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Last updated September 18, 2021

Colorado LLC FAQs

Colorado LLC FAQs - Starting an LLC in Colorado

Video Transcript:

Hey folks, Matt Horwitz, LLCUniversity.com. I hope you are doing well. We are on the topic of Colorado LLC’s. I’m going to read to you something that I wrote. There is probably about eighteen, maybe seventeen, eighteen, FAQs here, so I’m going to go rather quick, so that this video isn’t too long. This is going to break down everything, about forming an LLC, in Colorado. All the steps, all the requirements, all the fees. The what if’s, et cetera. Let’s start at the very top. What is a Colorado LLC? A Colorado LLC, is a type of business structure, formed by state law. You can use an LLC to run a business, or you can use it to hold assets, like real estate, cars, boats, vehicles, anything. An LLC is a legal person, we are natural persons, so the LLC can do a lot of things that you and I can do, like it can make money, it can own and lease property, enter into contracts and agreements, open a bank account, it can sue, it can be sued. An LLC can be formed by one person, called a single member LLC, or two or more people, called a multi member LLC. What are the advantages? Question two, what are the advantages of forming an LLC, in Colorado? There’s two main advantages, to forming a Colorado LLC. Personal liability protection, and to pass through taxation. With an LLC, your personal assets are protected from the assets held by the business, and that means your personal assets cannot be used to pay off any business debts, or liabilities, in case your LLC gets sued. An LLC avoids double taxation, which Corporations face. Which means, you just pay any profits, or losses, from the LLC. They flow through, to your personal 1040 federal tax return, and you’re not paying taxes at the corporate level, and at the personal level. Next question, how can I start an LLC, in Colorado? There is five simple steps. First you choose your name, next you designate your Registered Agent. Three, you file your articles of organization with the Colorado Secretary of State. Four, draft, and sign, your operating agreement. Five, obtain your EIN, also known as your federal tax I.D. number, from the IRS. The cost to form an LLC, in Colorado, is fifty dollars. We have another video on that, that’ll walk you through things, step by step. Next question, do I need a lawyer, to form an LLC, in Colorado? No. It’s not a legal requirement to have a lawyer, or an attorney, form your LLC, in Colorado. It’s really simple, you can do it yourself. Again, we have a video on that. However, we do recommend that you consult with a lawyer, if your business has industry specific management, you have complex ownership agreements, you’re raising a lot of capital, or you have multiple investors to a large number of members, like nine members, seven members, things like that. Next question, how do I maintain an LLC, in Colorado? There is two steps here, two things to do. The first is filing your periodic report every year, which is ten dollars. Then, the second is filing your Colorado state taxes, on form 104. 140 or 104, don’t have it written down here, but anyway, it’s on our site. You do that with the Colorado Department of Revenue, every year. How long does it take to form an LLC, in Colorado, is the next question. Filing your articles of organization can only be done online. You do not file by mail, Colorado is very advanced. What that means is by filing your articles of organizations online, once you do everything correctly, they are instantly approved. Literally, it takes ten, or fifteen, minutes to form an LLC, in Colorado. It’s kind of ridiculous, compared to some states, that have two weeks wait time. How many people do I need, to form an LLC, in Colorado? Minimum of one. One person is a single member LLC, two, or more, is called a multi member LLC. There is no requirements, you can have one, or you can have one hundred and seventy five. There is no limit. How much does it cost to start an LLC, in Colorado? Again, I mentioned this earlier. Filing your articles of organization with the Secretary of State, is fifty dollars, and then every year, you have to file your periodic report, which is ten dollars. Colorado is such an awesome state, it’s so affordable. The average filing fee in the United States, in one hundred and thirty six dollars, so Colorado, at fifty, is very affordable. How do I file my periodic report, for my Colorado LLC? You can file your periodic report online at sos.state.co.us, link below this video, or on our site. Again, the filing fee is ten dollars, you pay it online, with a debit, or a credit card. Basically, you get to file it in a five month window, around your periodic month. Think of this as your anniversary month. If you formed your LLC in June, June next year is your periodic month, and you can file the report in June two months prior, or two months after. You have a five month window. If you missed the five month window, there is a fifty dollar late fee. Is Colorado the best state to form my LLC? Great question. A lot of people make a lot of mistakes here, so yes, Colorado is the best state, if you live there, and that’s your home state. Otherwise, a lot of people get misled into forming LLC’s in Nevada, or Wyoming, or Delaware, anything. If you’re forming your LLC outside of your home state, and you’re doing business in your home state, you’re going to be required to file that out of state LLC as, what’s known as, a foreign LLC in your home state, and you will have to pay filing fees in both states. You need a Registered Agent in the foreign state, you are paying annual fees in both states, and you’re not going to save any taxes, because taxes are paid where the money is made. Meaning even if you form an LLC outside of Colorado, you still have to pay Colorado taxes. Please do not believe the hype. If you live in Colorado, form your LLC there. If you don’t live in Colorado, not sure why you’re watching this video, but you should form your LLC in your home state. Should I form an LLC for real estate investing? A very popular question. I would say, yes, why not. I mean, heck, form a Corporation, form any type of entity, for your real estate investing. Typically, an LLC is the most flexible, and the most popular, structure for real estate investors. Again, the reason here is it builds a wall of protection between your personal assets, like your bank, your car. Your banks accounts, your home, your car, vehicles, et cetera, from that of the business. If a tenant slips and falls, or some issue with construction, you get sued, your personal assets are protected, so a Colorado LLC is excellent for real estate investing. What are the annual fees, for a Colorado LLC? Mentioned this earlier, it’s the Periodic Report. Ten dollars, then you have to file Colorado state taxes, I believe the personal tax rate on LLC’s right now is 4.6 percent. Get your CPA, get your accountant to help you with that. You’re going to have to file taxes. But, from just a raw kind of start up cost of forming the LLC, with the Corporation division, it’s fifty dollars, and then ten dollars every year. What other fees do I need to pay, to form an LLC in Colorado? Again, besides the one time setup fee of fifty dollars, and then the ten dollars every year, there is really no other fees to form the LLC. If you consult with a lawyer, or an accountant, that’s going to cost you extra. If you don’t have an address, or a friend, or family member, in the state that’s going to be a Registered Agent, and you need to hire a Registered Agent, that could cost one hundred, to three hundred dollars, per year. The company that we recommend is one hundred and twenty five dollars per year. What taxes do I need to pay as an LLC in Colorado? Let’s back up. Taxes are paid on three levels, federal, state, and local. Your LLC does not pay federal taxes on its own. You personally do, and the profits, and losses, from the LLC are going to flow through there. The state level taxes with Colorado, it’s called the personal net income rate, and again, its 4.6 percent. Get a local professional to help you with that. I’m not going to walk you through how to file that, because form, what’s the name of the form? Form 104 is pretty complicated, so anyway, Colorado taxes are due every year, April 15th. There is a link below this video for more information there. Then, you may need to pay additional taxes locally, at the county, or city level, but there are sixty four counties in Colorado, and this video, I’m not going to go into all the details. Just hire a tax professional, that’s our best tip there. What’s better, a Colorado LLC, or a Corporation? An LLC is, usually, a better choice for the vast majority of people, because it offers the liability protection, without the complexity of management, or double taxation. Corporation, you have to have a board of directors, you have to elect corporate officers, you have to have shares. You issue shares to the owners, you have to have annual meetings. They are complex. You pay double taxes. Most people don’t need a Corporation, think of a Corporation for more of like your tech, startup based companies. Those are my thoughts there. Yes, that’s about it. Another question, what’s better, a Colorado LLC, or a Partnership? A Partnership is two or more members. In my opinion, a Colorado LLC is definitely better than a Partnership. There is no benefits to a Partnership whatsoever, except that you don’t need to do anything to be a Partnership, you just start, you know, taking part in business. But, your personal assets are completely exposed, both you, and your partner. Same thing goes for the next question. What’s better, a Colorado LLC, or a sole proprietorship? Both of these are stupid questions. People that form Partnerships, or self proprietorship’s, especially when Colorado is such an affordable state, are either misinformed, or they are lied to. They just don’t know how easy it is, but it’s so easy to form an LLC in Colorado, that to operate as a Partnership or sole proprietorship, is just really stupid, so please don’t do that. You’re leaving, basically you, and your business, are the exact same thing, in a Partnership, or sole proprietorship. When is the best time of the year to form an LLC, in Colorado? Great question. Generally, any time of the year is good. The only caveat here, is if you’re forming your LLC at the end of the year, like October, November, December, but you don’t actually need your business open in October, November, December, it’s better to wait until January. This is a little personal tip here, nothing major, but if you form your LLC, and its approved in November, or October, and you don’t really need it, you have to file a tax return for that year, so it’s just an additional headache, and paperwork, so if you can wait until the new year, wait until the new year. But, if you need the business open, then just form it. Just a small tip. Next question, where can I get an operating group, for my Colorado LLC? Check the link below this video, we have a free operating template on our website, you just fill in the blanks, and you’re good there. Next question. Who can be my Registered Agent, in Colorado? Most states you have three options. Colorado is super unique. You have four options. So, if you have a street address in Colorado, your options are, one, you can be the LLC’s Registered Agent. Number two, the Colorado LLC can be its own Registered Agent. This is a unique law, to the state of Colorado. If you don’t have a street address in Colorado, use a friend, or a family member, to be your Registered Agent, so long as they agree to accept any legal documents, or subpoenas, or lawsuits, that gets into your LLC. If you don’t have an address in the state, or you don’t have a friend, or family member, that does, you’ll need to hire a commercial Registered Agent. The fees usually range one hundred, to three hundred dollars, per year. The company we recommend is one hundred and twenty five dollars per year. They are called Northwest Registered Agent. The info on them, is below this video. Last question, why should I form an LLC, in Colorado? If you’re asking this question, at this point, and you don’t know why, shame on you. There’s two main reasons, personal liability protection. Protect your personal assets, in the event that your business gets sued, and pass through taxation. It’s such an easy legal business structure to run, and manage, as opposed to a Corporation. So, those are the two main benefits, personal liability protection, protecting your personal assets. The ease of management, the low start up costs. There’s a lot of benefits, actually. If you have any additional questions, if you’re on YouTube, check out the information below this video. If you’re on our website, we have links to everything. We’ll walk you through everything, step by step. Forming a Colorado LLC is very affordable, it’s easy. There is five steps to forming an LLC. Its super cheap, it’s super fast. It’s a no brainer in Colorado. All right. This is a long winded video, but I hope it’s been helpful for you. Have a great day.

What is a Colorado LLC?

A Colorado LLC is a type of business structure formed by state law. It can be used to run a business, or it can be used to hold assets like real estate, boats, and planes.

A Colorado LLC can:

  • make money
  • own/lease property
  • enter into contracts
  • open a bank account
  • sue and be sued

It can be formed by one person or by several people.

An LLC with one owner is a called a Single-Member LLC. An LLC with many owners is called a Multi-Member LLC.

What are the advantages of forming an LLC in Colorado?

There are 2 main advantages to forming a Colorado LLC: personal liability protection and pass-through taxation.

With an LLC, your personal assets are protected from the assets held by your business. This means your personal assets cannot be used to pay off your business’s debts or liabilities in case your LLC gets sued.

An LLC also avoids double taxation. Unlike a Corporation, an LLC does not have to file a separate federal tax return with the IRS.

Instead your Colorado LLC profits/losses pass through directly to your personal income tax return.

How to start an LLC in Colorado?

There are 5 steps to forming an LLC in Colorado. They are:

  1. Choose a Name for your LLC
  2. Select your LLC’s Registered Agent
  3. File your LLC’s Articles of Organization
  4. Complete and sign your LLC’s Operating Agreement
  5. Get your LLC’s EIN (Employer Identification Number)

You’ll also need to do the following every year to keep your LLC in good standing with Colorado:

  • File your LLC’s Periodic Report
  • File and pay your Colorado Taxes

Forming an LLC in Colorado can only be done online. You can file your Colorado LLC’s Articles of Organization here: http://www.sos.state.co.us/biz/FileDoc.do

If you need help forming your LLC in Colorado, watch our step-by-step videos.

Do I need a lawyer to form an LLC in Colorado?

No, it’s not a legal requirement to use a lawyer to form your LLC. Forming an LLC in Colorado is simple. You can watch our free videos here which will walk you through all the steps.

We’ll teach you how to:

  • Choose your LLC name
  • Select your LLC’s Registered Agent
  • File your LLC Articles of Organization directly with the Secretary of State

You’re also not required to use a lawyer to:

  • Draft/complete your LLC’s Operating Agreement
  • Get your Employer Identification Number (EIN)
  • File a Periodic Report with Colorado

We do recommend consulting with a lawyer if your LLC:

  • Requires industry-specific management
  • Has complex ownership agreements
  • Has many investors or a large amount of members

How do I maintain an LLC in Colorado?

You need to do two things to keep your LLC in Good Standing with Colorado:

  • File your Periodic Report
  • File and pay any Colorado Taxes

You will be penalized an extra $50 on top of the $10 annual filing fee if you submit your Periodic Report late. Your Colorado LLC will also be marked “Non-compliant”.

You will then be given another 3 months to submit your Periodic Report. If you still fail, your Colorado LLC will be marked “Delinquent”.

If this happens, you will no longer be able to do business in Colorado.

To avoid this, we highly recommend you put a repeating reminder on your calendar.

As for taxes, you will have to register your LLC with the Colorado Department of Revenue after it is approved.

We recommend getting a qualified CPA/accountant to help you file your taxes correctly.

How long does it take to form an LLC in Colorado?

Filling out your Articles of Organization takes about 10 minutes. It is done completely online. See our step-by-step video here.

Your Colorado LLC officially exists upon processing and approval of your Articles of Organization. Approval is usually instant.

How many people do I need to form an LLC in Colorado?

You only need 1 person to form an LLC in Colorado, and there is no limit to the number of members your LLC can have.

An LLC with 1 member is called a Single-Member LLC.

An LLC with 2 or more members is called a Multi-Member LLC.

How much does it cost to start an LLC in Colorado?

You’ll need to pay the Secretary of State a one-time filing fee of $50. The fee is submitted together with your Colorado LLC’s Articles of Organization.

Only the following debit or credit cards are accepted:

  • Visa
  • Mastercard
  • American Express

How do I file a Periodic Report for my Colorado LLC?

You can file your Periodic Report online here:

http://www.sos.state.co.us/biz/FileDocSearchCriteria.do

The filing fee is $10.

The Periodic Report can be submitted during a 5-month window:

  • 2 months before the Periodic Report Month (the month your LLC is formed)
  • During the Periodic Report Month itself
  • Within 2 months after the Periodic Report Month

You can still file your Periodic Report within 2 months after the lapse of the 5-month window. However, you will be charged an extra $50 for late submission. Your LLC will also be marked “Non-compliant”.

Tip: You can find your Periodic Report Month by looking at your Articles of Organization’s approval date. If you need help filing your Periodic Report correctly, please see our free video lesson here.

Is Colorado the best state to form my LLC?

Yes, but only if Colorado happens to be your home state. Otherwise, you’d just be doubling your expenses if you form your LLC in a state other than your home state.

A lot of people are misled into forming an LLC out of state, in such places as Wyoming, Nevada, and Delaware.

This is bad advice because if you formed an LLC out of state, you’d then be required to register that out-of-state LLC as a “Foreign LLC” in Colorado.

This means you’ll have to pay:

  • 2 State filing fees
  • 2 Annual Report fees
  • 2 Registered Agents
  • 2 State Taxes

Again, forming an LLC in Colorado is good if you happen to live there. For those who don’t live there, we recommend you form your LLC in your own state. This way, you’ll avoid the headache of having to pay for and manage 2 LLCs. For more information on which state is best, please watch this video.

Should I form a Colorado LLC for real estate investing?

Forming an LLC is a very popular choice for real estate investors. A Colorado LLC builds a “wall of protection” between your personal assets and your real estate investments.

In case your real estate LLC gets sued, only its assets can be used to pay off its debt or liabilities. Your personal assets (like your home, cars, bank accounts, etc) remain safe.

What are the annual fees for a Colorado LLC?

The annual fee for a Colorado LLC is $10. You will pay this each year by filing what’s called a Periodic Report. Here is the link to file the Periodic Report:

http://www.sos.state.co.us/biz/FileDocSearchCriteria.do

What other fees do I need to pay to form an LLC in Colorado?

Besides Colorado’s one-time filing fee of $50 and the $10 per year for your Periodic Report, there are no other fees. Colorado is a very affordable state!

However, consulting with a lawyer and/or accountant will cost extra.

And if you need to hire a Commercial Registered Agent for your LLC, that will cost an additional $100-$300 per year.

What taxes do I need to pay as an LLC in Colorado?

Taxes are paid on 3 levels: Federal, State and Local.

Your LLC does not file its own tax return with the IRS. Instead, profits and losses “flow through” to your personal tax return (Form 1040). The LLC’s profits or losses are listed on a Schedule C inside of your personal 1040 tax return.

Your LLC will also need to file and pay taxes at the state level with Colorado. A Colorado LLC pays its taxes at the Personal Net Income Rate of 4.6% (not at the Corporate Net Income Rate).

You will need to file the Colorado Individual Income Tax Form 104 with the state by April 15th each year. Here is a link to instructions as well as forms:

CO Department of Revenue: Individual Income Tax Forms & Instructions

You will also likely need to pay taxes at the local/county level. However, you’ll need to speak with a professional in your area since Colorado has 64 counties. This article is just an overview.

Also, calculating your tax obligations can be complicated. It can negatively impact your LLC if done incorrectly.

For this reason, we recommend getting a qualified CPA/accountant to help you. Check out this video for tips on finding a good tax professional.

Here are some more tax resources:

What’s better: a Colorado LLC or a Corporation?

A Colorado LLC is usually a better choice for most people since it offers you personal liability protection – (just like a Corporation) – without having the complexity of management and without double taxation.

Personal liability protection means your personal assets won’t be used to pay off the debts/liabilities if your LLC gets sued.

And avoiding double taxation means your LLC’s profits/losses will “flow through” directly to your personal income tax return (rather than paying taxes at the corporate and personal level).

A Colorado LLC is also simpler to run and manage as you’re not required to hold annual board meetings or record meeting notes.

What’s better: a Colorado LLC or a Partnership?

A Colorado LLC is definitely better than a Partnership.

In a Partnership, you and your partner(s) are personally liable for your company’s debts.

Forming an LLC in Colorado offers personal liability protection to you and all the members of the LLC. That means your personal assets are going to be protected if your business gets sued.

What’s better: a Colorado LLC or a Sole Proprietorship?

A Colorado LLC is definitely better than a Sole Proprietorship for the same reason as above.

You will be held personally responsible for your business’s debts and liabilities.

With a Sole Proprietorship, there is no distinction between you personally and your business. Essentially, you ARE your business.

Many Sole Proprietors usually don’t know how simple it is to form an LLC (or they were given poor advice).

When is the best time of year to form an LLC in CO?

Generally, any time of the year is the best time to form a Colorado LLC.

For tax purposes however, we recommend you avoid forming your Colorado LLC in October, November, and December (if you don’t need your business open those months and can wait until January).

It’s not a huge deal, but rather a helpful tip.

For example, if you form your LLC in November, it will then be in existence for 2 months during the tax year. This means you’ll need to file a tax return for that year. So, if you don’t actually need the business open before January, waiting until January will save you the annoyance of filing a tax return for that year.

However, if you can’t wait until January, then it’s more important to form your LLC and disregard the small annoyance.

Where can I get an Operating Agreement for my CO LLC?

You can download our free documents here and fill in the blanks:

You can also watch our free step-by-step video on completing your LLC Operating Agreement.

Who can be my Registered Agent in Colorado?

If you have a street address in Colorado, your options are:

  • You can be your LLC’s Registered Agent
  • Your LLC can serve as its own Registered Agent (this is a unique law in Colorado)

If you don’t have a street address in Colorado:

  • A friend or family member can be your LLC’s Registered Agent
  • Hire a Commercial Registered Agent

If you want a trustworthy Commercial Registered Agent, we recommend Northwest Registered Agent ($125 per year).

Northwest Registered Agent has been in the business for 20 years. They offer excellent services at affordable rates.

Why form an LLC in Colorado?

You should form a Colorado LLC to protect your personal assets.

A Colorado LLC offers you personal liability protection if your business gets sued. Your personal assets cannot be used to pay off your business’s debts or liabilities.

Where can I learn more about LLCs?

Please check out our Learning Center for more videos and helpful articles on:

  • What an LLC is
  • What its advantages are
  • What the best state is to form one

Ready to Form your Colorado LLC?

Visit LLC University’s free step-by-step videos on how to form your LLC in Colorado.

Matt Horwitz
Matt Horwitz
Founder & Educator, LLC University®
Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
 
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.

30 comments on “Colorado LLC FAQs”

Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

  1. I own several rental properties in colorado but I live in Nebraska. I am thinking of forming an LLC but not sure what state to form it in. Should I form the LLC in Colorado where the rental property exists? or Should I form it in Nebraska where I reside? or Should I form it in Wyoming where it is less expensive?

    • Hi George, you are supposed to form an LLC in the state where you are doing business, so in this case, that would be Colorado. You could also form a Wyoming LLC and have it own your Colorado LLC (or multiple Colorado LLCs, depending on how you set it up). Hope that helps!

  2. I have multiple rental properties in Colorado. Should I form one LLC to cover all of them? or should I form an LLC for each individual property to limit the Liability? So one tenant might not be able to go after other property assets……

    • Hi Mike, there isn’t really a black and white answer to this one. It depends on the value of your investments and your personal preference. Having said that, having separate LLCs will provide more asset protection. Can I ask how many properties you’re talking about? If you have 40-50+ properties, the “one-LLC-per-property” could become unorganized and difficult to manage.

  3. Hello Matt, Thank you for the response. We have 6 properties…. I would not want one tenant to be able to go after other properties. Do you think this would be beneficial and worth setting up?

    I form the LLC and then Quit Claim Deed the properties at the Clerk/Recorders office, correct?

    Your videos and website are super helpful, Thank you.

    • Hey Mike, you’re welcome. One LLC per property for 6 properties isn’t uncommon. Yup, Quit Claim Deed is the route to go. I don’t know the ins and outs of transferring title in CO, so you could also use a title company as well. Hope that helps. Let me know if you need anything else.

  4. We are in Colorado and retired. My husband is opening a consulting LLC and I will be doing all his clerical, tax, etc. I have also done a little clerical consulting for another company. Should we each open our own LLC as a sole proprietorship and I bill his company for the work I do or should we try to open one LLC as a partnership and run both consulting thru it. This will not be a high dollar LLC. We expect it to gross under $25,000 per year. We are just supplementing Social security and staying busy.

    • Hi Susan, I’m not 100% sure which is best. This type of question is better posed to an accountant since it could be done either way and there may be some tax advantages (or disadvantages) one way versus the other. One thing to keep in mind is that Colorado’s LLC filing fee (and Annual Report fee) are very low (when compared to other states), so separating the businesses into 2 Colorado LLC will not be expensive and it might make your reporting, documentation, and organization easier. Again though, please speak with a few accountants about the details. Hope that helps :)

  5. Matt, my wife and I are looking to create an LLC within the state of Colorado for our rental properties, but recently have found that we will be moving to Texas in about a years time. In your opinion, would it be better to create an LLC in Texas and registered it in Colorado or vice versa?

    • Hi John, where are your properties located? Will you be adding future properties to this LLC? If so, what state will they be located in? Thanks.

  6. Matt, our current property is located in Colorado, and we will look to be adding property in both Colorado and Texas.

    • Thanks John. And will you want all your properties under 1 LLC or will you be dividing them among multiple LLCs?

      • I had originally planned on one LLC, and I had frankly not considered doing multiple due to the additional issues they bring.

        • Thanks for the info John. Yea, there are many ways to “slice the pie” regarding real estate LLCs. In this scenario, you’ll be doing business in both Texas and Colorado, since that’s where the rental properties are located. You can either form a Domestic LLC in Colorado and register it as a Foreign LLC in Texas or you can form a Domestic LLC in Texas and register it as a Foreign LLC in Colorado. A Domestic LLC in CO is $50 and Domestic LLC in TX is $300, however, a Foreign LLC in CO is $100 and a Foreign LLC in TX is $750. So it’ll be cheaper to make the “base” LLC in Texas and then register that LLC to do business in Colorado. However, that’s just the 1-LLC-setup. Something to consider. You could form 1 parent LLC (the holding company) in Wyoming (stronger asset protection) and have that Wyoming LLC own the child LLC(s). The child LLCs are domestic LLCs formed in the states where the property is located. I also recommend speaking with a few real estate attorneys regarding the pros and cons to the various ways to hold real property and structure your entities. Hope that helps.

  7. When started my LLC/Limited Corp in Colorado I thought I was going to start making a profit in 2-3 years. It does not seem that is what is going to happen. How many years does Colorado law give the llc to start making a profit.

    • Hi Patrick, there is no law that an LLC must make a profit. You can leave the LLC open for as long as you’d like. The state will not impose any rules – again, they don’t exist – regarding profitability. Hope that helps.

  8. Every where I look online to start my LLC for a consulting business gives me a higher price than what you talked about to form the LLC. Is their a better place i should be going to so it is only $50?

    • Hey Angelo, the $50 is the Colorado state filing fee. If you’re looking to hire a company to file for you, they charge more on top of that. If you want to file yourself, we have instructions here: how to form an LLC in Colorado. Just go through the “detailed lessons” in order. Hope that helps.

  9. Hi Matt,

    Thank you so much for all the information here. I’d like to launch my tech startup in the United States. I am not a u.s citizen and do not live in the United States yet but I am planning on moving to the u.s in a few months. What I wanted to ask is whether for now, I could form my llc in Colorado for these few months just to avoid all California taxes and then once I move to the u.s, relocate my llc to California (I know this can be done). Would this be a good idea? I don’t mind the additional paperwork (if there is any). It’s just that am not backed by some venture firm and do not have much money, so Colorado seems really like a good idea for now… Anyway I appreciate any advice you can give me.

    Kind regards,

    Sulejman Ljimaj

    • Hi Sulejman, you’re very welcome. There are usually three ways to “move” an LLC. In some states there are only two ways. From Colorado to California, there are three ways. First, you can register your Colorado LLC as a foreign LLC in California. However, you would need to maintain both the Colorado LLC and the California LLC. That means you would need to have a Registered Agent in both states and file both states’ annual requirements. The second option is to dissolve (shut down) the Colorado LLC and then form a new LLC in California. However, this doesn’t keep any of the company history as you are now creating a new legal entity. The third option is to file a conversion (also called “domestication”). This would convert your Colorado LLC into a California LLC. You need to file an “Articles of Organization – Conversion” in California to accomplish this. And after the conversion is completed, you would dissolve the Colorado LLC. The first and the third option keep the company history, like EIN and bank account. The second option does not. However, having said all that, if this is your first time dealing with LLCs, all three ways can be complicated to do on your own, will cost extra money, could be stressful, and there could be errors made. It might just be easier to form an LLC in California when you are ready since “moving” an LLC is not an easy process. Once you decide where you want to form your LLC, and after your LLC is approved, we have articles for non-US residents: how to get an EIN without SSN, LLC bank account for non-US resident, and Form 5472 for foreign-owned Single-Member LLCs. Hope that helps.

      • Hi Matt,

        Thank you so much for the additional info. I guess I’ll just launch my LLC in the state where I’ll be living. I think I can avoid unnecessary headache by doing that. And the only surprise here is form 5472. Didn’t know about that one, so that goes on my to do list :). Thank you so much again, your website is a blessing to all starters, especially ones who live a few thousand miles away. Have a great weekend.

        Kind regards

        Sulejman Ljimaj

        • Hi Sulejman, thank you for all the kind words! You’re very welcome :)

  10. I formed a Colorado Single Member LLC without any operating agreement, and have been operating for the last three years. I want to transfer ownership (I assume that means transfer membership – me as the single member) to my wife. How do I accomplish that? Thank you!

    • Hi Mike, you are correct. Transferring ownership is the same thing as transferring LLC membership interest. However, we don’t recommend doing this yourself as it can be a little complicated. There could also be tax consequences, so you’ll want to speak to an accountant too. Having said that, here is the overview. First, via an Assignment of LLC Membership Interest, you can sell/transfer 100% of your ownership to your wife. You’ll also need to put an Operating Agreement in place and then amend the Operating Agreement to reflect the transfer of ownership. You don’t need to amend the Colorado Articles of Organization, since Members are not listed. However, you’ll need to update the IRS by changing the EIN responsible party for LLC. You don’t need to file Form 8832 with the IRS, since the tax classification of the LLC isn’t changing (it’ll remain an LLC taxed as a Sole Proprietorship). You’ll also need to update the bank and the Colorado Department of Revenue. Hope that helps.

  11. Hey Matt,

    I filed my LLC a week ago but need to add my spouse as a member. I thought that was all just on the operating agreement so I sort of messed this up. When I log into the secretary of state website to amend it to add my other half, it’s requiring me to change the name of my LLC instead of adding a member. How do I amend My CO LLC to add my spouse?

    • Also, since “members are not listed” on the Colorado Articles of Organization, is it even necessary to amend our LLC to a multiple member LLC? Or is this information ok on just our Operating Agreement?

  12. Hello,

    I’ve been thinking of forming an LLC for some rental properties. However I want to be able to still stay in the rental property myself on occasion. What are the rules for owning property through an LLC and using it for personal use at times? Thank you so much!

    Lachlan

    • From a legal standpoint, no, there are no issues. There may be some minor tax consequences, such as not maximizing write offs, however, we recommend speaking to an accountant on that.

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