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Don't incorporate in Colorado (unless you know what you're doing)

invisibletardigrade

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Dec 1, 2020
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Hi folks,
I'm not sure if this question belongs into the “incorporations” or the “banking” section.
I'm director of an entity that is entirely managed from Europe but incorporated in Colorado.

I thoroughly compared my choices for incorporation before I incorporated... Or at least, I thought.
Problem is: I ran into two pitfalls that I only discovered after paying the registered agent.

Pitfall #1: Registered agent is two entities

The first mistake I made was to proceed straight to the incorporation process after signing up for the registered agent. My thought was “well, I have a registered agent, so I can incorporate now.” I took the office address from the registered agent website and put it in the incorporation document, thinking all was fine. Only after submitting the form, I found an email telling me that my registered agent has some kind of resale or whatever arrangement where the entity that sells the registered agent service to customers is separate from the entity that acts as registered agent vis-à-vis third parties. So the registered agent name I put in the document was wrong.

Fortunately, my credit card payment was declined in the first attempt, so I was able to notice the error before SOS billed me.

However, that brings us to...

Pitfall #2: Credit cards must be issued in the US, support address verification and have a US billing address

The next pitfall I ran into was the way how the Colorado Secretary of State handles payments: There are only two payment methods available. These are 1) Credit cards and 2) frequent filer accounts. A frequent filer account is out of the question for me as I'm not a frequent filer. So for me, the only option is credit card, and this is where it gets awkward. SOS requires that credit cards must be 1) issued in the US, 2) have a US billing address and 3) support address verification. Problem is: All of my credit cards are based over here in Europe. No US billing address, no US-issued card and no support for address verification. SOS is enforcing these requirements strictly. If you try to use an unsupported card anyway, they will refuse to take your money and reject the incorporation. But they will still place a pre-authorization on your card, preventing you from spending the money otherwise. I retried until my entire credit line was used up by all the pre-authorizations. I eventually got the money “back” (well, technically, it wasn't gone) but to complete the incorporation process, I had to actually hire someone via ebay to walk into a retailer in the US and buy me a $50 Visa gift card and ship it to me. Once received, the payment first failed again because I had forgotten to register the gift card to a fake US address. Once I had the registration complete and waited for another week (there was a pre-authorization blocking the gift card now), I was able to incorporate.

Now the problem is that the credit card thing continues to haunt me. My annual report is due shortly and I still don't have an SOS-approved payment instrument for the filing fee. At first I thought I'd simply buy another gift card online but several options I tried failed to work. I tried to buy a gift card from Target, pay with my credit card and have it shipped to a CMRA address. What happened? Target declined my order. I tried ordering a card on ebay and have it shipped to my home across the pond. No success, item lost in transit after 6 weeks of waiting and I'm still waiting to get my money back.

Does anybody have any advice what I should do in this situation? I'm running out of options. Only thing I can do is trying to buy another card on ebay and hope it arrives in time.
 
This all sounds like it can be (and could have been) avoided by working with a better registered agent and let them handle the whole process. They will pay the SOS and take care of all the paperwork for you.

That might still be an option for you.

Getting a US card is going to be difficult. Do you know anyone who has one and could pay for you?
 
Sols: Thank you for reminding about this. Actually, my registered agent offers the option to make the filing on my behalf. However, they would charge their own fee which is 10x (ten times) the SOS fee which is why I forgot about this option. It feels like a rip-off. If charging a 1000% surcharge on top of the SOS fee is the market price for a filing service, I could open my own filing service which charges only 6x the SOS fee.
 
I don't want to sound rude or something but... Do you care about your time? I have incorporated in the US many times with only less than $150 (state fees included, in Colorado will be only $300) and yeah my registered agents are resellers but they do everything in less than 24hrs and without asking me anything relevant, without reveling my data and everything is ready and paid for a year.

To me that's worth it since my time worths a lot more than paying 10x the real price
 
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