A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in Colorado. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under Colorado law, an LLC must contain the words or abbreviation “limited liability company,” “ltd. liability company,” “limited liability co.,” “ltd. liability co.,” “limited,” “l.l.c.,” “llc” or “ltd.,”Limited Liability Company," "Limited Company," or the abbreviation "L.L.C.," "L.C.," "LLC," or "LC." The word "Limited" may be abbreviated as "Ltd.," and "Company" may be abbreviated as "Co."
Your LLC’s name must be distinguishable from the names of other business entities already on file with the Colorado Secretary of State. Names may be checked for availability by searching the Colorado Secretary of State business name database.
An available name may be reserved for 120 days by filing a Statement of Reservation of Name with the Colorado Secretary of State. The form must be filed online at the Secretary of State website. The filing fee is $25.
Every Colorado LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The agent should agree to accept service of process on behalf of the limited liability company prior to designation. The registered agent may be (1) an individual who is a full-time resident of Colorado, (2) a Colorado business entity with its principal place of business in Colorado, or (3) a foreign entity authorized to do business in Colorado and that has a usual place of business in the state.
A Colorado LLC is created by filing articles of organization with the Colorado Secretary of State. You can view and download a sample articles of organization form on the Secretary of State’s website.
The articles must include:
The articles of organization must be filed online and the filing fee is $50.
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
An LLC operating agreement is not required in Colorado, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo). If an operating agreement is created, it need not be filed with the Articles of Organization.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Register with Department of Revenue: In some cases, for example if you will be selling goods and collecting sales tax or if you have employees, you’ll need to register with the Colorado Department of Revenue (DOR). For more information on state LLC tax registration, see Nolo's article LLC Annual Filing Requirements in Colorado.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the city in which the business is located (or county if you are in an unincorporated area). For state licenses, check with the Colorado Department of Regulatory Agencies.
Colorado LLCs must file a Periodic Report with the Colorado Secretary of State each year. The report must be filed online at the Secretary of State website. The filing fee is $10. The periodic reports are due during the three month period beginning on the first day of the anniversary month of the month when the LLC was formed. For example, if you formed your SMLLC on June 15, the report would be due each subsequent year between June 1 and August 31. You can also file the report up two months early. You may sign-up for email notification from the Secretary of State to alert you when the Periodic Report is due. For more information, see Colorado LLC Annual Report and Tax Requirements.
All LLCs organized outside of Colorado must register with the Colorado Secretary of State to do business in Colorado. Foreign LLCs must appoint a registered agent for service of process physically located in Colorado. To register, file a Statement of Foreign Entity Authority. The application may must be filed online. The filing fee is $100.
Before filing, make sure the LLC’s name is available in Colorado by checking the Colorado Secretary of State’s business name database. If the name is not available, the LLC must provide an assumed entity name for use in Colorado.