How to Form a Single-Member LLC in Colorado

If you're a solo business owner, you can register to become a single-member limited liability company (SMLLC) in Colorado. The formation process for an SMLLC is generally the same as the process for a multi-member limited liability company (LLC). You can find the rules and procedures for forming an LLC in Colorado's Limited Liability Company Act.

While your situation might differ slightly, you can generally follow the steps below to form your Colorado SMLLC.

1. Name Your SMLLC

Under Colorado law, the name of an LLC (including an SMLLC) must contain one of the following terms or abbreviations:

• "limited liability company"
• "ltd. liability company"
• "limited liability co."
• "ltd. liability co."
• "limited"
• "L.L.C."
• "LLC," or
• "Ltd."

In addition, your SMLLC's name must be distinguishable from any other entity name that's registered or reserved with the Colorado Secretary of State (SOS). (Colo. Rev. Stat. § 7-90-601 (2023).)

Check to make sure the name you want is available by searching the SOS's business database on the SOS website. You can also reserve a name for 120 days by filing a statement of reservation of name online. Just type in the name you want to reserve and continue to the next step to complete the online application. As of 2023, the filing fee is $25 to reserve a business name.

2. File Articles of Organization

You create a Colorado SMLLC by filing articles of organization with the SOS. To complete the articles you'll need to provide:

• the name of your SMLLC
• the street addresses of your SMLLC's initial principal office
• the name and address of the SMLLC's registered agent
• the name and mailing address of the person forming the SMLLC (you)
• an indication of whether the SMLLC will be member-managed or manager-managed, and
• a statement that there's at least one member of the new SMLLC.

(Colo. Rev. Stat. § 7-80-204 (2023).)

The articles of organization must be filed online with the SOS. The SOS provides a helpful checklist and separate instructions to help you complete your articles filing.

Every Colorado SMLLC must have a registered agent. A registered agent is an individual or business that agrees to accept legal papers on behalf of the SMLLC. The registered agent can be:

• an individual Colorado resident who's at least eighteen years old
• a domestic business entity with a usual place of business in Colorado, or
• a foreign business entity authorized to do business, and with a usual place of business, in Colorado.

The registered agent must have a physical street address in Colorado.

All of the paperwork and procedural steps to start an SMLLC in Colorado can be done online using our online LLC formation application.

3. Prepare an Operating Agreement

Colorado doesn't require LLCs to have an operating agreement. Even though it's not required, it's beneficial to have one. Having an agreement in place is a good way to help separate your business from you personally, therefore limiting your liability. It also can be useful with lenders and other businesses when entering into business transactions.

Your operating agreement will be made between you (the SMLLC member) and the business itself. Your agreement should cover the member's rights, duties, and obligations, as well as the SMLLC's management structure. Your SMLLC can operate as a member-managed LLC (managed by its members) or as a manager-managed LLC (managed by a manager). If you choose to have a manager-managed SMLLC, then you or someone outside the SMLLC (a nonmember) can act as the manager.

For more information and help with creating an SMLLC operating agreement, see Nolo's Guide to Single-Member LLCs, by David M. Steingold (Nolo).

4. Do You Need an EIN?

An SMLLC's default tax status is that of a disregarded entity (same as a sole proprietorship). Because LLCs have flexible tax structures, you can choose to have your SMLLC taxed as a corporation instead. However, if you choose to keep your default tax status as a disregarded entity and your business doesn't have employees, then you don't need to obtain a federal employer identification number (EIN). In that case, you can use your Social Security number and report your business's profits and losses on your personal tax return.

You must obtain an EIN if either of the following is true:

• you elect to have your SMLLC taxed as a corporation, or
• you have employees.

Complete the IRS's online application on its website to get your EIN. There's no filing fee.

In many cases, it makes sense to get an EIN for your SMLLC even if it's not required for federal tax purposes. Banks often require a business an EIN to open an account in the business's name and other companies you do business with might require an EIN to process payments.

5. Register With the Department of Revenue

In some cases—for instance, if you'll be selling goods and collecting sales tax or if you have employees—you'll need to register with the Colorado Department of Revenue (DOR). You can register your business either online through Revenue Online or through the mail by completing and submitting Form CR 0100. You'll need to provide basic information about your business to register.

For more on tax registration requirements, see our article on LLC annual report and tax filing requirements in Colorado.

6. Obtain Business Licenses

Depending on what kind of business you're running and where it's located, you could need to obtain local or state business licenses, permits, and registrations for your SMLLC. Among other possibilities, these might include licenses, permits, or registrations related to:

• your profession or occupation
• specific goods or services you'll sell or provide
• an assumed or fictitious name for your business, and
• health and safety matters.

For more, see our article about getting a small business license in Colorado.

7. File Your Annual (Periodic) Report

The State of Colorado requires you to file a periodic report annually for your SMLLC. File the report online at the SOS website. As of 2023, the filing fee is $10. There's also a $50 penalty fee for reports filed late.

The report is due during the three-month period starting with the first day of the anniversary month of your SMLLC's formation. For example, if you formed your SMLLC on April 15, the report would be due each subsequent year between April 1 and June 30. You can also file the report up to two months early.

Getting Help Forming Your SMLLC in Colorado

The process to register your SMLLC in Colorado is fairly straightforward. Most of your filings will be submitted to the SOS and DOR. Many business owners can complete the business registration process themselves. But if you're in a highly regulated industry or have questions specific to your business, speak with a Colorado business attorney. A lawyer can help you file your formation paperwork, create your operating agreement, and register for business taxes.

For more information on how to form and run your SMLLC, check the single-member LLC section of our website.