The cost to starting an LLC in Colorado has been reduced to $1. This fee reduction will remain in place until June 30, 2022.
We’ll explain this new reduction in LLC costs in Colorado as well as other costs required to keep your LLC in good standing.
How much does an LLC cost in Colorado?
Typically, it costs $50 to form an LLC in Colorado. But right now, it only costs $1.
The state passed the Colorado Business Fee Relief Act (House Bill 22-1001), and this reduced the fee to start a Colorado LLC from $50 to $1.
This went into effect on July 1, 2022. And it will remain in effect until June 30, 2023.
In order to form an LLC in Colorado, you need to file a form called the Colorado Articles of Organization (this is what you’re paying
$50 $1 for). Once your Articles of Organization is approved, your LLC officially goes into existence.
In addition to the Articles of Organization fee, there are other costs to be aware of when forming a Colorado Limited Liability Company (LLC).
Costs to forming a Colorado LLC
There is a $1 (one-time) fee to form an LLC.
There are also ongoing fees (like a $10 Annual Report fee), which we discuss below.
LLC Costs in Colorado
|Articles of Organization|
|Registered Agent||$0 or $125 per year|
|Operating Agreement||Free on our website|
|EIN Number||Free from the IRS|
|Periodic Report||$10 per year|
Colorado LLC Articles of Organization Filing Fee ($1)
Starting an LLC in Colorado costs
$50 $1. This is the state filing fee for a document called the Colorado Articles of Organization.
The Articles of Organization are filed with the Colorado Secretary of State. And once approved, this is what creates your LLC.
The $1 fee is a one-time fee. You don’t have to pay any monthly (or annual) fees to start your Colorado LLC.
The state of Colorado doesn’t have any options to file this document by mail. You can only file the Articles of Organization online.
Note: LLCs are the most common business structure used in Colorado. They are the most popular business entity because they offer liability protection for the LLC Members (owners).
This article does not apply to the filing fees for a Foreign LLC in Colorado.
Colorado business name cost ($0)
Naming your Limited Liability Company doesn’t cost anything. The Colorado Secretary of State doesn’t require you to file a Name Reservation as part of the LLC formation process.
Your Colorado LLC Name is approved (at no extra cost) when your Articles of Organization is approved by the state.
How much does a DBA cost? ($1)
The fee is usually $20, but it’s been reduced to $1 until June of 2023.
A DBA (aka Trade Name) needs to be renewed every year and the cost of renewal is $5.
Tip: You aren’t required to get a DBA for your LLC. It’s optional. For more information, read our article: Do I need a DBA for my LLC?
Colorado Registered Agent Fee ($0 or $125/year)
Colorado law requires you to designate a Registered Agent when forming your LLC.
A Colorado Registered Agent is a person or company who receives legal documents and state notices for your LLC. A Registered Agent needs a street address in Colorado and should generally be available during normal business hours.
There is no additional cost ($0) if you will be your own Registered Agent, or have someone you know be your LLC’s Registered Agent.
However, you have the option of hiring a Registered Agent Service. This will cost you about $125 per year. But Registered Agent companies offer other helpful business services and can protect your privacy.
Hiring a Registered Agent Service is a good idea if:
- You don’t have an address in the state (Colorado law requires Registered Agents to have a physical address in the state)
- You want to keep your address off public record (depending on which company you hire, you may be able to use their address to keep your address private)
LLC Operating Agreement Fee ($0)
A Colorado LLC Operating Agreement is a written contract between the LLC Members. Operating Agreements include detailed information about LLC ownership and operating procedures. For example, how the LLC is managed, and how profits are distributed.
Single-Member LLCs and Multi-Member LLCs should draft an Operating Agreement, keep it with their business records, and give a copy to each Member.
Most websites charge $50 – $200 for LLC Operating Agreements.
Here at LLC University®, we offer free LLC Operating Agreement templates for all types of LLCs.
LLC EIN Number Fee ($0)
An EIN Number is also known as an Employer Identification Number (EIN) or a Federal Employer Identification Number (FEIN).
This number is used to file income taxes, to open an LLC bank account, and to hire employees (if applicable).
Although many websites charge a service fee to help you get an EIN for your LLC, it can actually be done for free.
You can obtain an EIN for your LLC from the Internal Revenue Service (IRS) at no cost. The online filing can be completed in a few minutes.
Colorado LLC Annual Report Fee ($10/year)
The name for the LLC Annual Report in Colorado is called the Periodic Report.
The state requires you to keep your LLC’s information up to date by filing a Colorado Periodic Report every year.
This keeps your LLC in good standing and in compliance with state law so it can continue operating. You simply confirm the information on your Periodic Report, file it with the Colorado Secretary of State, and pay the Periodic Report filing fee.
The Colorado LLC Periodic Report costs $10 per year. These filing fees are paid every year for the life of your LLC.
Note: Other business entities file other reports, but LLCs just file the Period Report each year.
Colorado Business Licenses and Permits Fees (varies)
Colorado doesn’t have a state general business license, so there’s no fees or requirements for this. But your business might need an industry- or occupation-specific license from the state.
Learn more about Colorado Business License requirements.
And you may need a local business license or business permit from your municipality (county, city, town, etc.).
This varies by location, but you can contact your local government to see if there are any licensing requirements for your business.
If your business needs to collect sales tax in Colorado, you’ll need to get a Standard Retail License (aka Sales Tax License) from the Colorado Department of Revenue.
In summary, the costs for your business license requirement (or business permits) will vary depending on location and industry, but usually the fees are not very high.
LLC Taxes (varies)
There are many different types of Colorado LLC taxes that owners must pay, so this annual cost varies widely.
Some of the taxes LLC owners pay include:
- Federal income tax
- State income tax
- Local income tax
- Business taxes
- Self employment taxes
- Sales and use tax
- Payroll tax (if you have employees)
- Property tax (if the LLC owns property)
Your Colorado LLC taxes depend on your industry and amount of business activity, so we’re not able to provide an estimate. Every business is different, and your specific circumstance determines what taxes apply to your LLC.
Note: By default, a Single-Member LLC is taxed like a Sole Proprietorship. And a Multi-Member LLC is taxed like a Partnership.
Hiring an Accountant
How much your small business pays in taxes is best determined by working with a qualified accountant in Colorado.
The amount you’ll pay your accountant will vary. However, most accountants will charge between $300 per year for a simpler tax return, or up to $900 for more complicated filings.
Note: We recommend speaking with a few accountants in Colorado to make sure they can help you meet all your federal, state, and local tax obligations. We offer detailed tips on How to Find an Accountant.
Colorado Secretary of State
If you have any questions about the cost of opening a Colorado LLC, you can contact the Colorado Secretary of State.
Their phone number is 303-894-2200. And their hours are Monday through Friday, from 8am to 5pm, Monday Time.
Colorado LLC Cost FAQs
The Colorado LLC fees also include annual report fees and taxes.
The Periodic Report is due every year and it costs $10.
This $10 Annual Report fee is paid to the Colorado Secretary of State. You have to pay this to keep your LLC in good standing and have the right to conduct business in Colorado.
However, some people may want to hire an attorney if their LLC has a complex ownership or management structure, has investors, or requires industry-specific documentation.
A business attorney usually charges between $800 and $2,500 to form a Colorado LLC.
However, if you want to save time and make sure your LLC is filed correctly, we recommend hiring Northwest Registered Agent.[llcu-cta id="30037" label="Northwest - LLC - Save Time" /]
Northwest has excellent customer service and they include Registered Agent services free for the 1st year. They also offer other services, like an Operating Agreement and filing your Annual Report. Northwest has plenty of experience forming Colorado LLCs.
For more details, please see how long it takes to get an LLC in Colorado.
This means if you have a Single-member LLC, you’ll have an LLC taxed as a Sole Proprietorship.
And if you have a Multi-member LLC, you’ll have an LLC taxed as a Partnership.
S-Corporation taxation can save you money on self-employment taxes. However, it only makes sense once your business has established revenue and you’re making at least $70,000 in net business income per LLC Member.
And C-Corporation taxation is rarely used by small business owners.
What do most people do? Most people leave their LLC taxed in its default status (taxed as a Sole Proprietorship or taxed as a Partnership). Then once their business makes consistent revenue and profit, some people check with their accountant to see if S-Corporation tax treatment makes sense (meaning, they make sure the extra cost of S-Corp tax setup and maintenance can justify the potential self-employment tax savings).
- Choose an LLC business name and make sure it’s available
- Choose who will be your Colorado Registered Agent
- File the Colorado Articles of Organization
- Complete and sign an LLC Operating Agreement
- Get a Tax ID Number (EIN) from the IRS
- Open an LLC business bank account
Colorado Secretary of State: Fee schedule
Colorado Secretary of State: News Release Nov 1, 2021
Colorado Secretary of State: News Release Jan 20, 2022
Colorado Secretary of State: News Release Jul 1, 2022
Colorado General Assembly: HB22-1001 Reduce fees for business filings