Starting a limited liability company (LLC) is an exciting move, and in the state of Colorado, forming one is surprisingly easy. The entire process can be done online, making it a quick first step for small business owners. And since this business structure offers limited personal liability protection from your company’s debts and liabilities, your personal assets are protected.
(Not sure if an LLC is the right business structure for you? Want to explore a sole proprietorship? Or maybe an S corporation or a C corporation? Gusto’s guide to business entities can help you decide.)
The Colorado Secretary of State website offers a simple online registration system that will help you register your business from start to finish. Step-by-step, here’s what you need to know to start an LLC in Colorado.
How to create an LLC in Colorado
See if your desired business name is available
First, you’ll need a unique LLC name—no two Colorado companies can have the same name.
Do a search with the state’s name availability search tool. You may also want to consider checking the United States Patent and Trademark Office to see if businesses or products elsewhere in the country use the name. That can give you an indication of whether there will be naming issues if you expand beyond Colorado.
Every LLC in Colorado is required to include one of the following terms or abbreviations in its entity name:
Limited Liability Company
Ltd. Liability Company
Limited Liability Co.
Ltd. Liability Co.
Limited
L.L.C.
LLC
Ltd.
If you know what business name you want to use but aren’t ready to file paperwork, the Secretary of State allows you to reserve a name for up to 120 days. To do so, file a Statement of Reservation of Name online through the Secretary of State website.
If you need to hold onto your chosen business name for more than 120 days, file a Statement of Renewal of Reservation of Name online to renew your reservation. (Yes, the wording is a bit awkward.)
Need help with Colorado state tax registration for your business? Our partners at CorpNet can help.
Choose a registered agent for your business
A registered agent is the Secretary of State’s point of contact for your business; the agent name on file is who the state will contact with any tax documents, service of process notices, or subpoenas. They must have a physical address in the state, be available during regular business hours, and consent to being appointed by your LLC.
If you’re creating a single-member LLC, the Colorado registered agent will probably be you, unless you don’t live in Colorado. You can also appoint a professional registered agent or another business entity as your registered agent service.
Register with the Colorado Secretary of State
Next, you’ll need to file Articles of Organization with the Colorado Secretary of State. If this sounds like a lot of work, don’t worry—you can complete the entire process online.
You can also choose to form your business elsewhere, say Delaware, Nevada, or another state. However, if you’re doing business in Colorado, you may have to register in Colorado as a foreign LLC, depending on your type of business. If you do, this means you would have to pay two sets of state fees.
Fill out all the required fields for your Colorado LLC
The Articles of Organization form will ask you to include:
a) Your principal office mailing and street addresses, neither of which has to be located in Colorado.
The office address must be a physical address, and cannot be a P.O. box. If you choose to use your home address, keep in mind that the address will be public and searchable online.
You can also opt for more privacy and find third-party services such as:
A virtual business address service
A coworking space that offers a business mailing address
b) The name and contact information for your LLC’s registered agent.
c) The “true name,” or legal name, of the person forming the LLC.
In most situations, this is you.
Starting an LLC with multiple owners? Then you need to include information for the additional owners as a PDF or plain text file attachment. If you have an employee or other third party filing the LLC documents for you, their name would be listed here as well.
If you’re forming the LLC under another business entity—for example, if you have one umbrella company to hold several businesses you own—you can put down that entity’s information here, too.
d) The LLC’s management structure. There are two options:
Select a member-managed LLC if you’re starting a single-member LLC, or if all of the LLC’s owners—or “members”—will be directly involved in operations.
Select a manager-managed LLC if you plan to hire an external manager, or if some of the business’s owners don’t want to be involved in management.
e) Confirmation that there is at least one member of the LLC.
All LLCs must have at least one member for it to be a valid business. That member can be an individual or an entity.
f) The effective date of the business, or the date on which you want your LLC officially formed. This can be up to 90 days in the future.
g) An email address, if you would like to receive email notifications from the Colorado Secretary of State.
They may email you when a form has been filed, when reports or renewals are due, or when your LLC’s status has been changed. This is not required.
h) The name and address of the person filing the form.
If multiple members are filing together, you can include additional information as an attachment. If a third party is filing for you, their name and address would go here.
Pay for the filing
After submitting the form, you will be redirected to an online payment form for the filing fee. Colorado Articles of Organization costs $50, and you can pay using a credit card or a prepaid account.
Make sure to print a copy of the confirmation page for your records.
Secure your business record
While Colorado doesn’t require you to secure your online business record with a password, the state recommends this step so no one can make unauthorized changes to it.
The Articles of Organization confirmation page includes a link to “set up Secure Business Filing.” Click through to create a password to secure your account.
Create an operating agreement
Colorado doesn’t require LLCs to file an operating agreement—but creating one is highly recommended, especially if you’re starting a multi-member LLC.
An operating agreement is a private document for your business to rely on, and it outlines details such as:
The management structure of your LLC
Ownership stakes among members
Profit- and loss-sharing among members
Procedures for membership changes
Processes for dissolution
Steps for changing your operating agreement
You can work with an attorney to create your LLC’s operating agreement, or you can use one of the many free templates available online.
Apply for an EIN
To pay federal taxes, you will likely need an Employer Identification Number—also known as an EIN or a federal tax ID. The Internal Revenue Service (IRS) uses this unique nine-digit number to track your business.
If you’re the only member of your LLC and can answer “no” to all these questions, you don’t need to worry about an EIN yet. In this case, you can usually rely on your Social Security number for things like setting up a bank account and paying taxes.
But if your LLC includes multiple members or you plan on hiring employees, then you need to apply for an EIN through the IRS website.
Open a business bank account
Keeping your personal and business finances separate helps your accountant file your taxes. It’s also useful in proving that your business is indeed an entity separate from yourself.
If your finances are intertwined, you could lose your personal money in a lawsuit, not just your business income. Yes, the limited liability aspect of your LLC protects you, but how is anyone supposed to know what money is yours and what belongs to the business if your finances are lumped into the same bank account?
To set up an account, many banks will want proof that your LLC is registered with the Colorado Secretary of State. Expect to provide these forms:
A stamped—or official—copy of your Articles of Organization
A certificate of good standing, which says that your business is properly registered as an LLC with the state
A copy of your EIN (unless you are a single-member LLC without any employees)
The first two documents can be printed for free from the Secretary of State’s website. Just search for your LLC in their business database.
Apply for a business license (if needed)
Colorado doesn’t require businesses to have a general license, but you may need an occupational license to operate in certain regulated industries.
These regulated professions include:
Psychologists, therapists, addiction counselors, and social workers
Architects, landscape architects, and engineers
Cosmetologists, barbers, nail technicians, and estheticians
Plumbers and electricians
Go to the Colorado Department of Regulatory Agencies to check out the complete list of state-licensed occupations to find out if you need an occupational license.
Also, look into any specific requirements for the counties and cities you’re operating in. These can be general business licenses as well as industry-specific ones. For example, Denver does not have a general licensing requirement, but it does require licenses for food peddlers, dry cleaners, child care providers, and other specific businesses.
Open a wage withholding account
Are you planning on hiring employees and withholding taxes from their paychecks? Then, Colorado requires you to open a wage withholding account, which can be done online for free. This account allows you to manage and pay withheld income tax.
You’ll need this if you’re hiring W-2 employees or withholding taxes from 1099 contractors. (Reasons to withhold taxes for 1099s can be found here.)
Get a sales tax license
Opening a wage withholding account will automatically set up a sales tax license for your business if you don’t have one already.
Even if you don’t plan to hire employees, you’ll need a sales tax license if you plan on selling taxable goods or services. The license allows you to collect taxes on these items, which you will then pay to the Colorado Department of Revenue.
You can apply for this online. How much you’ll pay for a sales tax license depends on when you apply for it. More information on these licensing fees can be found on the Secretary of State’s website.
Keep up with your annual filing requirements
Don’t forget to file your annual report (known as the periodic report in Colorado) each year to update your information with the state and make sure your LLC maintains “good standing.” (That’s important for things like opening a business bank account and getting a loan.)
The due date depends on your Colorado business and is listed on your LLC’s summary page under “Periodic report month.” (You can look up your summary page online.)
How much does it cost to form an LLC in Colorado?
If you’re looking to form your LLC in Colorado, here’s what you can expect to pay in business formation fees:
Articles of Organization filing fee: $50
Name reservation fee (optional): $25
Sales tax license: depends on date of application, ranges from $4 to $16
Registered agent service fees (optional): this depends on the company you work with
Congratulations! By following all of the steps outlined in this blog post—or hiring an LLC formation service or registered agent service—you will have submitted all the necessary legal documents and successfully registered in Colorado. For additional related tasks, such as registering a trademark or setting up payroll with professional services, refer to our blog.
Frequently asked questions about creating an LLC in Colorado
Does Colorado allow single-member LLCs?
Yes, Colorado allows the formation of single-member LLCs in the state. Just make sure to follow all of the guidelines and corporate formalities of this type of business structure to maintain your limited liability protection.
Can I form an LLC in Colorado if I don’t live there?
Yes, you can form an LLC in Colorado if you don’t live there, as long as you follow the requirements for creating and maintaining an LLC in the state. Note that you may also have to register your new business as a foreign entity in your home state.
Can I reserve a business name before filing?
Yes, you can reserve a business name before you form your business by filing a Statement of Reservation of Name. You can do this through the Secretary of State’s website.
Do I need to publish a notice in a newspaper, like some other states require?
No, you are not required to publish a notice in a newspaper when forming an LLC in Colorado.
Are LLC members’ names and addresses public in Colorado?
Not necessarily. When you file your Articles of Organization, only the following information will be made public:
Principal addresses of your business
Name and address of your registered agent
Name and address of the person forming the LLC
Name and address of the person causing the document to be filed
By having a business attorney file the articles of organization on your behalf, you can keep your information private.
To keep your information private, you can hire a third-party service to use as your business address and registered agent. You can also hire a business attorney to form your LLC and file the Articles of Organization on your behalf.
Can my LLC operate under a different name than what’s on the Articles of Organization?
Yes, your LLC can operate under a different name by registering a “Doing Business As” name (also known as a DBA or trade name) for your business with the Colorado Secretary of State office. To register a trade name for your business, submit a Statement of Trade Name form and pay the filing fee on the Secretary of State website.
What happens if I don’t file the periodic report?
If you don’t file your periodic report by the final grace period deadline, your business status will change to “Delinquent.” You’ll then need to file a Statement Curing Delinquency to restore your LLC’s good standing with the state.
LLC owners will be charged a $50 fee for filing their periodic report late.
