How to Form an LLC in Colorado

Forming a limited liability company (LLC) in Colorado offers business owners the advantages of limited liability protection and operational flexibility. This comprehensive guide provides a step-by-step breakdown of the process to help individuals successfully establish an LLC in Colorado. It also includes specific information on costs associated with each step.

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Step 1: Select a Name for Your LLC

Select a unique name for your LLC that complies with Colorado's naming requirements. The name must include "Limited Liability Company," "Ltd. Liability Company," "Limited Liability Co.," "Ltd. Liability Co.," "Limited," "L.L.C.," "LLC," or "Ltd." The words "Limited" and "Company" can be abbreviated as "Ltd." and "Co." respectively. Ensure the name is distinguishable from existing business entities by searching the Colorado Secretary of State's business name database. To reserve an available name for 120 days, file a Statement of Reservation of Name online. The filing fee is $25.

Using a trade name, also known as a fictitious business name, DBA (doing business as), or assumed name, is an option. File a Statement of Trade Name of a Reporting Entity online with the Colorado Secretary of State. The fee for filing a trade name is $20.

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Step 2: Designate a Registered Agent

Select a registered agent for service of process in Colorado. The registered agent can be an individual resident of Colorado, a Colorado business entity with its principal place of business in the state, or a foreign entity authorized to do business in Colorado with a usual place of business in the state.

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Step 3: File Articles of Organization

Create your Colorado LLC by filing Articles of Organization with the Colorado Secretary of State. The articles must include the LLC's name, street address, registered agent's name and address, the name and address of the person forming the LLC, management structure (manager or members), a statement of having at least one member, and the name and address of the person filing the articles. File the articles online, and the filing fee is $50.

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Step 4: Create an Operating Agreement

While not required, it is highly recommended to draft an LLC operating agreement. This internal document outlines how the LLC will be managed, the rights and responsibilities of members and managers, and other essential provisions.

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Step 5: Get an EIN

If your LLC has multiple members or employees, obtain an IRS Employer Identification Number (EIN). Single-member LLCs only need an EIN if they have employees or elect corporate taxation instead of a sole proprietorship. Apply for an EIN through the IRS website. There is no filing fee.

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Step 6: File Periodic Reports

File a Periodic Report with the Colorado Secretary of State annually. The report can be filed online within a three-month period starting from the first day of the anniversary month of LLC formation. The filing fee for the report is $10. You can also sign up for email notifications from the Secretary of State to receive reminders about the Periodic Report due date.

By following the step-by-step instructions outlined in this guide, entrepreneurs can successfully form an LLC in Colorado while understanding the specific costs associated with each stage. It is advisable to consult professionals or seek legal advice when needed to ensure compliance and a smooth establishment of your LLC in Colorado.