LLC is a business structure which is flexible and least complex. You get the perks of pass-through taxes, limited liability and legal protection of your personal assets. In case you have decided to start an LLC in Colorado, here are a few steps to follow:
1. Choosing the Right name for your LLC
According to the Colorado law, an LLC must contain any of the words
- “limited liability company,”
- “ltd. liability company,”
- “limited liability co.,”
- “ltd. liability co.,” “limited,”
- “l.l.c.,” “LLC” or “ltd.,”
- “Limited Liability Company,”
- “Limited Company,”
- The abbreviation “L.L.C.,” “L.C.,” “LLC,” or “LC.”
The LLC’s name must not be the same as any other name of other business entities already filed with the Colorado Secretary of State. Check the names for availability by searching the Colorado Secretary of State business name database.
Any available name may be reserved for 120 days when you file a Statement of Reservation of Name with the Colorado Secretary of State. The filing fee is $25 and the form must be filed online at the Secretary of State website.
2. File Articles of Organization
For a Colorado LLC, you need to file articles of organization online with the Colorado Secretary of State. These articles must include the LLC’s name and address as well as the name and address of LLC’s registered agent, the name and address of the person forming the LLC whether the LLC will be run by a manager or members and many more details.
The articles of organization should be filed online for a fee of $50.
All of the paperwork and procedural steps for a limited liability company can be done online using Nolo’s Colorado Online LLC Formation application.
3. Appoint an Agent
Every LLC based in Colorado must have an agent for service of process in the state. This may be an individual or an entity which will accept legal papers on the LLC’s behalf if it is used. The agent may be any of the following:
- Business entity based in Colorado
- A foreign entity authorized for business in Colorado
4. Create an Operating Agreement
Although LLCs in Colorado are not required to have a limited liability company operating agreement, it is wise to have one in place with other members should your LLC have more than one member.
Filing an LLC and Taxes
The following forms and fees are required when starting an LLC in Colorado.
- Forms: File your articles of organization
- Limited liability company operating agreement: Should be kept on file by a registered agent
- Taxes: LLCs in Colorado are considered as corporations, limited liability partnerships or single-member LLCs. They are subject to federal income tax classifications.
- a) An LLC treated as a limited liability partnership- required to file Partnership Return of Income (Colorado State Form 106) with the Colorado Department of Revenue.
- b) An LLC treated as a C corporation – required to file C-Corporation Income Tax Return (Colorado State Form 112) with the Colorado Department of Revenue.
- c) An LLC treated as an S corporation- required to file S-Corporation Return of Income (Colorado State Form 106) with the Colorado Department of Revenue.
- d) An LLC treated as a sole proprietorship – required to file a personal income tax return with the Colorado Department of Revenue.
5. File Periodic (Annual) Reports
All Colorado LLCs must file a Periodic Report with the Colorado Secretary of State each year. The report must be filed online at the Secretary of State website. The filing fee is $10.
You can file the report during the three month period beginning on the first day of the anniversary month of the month when the LLC was formed or even two months early.