How to Form an LLC in Colorado, Step by Step
Forming a Colorado LLC takes five steps. Here is the order, from picking a name to filing with the Secretary of State.
Forming an LLC in Colorado is a short process. You pick a name. You name a registered agent. Then you file one document with the state. Here is how to form an LLC in Colorado, in order, and what to do after the state says yes.
What is an LLC, and why Colorado founders choose it
The IRS says a Limited Liability Company is a business structure allowed by state statute. It blends two structures. The SBA's guide says an LLC lets you take advantage of the benefits of both the corporation and partnership business structures.
Two things draw founders to it. First, the SBA's guide says LLC profits and losses can get passed through to your personal income. This happens without facing corporate taxes. Second, the SBA's guide says an LLC or corporation status can protect your personal property from lawsuits. But that protection has limits.
Can one person own a Colorado LLC? The IRS says most states also permit single-member LLCs, those having only one owner. The IRS says most states do not restrict LLC ownership. So members may include individuals, corporations, other LLCs and foreign entities. A few businesses generally cannot be LLCs. These include banks and insurance companies.
Step 1: Choose a name for your Colorado LLC
Your name goes on every form, so settle it first.
Not ready to file? You can hold the name. The Colorado Secretary of State charges $25.00 for a Reservation of Name.
Step 2: Appoint a registered agent
Articles of Organization name the registered agent, so choose one before you file. If your registered agent information changes later, the Colorado Secretary of State charges $10.00 to file a Statement of Change for registered agent information.
Step 3: File Articles of Organization with the Colorado Secretary of State
This is the step that creates the company.
The SBA's guide says articles of organization is a simple document that describes the basics of your LLC. It includes business information. This covers the company name, address, member names, and the registered agent.
The Colorado Secretary of State charges a $50.00 online fee to file Articles of Organization for a limited liability company.
Step 4: Create an operating agreement
The SBA's guide says an operating agreement describes the structure of your company's financial and functional decisions. It defines how key business decisions are made. It also defines each member's duties, powers, and responsibilities.
Step 5: Understand how your LLC is taxed
The SBA's guide says members of an LLC are considered self-employed and must pay self-employment tax contributions towards Medicare and Social Security.
You have other options. The SBA's guide says an LLC can be taxed as a C corp, S corp, or a nonprofit, though these arrangements are less common.
If you close your Colorado LLC
If the company stops doing business, close it. The Colorado Secretary of State charges $10.00 to dissolve a limited liability company.
That is the full sequence. Name, agent, filing, agreement, taxes.