Forming a Colorado LLC: An Easy How-to Guide
The single biggest reason why you should form an LLC in Colorado is to protect your personal assets.
A Colorado LLC, or Limited Liability Company, is a type of business entity formed under Colorado law.
An LLC gives you personal liability protection in case your business gets sued.
A Colorado LLC can do the following:
- run a business
- hold assets like real estate, boats, planes, and other vehicles
- make money
- own and lease property
- enter into contracts
- open a bank account
- sue and be sued
An LLC creates a wall of protection between your business and personal assets. Your personal assets are protected in the event your business gets sued.
There are 5 steps to forming an LLC in Colorado. They are:
- Choose a Name for your LLC
- Select your LLC’s Registered Agent
- File your LLC’s Articles of Organization
- Draft and sign your LLC’s Operating Agreement
- Get your LLC’s EIN (Employer Identification Number)
To make sure your LLC remains in good standing with the State after it’s been formed, you’ll need to:
- Filing your LLC’s Periodic Report (due every year)
- Paying your LLC’s Taxes
In this guide, we’ll show you the simple yet detailed steps to creating and maintaining an LLC in Colorado. Simple because it’s straight-to-the-point, and detailed because it has everything you need to get it right the first time.
Step 1: Choose a Name for Your Colorado LLC
When choosing your LLC name in Colorado, you have to follow certain requirements.
The abbreviations “LLC” or “L.L.C.” must be used at the end of your name. The abbreviation “LLC” is the most common.
Because an LLC is not a Corporation, your desired name should not use the word “Corporation”, “Incorporated,” or their abbreviations (“Corp.”, “Inc.”)
The name of your LLC must also be distinguishable. It needs to be unique when compared to the existing businesses found in the Colorado database.
If you want more details on how to make sure your LLC name is distinguishable, check out our free video lesson.
Tips to Picking a Great Colorado LLC Name
- Be creative
- Pick a name which is short and easy to spell
- The name should have a positive connotation so people can easily remember it
Once you think of a few possible names, you’ll need to compare them to existing businesses in the Colorado Online Database:
You can also contact the CO Secretary of State’s Business Organizations if you have further questions:
Phone: 303-894-2200 (Hours: M-F, 8:00am – 5:00pm MT)
Step 2: Choose a Colorado Registered Agent
Now that you’ve picked your LLC name, it’s time to choose a Registered Agent.
A Registered Agent is an individual or company who will accept delivery of legal documents (legal mail, notice of lawsuits, etc.) for your LLC. Your Registered Agent must have a street address located in Colorado.
Important: PO Boxes are not allowed. The Registered Agent must have a street address.
If you have a street address in Colorado, your options are:
- You can be your CO LLC’s Registered Agent
- Your LLC can serve as its own Registered Agent (a law unique to Colorado)
If you do not have a street address in Colorado:
- A friend or family member can be your CO LLC’s Registered Agent
- Hire a Commercial Registered Agent in Colorado
If you need more details on how to choose a Registered Agent, check out our free video lesson here.
If you need to hire a Commercial Registered Agent, we recommend Northwest Registered Agent ($125 per year).
Northwest Registered Agent has built a solid reputation as a trustworthy and reliable Registered Agent for 20 years.
The company offers affordable rates and has excellent customer service.
Step 3: File Your LLC’s Articles of Organization with the Colorado Secretary of State
Important: Forming an LLC in Colorado can only be online (you cannot file by mail).
Your LLC’s Formation Documents need to be filed online on the state’s website.
The CO LLC Formation Documents are known as the Articles Organization.
You will also need to pay a one-time filing fee of $50 through the following accepted debit or credit cards:
- American Express
Your LLC will become an official business in Colorado once the state receives and processes your Articles of Organization. Approval is usually instant.
You can file your Articles of Organization online here:
You can then save or print a copy of your LLC’s approved Articles of Organization via the website’s Summary Page.
For LLCs which have 2 or more members, you will need to download the Additional Members Form and submit that during your online filing.
For a complete walk-through on filing your LLC’s Articles of Organization correctly, check out our free video lesson.
Step 4: Create an Operating Agreement for your Colorado LLC
An Operating Agreement is the written document that governs how you and any additional members run and operate your LLC. Unlike an LLC’s Formation Documents, your Operating Agreement does not have to be submitted to the State.
Your Colorado LLC’s Operating Agreement includes:
- your stake in the LLC
- how taxes will be paid
- how profits/losses will be distributed among members
You can download our free documents here and fill in the blanks:
You can also watch our step-by-step Colorado LLC lesson on how to fill out your Operating Agreement.
The video tutorial above covers Operating Agreements both for Single-Member LLCs and Multi-Member LLCs (2 or more members). It will also discuss other details, including:
- What other parties would want a copy of your LLC’s Operating Agreement
- How to make changes to your Operating Agreement
Important: We recommend consulting an attorney if your LLC:
- Requires industry-specific management
- Has complex ownership agreements
- Has many investors or a large amount of members
Step 5: Get an EIN (Employer Identification Number) for your Colorado LLC
Important: Make sure your LLC has been approved by Colorado first before getting your EIN. You don’t want to have your EIN attached to a non-existent LLC.
An EIN is also known as a Federal Tax ID Number or TIN (Tax ID Number).
It is issued by the IRS to identify your LLC in Colorado.
Applying for an EIN can be done through mail, fax or online. We’ll focus on the online application as it’s the fastest and you’ll get your EIN in about 15 minutes. Applying for an EIN by fax takes 4 days and applying for an EIN by mail takes up to 4 weeks. Ain’t nobody got time for that! ;-)
For the online application, you’ll use one of the LLC member’s SSN (Social Security Number).
If you’re a non-US resident, you’ll use your Individual Taxpayer Identification Number (ITIN) instead.
Foreign nationals who don’t have an ITIN yet can visit the IRS Website for information on how to obtain one.
You will be issued your EIN immediately after you’ve answered the IRS’s online application. You can then download, save and print your new EIN and the Confirmation Letter.
The Online EIN Application can be found at the IRS Website:
For any questions relating to the online application, you can contact the IRS here:
Other IRS Phone Numbers: https://www.irs.gov/help/telephone-assistance
You can also watch our free video lesson on how to fill out the IRS questionnaire.
Maintaining Your Colorado LLC After It’s Been Formed
File Your Colorado LLC’s Periodic Report
A Periodic Report needs to be filed annually with the State of Colorado. This is a legal requirement for your LLC. It ensures your LLC’s contact information is updated with the state.
The annual filing fee is $10. The state accepts only the following debit and credit cards:
- American Express
The Periodic Report can be filed 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
Important: Your Periodic Report Month is the month your LLC was approved. You can find it by looking at your Articles of Organization’s approval date.
You can file your Periodic Report online here:
Watch our free video tutorial. for more details on filing your Periodic Report.
You can also contact the Colorado Secretary of State for further questions:
Phone: 303-894-2200 (Hours: M-F, 8:00am – 5:00pm MT)
Important: You can still file your Colorado LLC’s Periodic Report within 2 months after the end of the 5-month window. But, you will be charged an extra $50 on top of the $10 filing fee as penalty. Your LLC will also be marked “Non-compliant”.
If you fail to file a Periodic Report within 3 months after your LLC has been marked “Non-compliant”, its status will be changed to “Delinquent”.
“Delinquent” status means your LLC will not able to do business in Colorado.
You should a put a repeating reminder on your calendar to avoid this.
File and Pay Your Colorado LLC’s Taxes
You will need to register your business with the the Colorado Department of Revenue.
Filing the correct documents and paying taxes can be challenging. We recommend hiring a good CPA/accountant for your tax needs.
Important: You and your CPA/accountant should be compatible. You want someone who is a good fit personally, as well as professionally. You also want someone who is patient and will take the time to answer all of your questions.
Form Your Colorado LLC Correctly
Visit LLC University’s free video course and learn how to form an LLC in Colorado: how to form an LLC in Colorado.