Ready to form your Colorado LLC? Colorado offers a quick, affordable online filing process. Follow these steps:
1. Choose a Name for Your Colorado LLC
Pick a unique name that isn’t already in use by another business in Colorado. The name must include “Limited Liability Company,” “LLC,” or “L.L.C.” Search the Colorado Secretary of State’s business database to confirm availability. Colorado does not allow name reservation prior to filing (the name is secured once the LLC is formed), so be sure you have a distinct name you intend to use.
2. Appoint a Registered Agent in Colorado
Colorado requires an LLC to have a registered agent with a physical address in the state (PO boxes are not acceptable). The registered agent can be an individual Colorado resident or a business entity authorized to do business in Colorado that will accept legal papers on behalf of your LLC. You or someone in your company can serve as agent, but many choose a professional service for convenience and privacy.
3. File Articles of Organization
Colorado’s Articles of Organization must be filed online via the Secretary of State’s website (Colorado has one of the most user-friendly online filing systems). The filing fee is $50 (one of the lowest in the nation). You’ll need to provide your LLC’s name, the principal office address, the registered agent’s name and address, the name(s) and address(es) of the person forming the LLC (organizer), and if the LLC is member-managed or manager-managed. Once you submit and pay, approval is usually almost instant or within a day since it’s an automated system.
4. Prepare an Operating Agreement
Colorado doesn’t require an operating agreement, but having one is standard practice. This document, kept internally, will outline ownership percentages, profit/loss sharing, management structure, and procedures for things like adding members or dissolving the company. If you’re a one-person LLC, it helps demonstrate the separation between you and the business. For multi-member LLCs, it’s critical to preventing conflicts. You can find templates to use and tailor to your needs.
5. Get an EIN
Obtain an EIN from the IRS for your Colorado LLC. It’s free and can be done online in minutes. All multi-member LLCs need one for their partnership tax return. Single-member LLCs will use one if they have employees or to avoid using a personal SSN on business documents. In Colorado, if you plan to hire employees or open a business bank account, you’ll use the EIN.
6. Open a Business Bank Account
Open a bank account for the LLC to maintain the corporate veil (liability protection). Using your personal account for LLC finances can blur lines and potentially expose you to risk. Provide the bank with your Articles of Organization and EIN (and possibly operating agreement) to set up the account. Colorado has many local and national banks; some might even allow online account setup.
7. Understand Colorado Tax and Regulatory Obligations
Colorado itself has reasonable requirements:
- State Tax ID: If your LLC will sell goods or certain services, you’ll need to register for a Colorado Sales Tax License via the Department of Revenue. This can be done on their website (Colorado Revenue Online). Also register for wage withholding if you have employees.
- Unemployment Insurance: If you have employees, register with the Colorado Department of Labor and Employment for unemployment insurance.
- Business Licenses: The state of Colorado doesn’t have a general business license, but certain professions and local jurisdictions might. Check with your city or county for local licenses (for example, Denver has a general business license requirement for some businesses).
- Periodic Report: Colorado requires a simple Periodic Report to be filed annually for your LLC, with a $10 fee. The report is due within the 3-month window around your LLC’s anniversary of formation (can be filed starting two months before the month of formation until two months after). Mark your calendar or set an alert to file this on the Secretary of State website to keep your LLC in good standing.
Tip: You can streamline your Colorado LLC formation by using Registered Agents Inc. or another online service. For a small fee, they handle the filing, act as your registered agent if needed, and even remind you about the annual Periodic Report. Form your Colorado LLC with Registered Agents Inc. to save time and ensure accuracy.
Final Thoughts
Colorado makes it easy and affordable to start an LLC, with an efficient online system and low fees. Just make sure to keep up with that annual Periodic Report and any relevant taxes. With your Colorado LLC established, you can focus on growing your business across the Centennial State and beyond. Get started today and enjoy the benefits of your new LLC!
