How to form an LLC in Colorado

A limited liability corporation (LLC) provides liability protection and tax savings for small enterprises, among other perks. If an LLC is the perfect company structure for you, take these steps to form one in Colorado.

Note that you have the option of forming the limited liability company (LLC) yourself, or you may work with a reputable company incorporation agency to do all of the legwork on your behalf.

1. LLC naming for your Colorado business

When choosing a name for a limited liability company (LLC) in the state of Colorado, there are two primary rules that must be followed:

• It is required that the name of your limited liability company be distinct from any other business organizations that are incorporated with the Colorado Secretary of State.
• You are obliged to include one of the following terms or abbreviations in the name of your limited liability company (LLC): “Limited Liability Company,” “Limited Company,” “limited,” “LLC,” “L.L.C.,” “L.C.,” or “LC.” You may alternatively replace “Company” with “Co.” and “Limited” with “Ltd.” in this sentence.

Make a name reservation for your limited liability company with the State’s Secretary.

When you have decided on a name for your limited liability company (LLC), you can then reserve that name with the Colorado Secretary of State. First, use the company name database maintained by the Colorado Secretary of State to determine whether or not the name in question is already in use.

As soon as it is established that the name in question is available, a Statement of Reservation of Name should be submitted to the Colorado Secretary of State in order to secure the name for a period of up to one hundred and twenty days. The application may be submitted online, and the cost to do so is $25.

2. Choose a registered agent in the state of Colorado

A registered agent in Colorado is required of every limited liability company operating in the state. If the limited liability company (LLC) is taken to court, this refers to a person or company that has agreed to accept service of process on its behalf.

The Registered Agent might be a resident of Colorado or a corporate entity that is permitted to conduct operations in the state of Colorado. It is required that the Registered Agent have a real, physical address in the state of Colorado.

What’s a Registered Agent?

A Registered Agent receives tax forms, legal paperwork, lawsuit notices, and formal government communication for your firm. Consider the role of your registered agent as that of the point of contact for your company with the state.

Who serves as Registered Agents?

A Registered Agent in the state of Colorado must either be an individual who resides in Colorado on a permanent basis or a company that is permitted to carry out business in the state of Colorado, such as a Registered Agent service. You have the option of selecting anybody who works for the organization, including yourself.

3. Publish your company’s articles of incorporation.

Your limited liability company (LLC) will be formally recognized after you have a document called the Articles of Organization that lays forth fundamental information about your business. Because this form serves as the legal registration for your company with the state, it is essential that all of the details be accurate.

What should be included in a company’s Articles of Organization?

When completing the Articles of Organization for your Colorado LLC, you are required to give the following information:

• LLC’s name
• If the term of the LLC is permanent or restricted.
• Address of the main office of the limited liability company Name and address of the registered agent for the limited liability company
• Location where the Secretary of State should send notifications to the limited liability company (LLC) through mail.
• How the Limited Liability Company (LLC) will be run: by its members or by its managers
• Whether or whether the limited liability company can provide professional services
• The names and addresses of each person who was involved in forming the limited liability company (LLC), as well as the names and addresses of at least one member or management who had direct knowledge of the LLC’s activities, must be provided.

Filing of Your Organization’s Articles of Incorporation

You may now formally establish a limited liability company in the state of Colorado by submitting Articles of Organization using the online system of the Colorado Secretary of State. The filing cost is fifty dollars.

Foreign limited liability companies, often known as LLCs that were founded in a different state but want to do business in Colorado, are required to file paperwork with the Colorado Secretary of State’s office and pay a filing fee of one hundred dollars.

4. Obtain a Certificate For Your State

After the formation paperwork of the LLC has been submitted and authorized, the state will send you a document that proves the LLC’s official existence in response to a written request for a copy together with the appropriate amount of postage.

With this certificate, the limited liability company will be able to get an Employer Identification Number (EIN), as well as business permits and business bank accounts such as Novo or Bluevine accounts.

5. Create a Business Operations Contract

Even while establishing a complete LLC memorandum of understanding is not a legally required stage in the process of incorporating a limited liability company in the state of Colorado, it is highly suggested for all new limited liability firms.

The following items should be included in the operating agreement:

• Describe the business structure of the limited liability company.
• Determine the specific duties and commitments that each member of the limited liability company (LLC) has, and lay out the operational structure of the LLC.

Without an operating agreement that specifies the roles and obligations of the LLC’s participants, the firm may face serious legal and operational hurdles.

6. Obtain an employer EIN

A federal employer identification number, commonly known as a tax ID number, will be required of many limited liability companies (LLCs). An Employer Identification Number (EIN) is a nine-digit number that identifies your company to the Internal Revenue Service. 

You need an EIN in order to pay federal employer taxes, open a bank account (in most situations), or recruit staff. On the website of the Internal Revenue Service (IRS), which is accessible without charge, you may check to see whether you need an EIN and submit an application for one online. 

Single-member limited liability companies, which are an exemption to the rule that most firms are required to acquire an EIN, may instead use the owner’s Social Security number.

Business Licenses and permits

Depending on the nature of their operations and where they are located, some limited liability companies (LLCs) doing business in the state of Colorado may be needed to get one or more business licenses or permits from the state or from their respective municipal governments.

Have a look at Colorado’s Start a Business Guide, which is made available by the Secretary of State, in order to get information on how to satisfy the criteria for obtaining a state business license. The Colorado License Directory allows users to search for specific licenses that they need.

Contact the municipal or county clerk where your LLC is situated for local licensing requirements.

7. Filing of your Company’s Annual Report

Annually, Colorado limited liability companies are required to submit a Periodic Report to the Colorado Secretary of State. The report has to be submitted digitally on the website of the Secretary of State, and the charge to do so is ten dollars.

Periodic reports are expected three months after the LLC’s formation month.

For instance, if you founded your single-member limited liability company (LLC) on June 15, the report would be required each year between June 1st – Aug 31st from that point on. You also have the option of filing the report a maximum of two months earlier than required.

What are the costs and the next step?

Costs

The filing of the Articles of Organization with the Colorado Secretary of State is $50, and the cost to reserve a name for your limited liability company (LLC) with the Colorado Secretary of State is $25.

Consider the following additional fees that may be incurred by an LLC:

• Name reservation for an LLC: $100 dollars 
• “Doing Business As”: $50 dollars 
• Certified document copies: $15 dollars 
• Certificate of existence: $1 dollar

Next Steps

When you register a limited liability company (LLC), you establish a legal basis upon which to operate your firm. Companies should make it a priority to maintain their limited liability company in compliance with state regulations and in an active position on the state’s website.

In addition, having a registered limited liability company enables you to perform the following:

• Register your company with the department of revenue in your state.
• Create a checking account for your company.
• Create a credit card account for your company.
• Obtain any permissions or licenses required to run your company, such as those issued by the health department, the zoning department, the department of home occupations, the department of professional licensing, and others. Some states need a seller’s permission to conduct sales
• Invest in insurance coverage for your company.
• Create a trademark to protect both your company’s name and its logo.

LLC setup yourself or use an incorporation agency?

To establish a limited liability company (LLC), you are not required by law to consult a lawyer. The majority of states enable the establishment of LLCs via the process of registering the business entity on the website of the secretary of state and with the Internal Revenue Service (IRS).

If you are not acquainted with the process of forming an LLC, your best bet may be to hire a professional LLC provider so that you can be certain that the creation will go smoothly and quickly.

When entrepreneurs start a new firm, they may save startup costs and save valuable time by using a professional agency that specializes in company formings. 

They can take care of the things that you may not have time to think about for a price ranging from $50 to over $500, and some examples of such things are as follows:

• Developing an operating agreement for an LLC that details your company’s main details and putting it into writing (required in some states).
• Putting together articles of incorporation that identify the management of the LLC, the registration agent, and the date the company was formed.
• Taking up the role of registered agent for your firm.
• Keeping careful records in the event that there are investigations or litigation.
• Payment of filing fees and registration with the appropriate parties.
• Registering the name of your firm and ensuring that the name you choose for your limited liability company is accessible.
• Finishing up and turning in all of the necessary legal and formation documentation.

FAQs