cost $0
7.
There is great competition among providers of registered agent services in Colorado, resulting in low fees as low as $35 in many cases. Likely, you’ll be filing the Colorado company into your state (foreign qualification). You must maintain the Colorado corporation in Colorado. With an annual report fee of $10 and a registered agent fee of about $35, that’s a great deal. The maintenance costs are low. This is great since you must also maintain the company in your state as well. After acquiring the Colorado shelf corporation, a change of registered agent is of low cost.
8. To maximize the business credit viability of the Colorado corporation, don’t use the address of the registered agent to forward mail. Rather, acquire a virtual or other office that’s not associated with the registered agent of the Colorado company.
9.
Colorado is known for industry, logistics, trucking, manufacturing, technology, warehousing, tourism, transportation, agriculture, and distribution, and many other industries. A Colorado corporation is an excellent option for a company to build business credit.
10. A Colorado corporation can be filed into any other state in foreign qualifying to do business in that state. The procedure involves filing the Colorado corporation into your state and filing for the business licenses on the county and municipal level.
11.
Lenders and their underwriters want to see consistent information across the entire bandwidth of sources. What does this mean for your business? The publicly disclosed information available at the Colorado Secretary of State must be consistent with the information disclosed when filing as a foreign entity in your state, and consistent with the information on the business licenses, and the information on the credit application. The consistent information is key to business credit success. Any company applying for credit must project a consistent story of the company address, the corporate officers, and other data, that matches the information on the business credit application.