How to Form an LLC in Colorado

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Video Transcript:

Hey, folks, Matt Horwitz at llcuniversity.com. I hope you’re doing well. How to form an LLC in Colorado. I’m going to run through the five steps with you. Don’t worry, I’m not cheating. I actually wrote this. Notes are really helpful for me. We teach in all 50 states. Rather than keeping all of this stuff memorized in my head, I don’t want to sound like an idiot, so I’m going to read this off to you. If you don’t know what an LLC is, it is a type of legal business structure that’s created under state law. This video is specific to Colorado. There are five steps to forming an LLC in Colorado. Let’s run through them. First, you’re going to choose your LLC name. We’ll go into more details in a second. First, you’re going to choose your name. Number two, you’re going to select your LLC’s registered agent. I’m going to debunk a lot of myths there. Number three, you’re going to file the articles of organization with the Colorado Secretary of State. The cost is $50. Step four, you’re going to complete an operating agreement. Step five, you’re going to get your LLC’s EIN. Then after your LLC is formed, there is two more steps: filing the Periodic Report and filing your state taxes. Let’s start with step #1: choosing a name for your Colorado LLC. I’m just going to go through the highlights here. You need to have the abbreviations LLC or L.L.C. at the end of your name. You cannot use the words Corp or Inc or Incorporated or Incorporated at the end of your name. You can’t use the words like Bank and Insurance or any of the restricted names. We have another video on our channel and on our website that walks you through how to search the Colorado Secretary of State Business Entity Search to make sure that your desired name is distinguishable. Some other tips when choosing a business name: make sure that’s creative, try to pick a name that’s easy to spell and short, not something really long because that’s going to make your domain name. Anytime someone mentions your business, it’s going to be really confusing. Try to pick a name that has a positive connotation and shows your business in a good light. The link for the Colorado Business Entity Search is either below this video or on our website, depending on where you’re watching it. If you have any questions, just call the Colorado Secretary of State phone number below this video. The second step, after you’ve found your name, is to choose your LLC’s registered agent. Most people are massively misinformed when it comes to choosing a registered agent. So many other websites lie and hide the fact that you can be your own registered agent. They say things like, “Your LLC is required by law to have a registered agent,” period. They don’t tell you, “Yes, that is the law, but in Colorado, Colorado is unique. Your own LLC can serve as its own registered agent, and you can be your own registered agent. A friend or family member can be the LLC’s registered agent. The only requirement is that they have a physical street address-no P.O. box-a physical street address located in the state. If you don’t have a friend or a family member or you yourself that have an address in the state, then we recommend that you hire a commercial registered agent. We recommend Northwest Registered Agent, the best company in the business in my opinion, $125 a year. All that information if below. Really, a registered agent is just a fancy name for a person or a company who agrees to accept of service of process, which is legal documents like a subpoena or a complaint or a summons, in case you get sued. Hopefully, you don’t. They just agree to accept that on behalf of the LLC. That’s what a registered agent is. For most of you, that cost is going to be $0. Don’t believe all the hype and bullshit you see in the internet. Third step is filing your formation documents with Colorado. In Colorado, it’s called your articles of organization. Colorado is a very affordable state. It’s $50 to form an LLC in Colorado. It can only be done online in Colorado. Colorado is very unique and very advanced. You cannot form your LLC by sending the docs in the mail. It’s all done online. You’ll pay with a debit or a credit card. The articles of organization is pretty simple. They’ll have the name of your LLC, your name, your address, the registered agent’s name and address. We have another video that will walk you through step-by-step exactly how to file that with the state. The coolest thing about Colorado is when you file online, your LLC is literally is instantly approved at the end vs. a lot of other states where you have to wait days or weeks for approval. Colorado is definitely up there in the books as one of the top states. Once your LLC articles of organization are approved at the state, the next step is to complete your operating agreement. The operating agreement is a contract between the members of an LLC. It’s still good to have even if you have one member for liability. Reasons: it basically spells out who owns the LLC, how much of the LLC do they own, how are taxes, how are profits and losses distributed, etc. You can download a free operating agreement template from our website and just fill in the blanks. It’s super easy. Again, we have another video on that. That’s your operating agreement. Then you’re going to get your EIN. This is step 5. Your EIN, employer identification number, it’s also known as your federal tax ID number. They’re all teacher same thing. Think of it as a social security number but for the business. It identifies your business with the IRS. You’re going to use it to pay taxes, open a bank account, handle employee payroll, and you might need it for some business licenses and permits. This is completely free, $0. You can get it from the IRS via their online application. We’ll walk you through that step-by-step. Takes about 15 minutes. The only thing you want to make sure, is make sure that your LLC is approved before you get your EIN. A lot of people make a mistake of they get the EIN at the same time they’re doing to LLC, they’ll do it ahead of time, and they get the EIN attached to the wrong LLC name or they think they’re doing it correctly but they end up getting the EIN for themselves. There’s just a Sole Proprietorship, and then their assets aren’t protected. Anyways, getting your EIN is really simple. It’s really straightforward. IRS website; takes 15 minutes. We’ll walk you through it step-by-step. That’s pretty much all it takes to form an LLC in Colorado: 50 bucks. It’s ridiculous. It’s online. It’s very fast. After your LLC is formed, you have two things to take care of. These are called post-formation requirements or how do you maintain your LLC. The first one is called, in most states, it’s called an annual report. In Colorado, it’s called a Periodic Report. It’s due once a year. The annual fee is $10. Come on, it’s ridiculous. Colorado is such an awesome state. Again, this is filed online with a debit or a credit card. You have this thing called your periodic month. Think of this as a fancy word for your anniversary month. If your LLC was filed in June, June is your anniversary month. So every year, that’s your periodic month. You can file your Periodic Report during that month, two months before or two months after. You basically have a five-month window to file that, pay the $10. If you miss that five-month window, you have an additional 60 days where you can file. You have to pay a $50 late fee. Then if you miss that, your LLC goes into a delinquent and non-compliant status, and eventually you can’t do business in Colorado. Then you need to file your Colorado state taxes. Form 104 is the form in Colorado. Pretty simple. Just have your accountant or tax professional make sure you file your taxes every year. Those are the only two things you need to do to keep your Colorado LLC in compliance. Other than that, let us know if you have any questions. Hopefully, that simplifies the process of the five steps to form an LLC in Colorado. Again, Colorado is one of my favorite states just because it’s all online. It’s super easy. It’s quite affordable. Check out the other videos on our channel. Check out the videos on our website. We’ll walk you through everything for free step-by-step. No hook; no catch. All right. Let us know if you have any questions. Hope this information is helpful for you.

Forming a Colorado LLC: An Easy How-to Guide

How to Form an LLC in ColoradoThe 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:

  1. Choose a Name for your LLC
  2. Select your LLC’s Registered Agent
  3. File your LLC’s Articles of Organization
  4. Draft and sign your LLC’s Operating Agreement
  5. 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:

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

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)
Email: [email protected] (they reply very fast)

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:

  • Visa
  • Mastercard
  • 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:
http://www.sos.state.co.us/biz/FileDoc.do

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:

Free LLC Operating Agreement (PDF)
Free LLC Operating Agreement (Google Docs)
Free LLC Operating Agreement (Microsoft Word)

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

Check out Avvo or Nolo if you need legal help.

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:

https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

For any questions relating to the online application, you can contact the IRS here:

Phone: 800-829-4933
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:

  • VISA
  • Mastercard
  • 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:

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

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)
Email: [email protected] (they reply very fast)

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.

Matt Horwitz
Founder & Educator, LLC University®
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! LLC University® teaches people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your business journey.
Leave a Comment (8) ↓
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.

8 Comments

  1. Elizabeth Lind-Hoff October 12, 2018

    do you have to file your periodic report in the year you form your company or do you start on your anniversary?

    reply
    • Matt Horwitz October 12, 2018

      Hi Elizabeth, your first Period Report will be due the year following your LLC’s year of formation. So if your LLC was approved in October 2018 (aka your “Period Report Month”), your first Period Report would be due in 2019. Your “filing window” would be five months in total; 2 months prior to the Periodic Report Month, the Periodic Report Month itself, and 2 months after. So broadly speaking, between August and December of 2019. More details can be found here: Colorado LLC Period Report. Hope that helps!

      reply
  2. Justin November 5, 2018

    Just wanted to say this article was extremely helpful, I was finally able to set up my LLC after a long time of not knowing where to start, thank you! Although, I will say if I wanted to get a good CPA for my business tax filing, where would be a good place to start?

    reply
    • Matt Horwitz November 23, 2018

      Hi Justin, that’s awesome to hear! You’re very welcome :) Please see this article: how to find an accountant. Hope that helps.

      reply
  3. Destiny January 17, 2019

    Thank you so much for this information! I was able to form my LLC in CO thanks to these very helpful resources. Very straightforward, thank you thank you!

    reply
    • Matt Horwitz January 18, 2019

      Hi Destiny, that’s fantastic to hear :) You’re very welcome!

      reply
  4. Kris January 19, 2019

    You made this super simple! Thank you so much.

    reply
    • Matt Horwitz January 22, 2019

      Awesome! You’re welcome Kris :)

      reply

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