State officials can flag suspected fraudulent business filings

If payment fails, the Secretary of State may void the filing document or remove it from the online system. This applies to documents submitted to the Secretary of State for filing. A document is not successfully filed if payment fails, including when an electronic payment is reversed, even if the document was initially stamped with a date or time.

The Secretary of State may flag or edit records and limit further filing functions when there is a reasonable basis to believe a record is fraudulent or unauthorized. These powers concern business records the Secretary of State believes are fraudulent or unauthorized based on an answer to, or failure to answer, an official questionnaire. A reasonable basis means information reasonably showing that a filing violated the law against fraudulent filings. Examples include similar names or addresses, matching activity patterns, or linked electronic identifiers. A person affected may ask the Secretary of State to reverse the action and must provide evidence of an error. If the request is denied, that person may seek review in Denver District Court.

The Secretary of State must refer qualifying complaints to the Attorney General, who reviews them and may investigate; a person injured by a violation may ask a court to dissolve the entity. These provisions cover complaints about prohibited filings with the Secretary of State and entities alleged to have violated those rules. Prohibited conduct includes using a fraudulent entity as a registered agent, filing an address without the owner’s or occupant’s consent, and delivering an entity document without proper written consent or authority. If the Attorney General investigates, the Attorney General must send written notice and a demand to the registered agent’s listed street or mailing address and available email. If that address matches the complainant’s, notice may go to another contact found through investigation; telephone contact is allowed if a number is available. A court may dissolve an entity if an injured person brings an action and the court finds the entity obtained its formation papers through fraud or continued to exceed or abuse its legal authority. The law applies to complaints filed on or after its effective date. It takes effect August 12, 2026, if the General Assembly adjourns on May 13, 2026; a timely referendum petition could require voter approval before it takes effect.

The act provides $193,954 to the Department of State for staff and operating costs. The Department may use the money for its business and licensing and information technology divisions. The money comes from the Department of State cash fund and is for the 2026–27 state fiscal year. The appropriation is for the 2026–27 state fiscal year.