How to Start an LLC in Colorado: If you’re interested in setting up a Colorado LLC, you’ve come to the right place. Having an LLC not only protects your personal assets but also is less complicated than other business structures. Colorado’s laws make it easy to establish your LLC in Colorado. On this page, You’ll find all the steps that must be taken to ensure that your Colorado LLC has been correctly established. We recommend you read the whole article very carefully word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Colorado
- After Starting Your Colorado LLC
- Colorado Foreign LLC
- Colorado LLC Formation Review
How to Start an LLC in Colorado
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection.
If you wish to start an LLC in Colorado, you mainly have to file your Certificate of Formation with the State and pay a filing fee of $50. There are some more steps to follow to get your LLC established in Colorado. The following steps explain everything you need to create your LLC in Colorado in 2022. Let’s get started! It is always recommended to hire a professional LLC formation service in Colorado to set up your LLC.
Step 1: Decide a Name for Your Colorado LLC
The very first step while forming an LLC in Colorado is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
Colorado LLC Naming Guidelines
There are a few specific requirements all the LLCs in Colorado have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Colorado can have the same name. Perform a name search from the below-mentioned source to be sure your name isn’t taken already.
- “Limited Liability Company”, “LLC”, “L.L.C.”, “LC”, “L.C.”, and “Limited Company” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Colorado State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –|
|Colorado Business Entity Search – Online Name Search|
Name Reservation Form – Online
Colorado LLC Name Search Guide – Instructions
Name Availability Standards – Guidelines
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided then you can reserve your LLC name for 120 days. To keep the name, you have to file a name reservation application and pay $25 to the Colorado Secretary of State. You can renew your LLC name for another 120days. For more read Colorado LLC Name Search.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name (in Colorado). In that case, you must register your name with the Colorado Secretary of State by submitting Trade Name Online Form along with the filing fee of $20.
Recommended: You can do name search, get company logo, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
Tailor Brands – ($49 + State Fees) Online LLC Setup
Tailor Brands offer DIY website templates and incredible logo designs. If you plan to get a website then it is wise to have a “.com” domain for your business but these days you can also use other TLDs like “.company”, “.xyz” etc. With Tailor Brands, you can get everything you need at an affordable price.
It is not legally mandatory to use the word LLC in your domain name or email. If you want you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Colorado
The second step to forming a Colorado LLC is to appoint a Registered Agent. A registered agent is a person or business entity that will act or work on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Colorado. Hence, hiring a competent Colorado Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Colorado or has a physical street address. Their business address or the principal address should be in Colorado. Most LLC formation companies also provide registered agent services. Below are two great LLC setup services, even if you buy their cheapest plan (normally $49/year) you also get registered agent service and other services at a reasonable price.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Colorado. Some LLC formation services offer standalone Colorado registered agent services. You can purchase only Registered Agent services from them without purchasing any other LLC formation services.
A person who is above 18 years of age and has a physical address in the state of Colorado can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One who is responsible for handling all the legal documents.
Yes, you can be your own registered agent if you are a resident of the state of Colorado and you are above 18 years of age. To become a registered agent you must have the authority to conduct any type of business in Colorado.
Registered Agent Consent Application
In Colorado, the registered agent has to sign a consent letter (online or offline) confirming consent to being Appointeded in written or electronic form. This consent must include the following details,
- LLC name
- A letter that says the person gives a consent to serve the LLC as a registered agent
- The execution date
- Name of the registered agent
- Signature of the registered agent
This consent letter assures that the Registered Agent has given his nod to serve as an Agent. This part comes with the Registered Agent registration form. Later, if an LLC needs to change the Registered Agent, then they can submit the consent alongside. It comes on the registered agent change form. The Acceptance of Consent (online) can be filed by paying a filing fee of $10. For more information on the same, read our guide on Colorado Registered Agent.
Step 3: File Articles of Organization in Colorado
The third and most important step in forming a Colorado LLC is to file the Articles of Organization. This Colorado Articles of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $50 (online) to file your formation certificate in Colorado. (Read more on LLC cost in Colorado).
The Certificate of Formation includes details like the name of the LLC, registered agent’s name, address, employees’ details, and structure of the company (member-managed or manager-managed). Before hiring employees in Colorado LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) to Colorado then you need to register as a Colorado Foreign LLC.
How to File Online
How to File by Mail
Colorado State does not have any offline filing services. All the registrations such as LLC name reservation, DBA filing, and Articles of Organization filing, are done through the online process.
Processing Time: Once you pay the LLC filing fee, immediately the registration takes place.
Recommended: Online LLC Formation service can provide all these documents within 6-8 days with lifetime customer support and 100% accuracy. We recommend using –
Tailor Brands – ($49 + State Fees) Online LLC Setup
Step 4: Create Your Colorado LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a Colorado LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation. Like Colorado, there are other states that do not have a mandatory rule to file operating agreements. But, this document would be useful if you decide to dissolve Colorado LLC later. Hence, having an operating agreement may not be necessary but it is definitely ideal.
Recommended: You can get operating agreement templates at only $29 with TailorBrands. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
Tailor Brands – ($49 + State Fees) Online LLC Setup
Step 5: Filing a Colorado LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Colorado LLC requires following specific rules and regulations. On the other side, EIN for Colorado foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
Tailor Brands – ($49 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your Colorado LLC. If you do it yourself it should take you a long time to properly understand and do all the steps.
However, if you use Tailor Brands it should take fewer hours and you always have live chat with expert support for any help you need.
After Starting Your Colorado LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Colorado business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File a Colorado LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Cost of Colorado LLC
Forming an LLC in Colorado is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form a Colorado LLC. LLCs have pass-through taxation. Hence, your Colorado LLC won’t bring you a massive tax burden. Here are some of the fees and taxes are needed to be paid while forming an LLC in Colorado,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee||$20 for 120 days|
|Certificate of Formation Fee||$50|
|State Business Tax||4.63%|
In Colorado, LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then a Name Reservation is needed. It can be renewed by paying $25. Your LLC name will be reserved for additional 120 days. In some states, Name Reservation is mandatory. Read our guide on LLC costs in Colorado for more information.
Colorado Foreign LLC
If you are interested in forming a Foreign LLC in Colorado then you need to file the Certificate of Foreign LLC to the Colorado Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Colorado SOS to form your foreign LLC in Colorado. To know more in detail, check out our guide on Colorado Foreign LLC.
Reasons to Start an LLC in Colorado
Colorado, located in the western part of the United States, has many tax benefits and incentives to offer to the newly set up businesses. Forming an LLC in Colorado is flexible for its dynamic economic structure. The state provides a handful of incentives to the small business entities if qualified.
Incentive Programs for Small Companies
Once you start your business in Colorado, you will be eligible for several incentive programs. All these programs come with diverse criteria. As soon as your company meets those requirements, you can enjoy the gains from those incentives.
A microloan facility is financial support the Colorado government provides to small entrepreneurial companies. The amount goes up to $50,000 from $5000. The main aim of Microloan is to support small and micro-businesses by providing financial assistance. The Economic Development Commission in Colorado has created this program.
Work Opportunity Tax Credit
This is a federal tax structure. This tax credit encourages companies to hire certain targeted people/job seekers. The Federal government provides a minimum of $2400 and a maximum of $9600 each time a new employee is hired. Read more on Colorado’s classification of LLC tax.
Colorado Credit Reserve
This program is created by the Colorado Housing & Finance Authority. Under this program, a newly set up small business can get credit to expand their company in Colorado.
These programs, including State Trade Expansion Program, Regional Tourism Act, Transferable Tax Credit Act, and some more programs, help entrepreneurs start an LLC in Colorado and enjoy the benefits.
Best Business Established in Colorado State
Deciding on the best business to invest your money in, in Colorado is a difficult task. Many competitive industries are coping up in the state in which a person can invest money. If you want to start an LLC in Colorado, you must have proper knowledge about the state’s top industries, which is given below.
The following industry in which a person is willing to invest their money in the state is IT. There are significant technology corporations situated in the state, and there is a continuous demand for more and more companies. This is the quality of IT services that companies in Colorado provide that managed to contribute around $25.32 billion to state GDP.
Health and Wellness
Health and wellness is another business that is rising in the state, with 16000 companies currently. These companies have a list of hospitals directly providing services related to a person’s health care and some wellness products. In the last 5 years, the industry has grown to around 22.1% contributing $16 billion to the state GDP.
Aerospace Manufacturing and Transport
The state is very well known for aerospace manufacturing, with 180 aerospace firms. If you look at the aerospace industries around the country, Colorado’s highest percentage of production is provided. Still, with the increasing demand for the air force and aerospace and the development of new projects, there is a stress on the Colorado Industry of manufacturing. The economic contribution made by the aerospace industry in Colorado is around $15.4 Billion.
Moreover, with the demand in manufacturing, the transportation demand also increases. Now normal transportation cannot carry the aerospace products as they are delicate and need better handling. You can also think of providing some best and innovative services for better transport of the products.
Apart from these famous businesses, if a person wants to invest in a small investment business, then the best options they have are:-
- Bakery Business
- Digital Marketing Business
- Restaurants and Coffee Shops
Colorado LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Colorado. Click on the steps in this list to read the full detail.
- Name your Colorado LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Colorado, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services like North West Registered Agent to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in Colorado. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Colorado but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in Colorado
Colorado does not have the option to file for LLC via mail. Once the filing fee is paid online, the registration process is completed instantly.
In Colorado, an LLC must file an annual report with the Secretary of State to stay in compliance with the state’s laws. The Colorado Secretary of State allows you to file your annual report online, and it costs $10. You must file your annual report within three months of your anniversary month. For example, if you formed your LLC on February 12, you would file the annual report between February 1 and April 30. However, you can file your annual report early to avoid the penalty fee and receive a timely email reminder.
Once you have filed the annual report, you must obtain a sales tax license for your LLC. Colorado requires that LLCs file a sales tax license to collect taxes. An operating agreement can be completed online, and the owners should sign it. The operating agreement should be kept with all other important LLC documents. However, it’s recommended that you retain a copy of it to reference whenever you want to refer to it.
If you’re unsure about the filing process, you should take your time and familiarize yourself with all of the steps. A good company for this is Tailor Brands, which offers live chat support from experts and walks you through the entire process from the filing fee to the formation of your LLC. In addition, they will walk you through all the necessary steps to complete your LLC and file your reports. Just remember to make sure to keep track of deadlines and fees before filing.
Once you’ve completed all of the above steps, you should file the operating agreement and articles of organization. While the articles of organization process is relatively simple, it’s still important to have a written operating agreement. By filing your operating agreement, you will ensure that the other business owners are on the same page with the company’s rules and procedures. So, how Fast Can I Form an LLC in Colorado? And, if you’re still unsure, check out our guide to choosing the best state for your LLC.
Before you file your LLC, you must select a name. The name you select must be unique and not already used by another business in Colorado. Use Incfile’s Business Name Generator to brainstorm and come up with a name that reflects your business. Remember to follow the rules and regulations regarding the name of your Colorado LLC to ensure its legal status. You must also choose a registered agent for your LLC. This agent will act as the company’s contact person for important documents, such as lawsuit notices and official government correspondence.
You need to register your business with the Department of Revenue. This includes unemployment insurance taxes and other state and local taxing requirements. In addition to this, you may need to register with the chamber of commerce and contact your local government to see if you need any additional licenses or permits. If you’re planning to use your LLC for profit-generating purposes, you can look into these options as well. The sooner you do so, the better.
If you are a resident of Colorado, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $50 (domestic LLC) and $100 (foreign LLC), LLC costs in Colorado include $10 for Periodic Reports every 5-months. LLCs are liable to pay State Business Tax at 4.63%.
It takes no time to get an LLC in Colorado when you file it online. If you hire a professional LLC service, then it might take less than that. We recommend Tailor Brands which has impeccable turnaround time.
Every year all the LLC have to submit an Annual Report (Periodic Report) and pay $10 to the Colorado Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Colorado Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their LLC in Colorado at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, leave a comment below.