How to Start an LLC in Colorado
To start an LLC in Colorado you must file Articles of Organization with the Colorado Secretary of State, pay a $50 filing fee, and get an EIN from the IRS. The complete steps to forming a Colorado LLC are as follows:
- File Colorado Articles of Organization online
- Pay the Colorado Secretary of State $50
- Receive approval of your Articles in your email
- Get a Federal EIN tax ID for the LLC
- Create a Colorado LLC Operating Agreement
- Take these documents to the bank and get a Colorado LLC bank account
Free PDF Download
Colorado LLC Articles of Organization free download. This is a sample PDF, all Colorado LLC's must be formed online.
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How to File Colorado LLC Articles of OrganizationTo form a Colorado LLC, you file the LLC Articles of Organization in the following steps:
What is the Cost of a Colorado LLC?
The Colorado Secretary of State charges a $50 filing fee for Colorado LLCs. Hire Northwest and your total out-the-door cost is $275, including state filing fees.
How much does an LLC in Colorado cost each year?
There’s an annual fee of $10 to submit the Colorado LLC Periodic Report.
What are the Colorado LLC taxes?
The Colorado personal net income tax rate is a flat rate of 4.63%.
The state sales tax is only 2.9%, but cities and counties add on sales taxes of their own, making the total sales tax much higher. For example, in Colorado Springs, the total sales tax comes out to 8.25%, and in Denver it’s 7.65%.
Is a Colorado LLC Registered Agent Required?
Yes, Colorado state statutes require LLCs to appoint a registered agent. You don’t have to hire someone. You could do it yourself—but know that you’d have to publicly list a physical address (no PO Boxes) that would become part of the permanent record of your Colorado LLC. You’d also have to be available at that address during business hours to accept legal notices. Not keen on publicly listing your address or being tied to the office? When you hire Northwest, you can list our address instead of your own and free yourself up to focus on your business. (Or you know, go skiing.)
Colorado LLC Versus Colorado Corporation:
When it comes to fees, Colorado corporations and LLCs are pretty evenly matched. The filing fee for forming either a corporation or LLC is $50. Both business entities submit a Periodic Report each year along with a $10 fee. Tax obligations can often be the same as well—LLCs, for example, can elect to be taxed as S or C corporations, so there’s no real tax advantage or disadvantage tied to the entity type you choose. Really, the business type you choose isn’t especially significant in Colorado. The biggest difference between LLCs and corporations is how they operate. LLCs are a little more flexible—members can manage themselves without the directors or officers required for corporations. Considering a corporation? Here is information on Colorado incorporation.
Do I Need a Tax ID Number (EIN) for a Colorado LLC?
You will need a federal tax ID if you want to hire employees or if you require special tax filings (like Alcohol/Tobacco/Firearms returns). Most banks ask for your EIN when you go to open a business bank account. Vendors will also ask for your EIN when you go to open a line of credit. Applying for a business loan? Same story. Even local licensing and tax forms typically request your EIN. Sometimes you’ll have the option of using your EIN instead of your personal social security number—and the less often you have to hand out your SS# to strangers the better. The IRS doesn’t charge a fee for issuing an EIN, so why not get one? Don’t want to fill out the paperwork? Add on EIN service when you hire Northwest.
Does a Colorado LLC Need a Business License?
Most likely—although whether or not you need a business license depends on where in Colorado your business is registered. Colorado itself doesn’t issue business licenses, but many cities and counties do. For example, Aspen requires a business license (which ranges from $150-$750) that must be renewed yearly.
Colorado may not issue business licenses, but there are state tax licenses you may need to apply for, like the sales tax license issued by the Department of Revenue. Colorado also regulates a wide variety of industries. The Department of Regulatory Agenciesrequires professional licenses for everything from accountants to mixed martial arts officials. So, considering that Colorado requires a license just to run a fantasy football contest (seriously), double check whether your LLC needs a professional license, no matter how unlikely it may seem.
What is a Colorado LLC Periodic Report?
The Periodic Report updates the state of Colorado with your ownership and contact information. You’re required to submit the form online each year and pay a $10 fee. Pay an additional $50 if it’s late. Your due date is based on when you first registered your LLC, so it’s pretty easy to forget (particularly since the Secretary of State doesn’t mail out reminders). It’s not uncommon for LLCs to end up unnecessarily paying $60 a year for this report. At Northwest, we keep track of your report due dates and send you reminders to file.
Colorado LLC Articles of Organization Requirements
You must include “Limited Liability Company” or an abbreviation like “LLC” in your name, and you can’t pick a name already in use.
Your principal office has to be a street address (no PO Boxes). Note that any address you put in your Articles of Organization becomes a permanent part of the public record—hire us and you can use our address.
You can list either an individual or a business that provides registered agent service (like Northwest).
This is the address where legal notifications are delivered. It has to be a Colorado street address. Have we said yet that if you hire us, you can use our address?
Name and Address of Person Forming the LLC
This is a really strange way of asking “who is filling out the form?” Especially since it doesn’t even have to be a person; it can be a business, like Northwest. If you’re going to list yourself, at the very least use a PO Box or a business address and avoid making your personal address part of the public record. Even better, hire us and list our information.
You can choose to have members manage the LLC themselves, or you can have one or more managers run the show. Basically, it’s all about who gets to make decisions. Most small LLCs are member-managed. However, if you want to retain ownership interest but don’t actually want to run day-to-day operations, you can hire or appoint managers.
Delayed Effective Date
Most Colorado LLCs begin existence the moment they’re approved by the Colorado Secretary of State. Want to a wait a bit (maybe until the next tax year starts)? You can choose a future date for your business to start as long as it’s within 90 days of filing.
Individual Causing Delivery
This is another unnecessarily weird phrasing. Basically, Colorado wants to know who’s actually delivering the form. Odds are—since all filings are submitted online—it’s going to be the same person that is forming the LLC. There’s not exactly a lot of time between filling out the form and clicking “submit.” Really, what it boils down to is that the state wants to make sure a real person’s name is listed in your Articles—but it doesn’t have to be yours. Maintain your privacy when you hire Northwest; we’ll put our information here as well.