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Starting an LLC in Colorado

A limited liability company (LLC) is a business entity that shields owners from personal liability for business debt, offers pass-through taxation, and provides a more flexible management structure than a corporation. To start an LLC in Colorado, you must submit the Articles of Organization to the Secretary of State with a $1 filing fee. However, you’ll first need to choose a name for your LLC and appoint a registered agent. In Colorado, you can only file Articles of Organization online, and the state will process your forms the same day. Here, we'll take you through the steps you needed to get your LLC ready for business.

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1. Name Your LLC

First things first—your LLC needs a name. Colorado’s rules for naming LLCs are detailed in CO Rev Stat §7-90-601. You must be sure your LLC name:

  • contains the words “limited liability company” or an abbreviation such as “LLC.”
  • Hasn’t already been taken by another business in Colorado.
  • Doesn’t include words or abbreviations that make it sound like a different entity type, such as “corp” or “partnership.”

Already have a business name? Check to see if it’s available.

Can I reserve a business name in Colorado?

Yes. If you aren’t ready to start your LLC yet, you can reserve your business name for up to 120 days by filing a Statement of Reservation of a Name with the Colorado Secretary of State (online only) and paying the $25 filing fee.

What’s the difference between my LLC’s name and a trade name?

Your LLC’s legal name is the one listed on your Articles of Organization.

A trade name is any name other than your LLC’s legal name (or your own legal name, if you’re operating a sole proprietorship) under which you do business.

If you’re going to use a trade name, you’ll need to file the Statement of Trade Name with the Colorado Secretary of State and pay the $20 fee.

2. Designate a Registered Agent

All Colorado LLCs are required to appoint a registered agent. Your registered agent could be you, another individual, or a registered agent company that is authorized to receive service of process (lawsuits and other legal documents) on behalf of your business. Your registered agent’s name and address will need to be included on the Articles of Organization.

Learn why the pros hire a registered agent service.

What does a registered agent do?

Colorado’s rules for registered agents are covered in CO Rev Stat § 7-90-701. A Colorado registered agent can provide a range of services, but at minimum, your registered agent must:

  • Maintain a physical address in Colorado.
  • Be available at that address during regular business hours.
  • Accept legal and state mail for your business and forward it to you right away.

Can you be your own registered agent in Colorado?

Yes. As long as you’re willing to make your name and address public, you can serve as your own registered agent in Colorado. You will need to maintain regular business hours and be available to accept legal mail in person during these hours.

Can I change my registered agent after I start an LLC?

Yes. To change your registered agent in Colorado, you will need to file a Statement of Change Changing the Registered Agent Information. To do this, you’ll first need to find your business using the Record Identification or ID Search. Once you select your business, you’ll be taken to the appropriate form. There is a $10 filing fee.

3. Submit LLC Articles of Organization

To formally start your LLC, you’ll need to file the Articles of Organization. In Colorado, you are required to submit your Articles electronically, through the Colorado Secretary of State website.

Note: All of the information on this form will become part of the public record.

To complete the Articles, you’ll need the following information about your LLC:

  • Company name. Include “limited liability company,” “LLC,” or “L.L.C.”
  • Principal Office Address. Must be a physical street address.
  • Mailing address. P.O. boxes are allowed.
  • Registered agent. Whoever will accept legal mail in person on behalf of your business.
  • Registered agent address. Must be a Colorado street address.
  • Registered agent consent. Confirm that your registered agent has agreed to be your agent.
  • Management structure. Whether your LLC will be managed by members or managers.
  • At least one member. Check the box to confirm  your LLC has at least one member.
  • Optional provisions. Add anything extra here. For example: a list of your members’ names.
  • Delayed effective date (optional). If you want, add a future start day for your LLC.

Ready to start your Colorado LLC Articles of Organization? File for free with Northwest.

How can I keep my personal information off the public record?

The names and addresses on the Articles of Organization become part of the public record—meaning that if you put your home address on this form, customers, marketing firms, and anyone else could find this information online.

The best way to keep your personal information private is to hire a registered agent company that will put their address on public forms instead of yours—like us.

What’s the difference between a member-managed and manager-managed LLC?

In a member-managed LLC, all LLC members share the responsibility of managing the business. In a manager-managed LLC, a manager manages the LLC. The manager can be an outside person hired by the members or one or more of the members themselves (as long as they’re compensated). The person or people who manage your LLC will have the power to make decisions, such as to enter contracts, hire and fire employees, and open bank accounts.

For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.

How do I file the Colorado Articles of Organization?

In Colorado, there’s only one way to submit the Articles of Organization to the Colorado Secretary of State: online.

 

4. Write an LLC Operating Agreement

An operating agreement explains how your LLC will function in important situations. It should cover how much each member contributed, how profits and losses will be allocated, how you’ll conduct votes, how membership can be transferred, and how you’ll dissolve the business, if you ever need to.

Check out our attorney-drafted Colorado LLC Operating Agreement.

Does Colorado require an LLC to have an operating agreement?

No, you aren’t legally required to have an operating agreement in Colorado. According to CO Revised Statute § 7-80-108, an LLC “may” enter into an operating agreement, but there is no law stating they must.

However, operating agreements are essential documents for LLCs. Because they’re internal documents, you don’t need to file your operating agreement with the Colorado Secretary of State. However, in the absence of an operating agreement, your LLC will be governed by Colorado’s default LLC laws.

What should be included in an operating agreement?

Your operating agreement is the legal blueprint for your LLC. It should cover every major situation that your LLC is likely to encounter—from the allocation of profits and losses to dissolution. Here are some common subjects most operating agreements address:

  • initial investments
  • profits, losses, and distributions
  • transfers of membership interest
  • voting rights and decision-making powers
  • management
  • dissolution

You can  include other topics in your operating agreement as well—just as long as they don’t contradict your Articles of Organization or violate Colorado law.

Does a single-member LLC need an operating agreement?

Yes. A single-member LLC won’t need to resolve internal disputes, but they still need an operating agreement to open a bank account and maintain their limited liability status.

5. Get an EIN

An EIN (employer identification number) is the number the IRS will use to identify your business on tax filings. It’s similar to a social security number, but for businesses. You can get an EIN directly from the IRS for free, either on the IRS website (the fastest way) or by mail. If you don’t have a social security number, you’ll need to mail in the paper form.

Learn How to get an EIN for your LLC.

Do I need an EIN for my Colorado LLC?

Yes. While you’re only legally required to have an EIN if your LLC has employees or is taxed as a corporation, an EIN is required to open a business bank account. Plus, your EIN protects you from having to give out your social security number.

What To Do After Forming Your Colorado LLC

6. Open a Bank Account

Once your LLC is official, you need to set up a business bank account. Keeping your business finances separate is crucial for maintaining limited liability status. If you mix personal and company money, a court could decide your LLC isn’t a distinct legal entity—and you could lose your limited liability protection.

When you go to open your Colorado LLC bank account, here’s what you need to bring to the bank:

  • Colorado LLC Articles of Organization
  • an operating agreement
  • your LLC’s EIN
  • an LLC Resolution to Open a Bank Account (for LLCs with more than one member).

If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.

7. Fund the LLC

Your LLC is official, and your bank account is open. Now your business needs funds! Each LLC member should contribute an initial amount to the LLC to pay for their membership interest. Most of the time, members contribute by writing a check to the business bank account. However, members could contribute in the form of property or services to the LLC. Keep in mind that investments in the form of property or services are likely to cause a tax event.

What is LLC membership interest?

Membership interest is each member’s ownership stake of the LLC. In most cases, the amount you contributed to the LLC’s initial funds is directly correlated with your membership interest in the business. For example, if you contributed $6,000 to the LLC, and four other people contributed $1,000 each, you would own 60% of the business, and the other four people would each own 10%. Often, members’ voting power is weighted by how large their membership interest is.

8. File State Reports & Taxes

Colorado LLCs must file an annual report, which in Colorado is called the Periodic Report, every year. The purpose of the annual report is to give the government up-to-date contact information for your business and let them know if the business has changed ownership. Fortunately, Colorado has a low annual report fee: only $10.

Tired of paperwork? Let us file your annual report for you.

When is the Colorado Annual Report due?

The Colorado annual report is due during the anniversary month in which the LLC was filed. So if you filed your LLC on August 3rd, your annual report would be due by August 31st the following year.

How are Colorado LLCs taxed?

By default, Colorado LLCs are taxed as pass-through entities. That means that the business itself is not taxed, and the profits “pass through” the business to the members, who are taxed individually on the money they earned through the business. A Colorado LLC’s profits are taxed according to the federal self-employment tax rate, which is 15.3%. An LLC can also file with the IRS to be taxed as an S-Corp or a C-Corp.

Learn more about S-Corp Vs LLC tax designation.

Ready to Start an LLC in Colorado?