Last Updated 16 October 2017 | By:

How to Form an LLC in Colorado

7 Simple Steps

How to Use this Guide

Use our free guide below to form an LLC in Colorado or have a reliable service do it for you:

IncFile ($49 + state fee) for basic & quick LLC formation.

LegalZoom ($149 + state fee) for the most popular LLC service available.

Harbor Compliance ($399 + state fee) for ongoing compliance & top-bottom formation.

Step 1) Verify & Secure Your Brand Name

Choose a Business NameYou’ve got a great idea, but you need an equally great name to represent it. Choosing the right name for your Colorado LLC is as important for brand-building as it is for legal purposes, so your business name should:

  • Differentiate you from the competition. Your name must legally be “distinguishable”, meaning it cannot be already in use or sound too similar to an existing business name in Colorado.
  • Contain the words “Limited Liability Company” or one of the following abbreviations: “Ltd. Liability Company”, “Limited Liability Co.”, “L.L.C.”, “Ltd.” or “Limited”.

 

What To Do:

First things first, check whether your desired name is available by doing a name search through the Colorado Secretary of State. It’s not the most user-friendly website, so we recommend bookmarking the link for easy access.

Before you make a firm decision on your LLC name, we recommend heading over to GoDaddy to make sure that a decent URL is still available. Having an easy-to-locate, user-friendly website is pretty crucial, so we recommend sorting out your domain name during this first step.

Step 2) Appoint a Colorado Registered Agent

Choose a Registered AgentNow it’s time to appoint a registered agent to represent your LLC. A registered agent is the person or entity responsible for receiving and handling legal documentation like state filings, tax forms and service of process notices on behalf of your business.

You’ll be asked to provide your registered agent’s name and address on the Articles of Organization, so it’s important to elect one ahead of time. You are allowed to act as your own registered agent in Colorado, but there are a few things you should keep in mind before taking on this responsibility:

  • You must be a permanent resident of Colorado.
  • You’ll have to release your business address, which means making your personal address public if you work from home.
  • You may risk being served in front of family, friends, customers or coworkers.

 

What To Do:

Have a look at our registered agent guide if you’re interested in acting as your own, or handing the job off to another member of your LLC.

If you’re not interested in taking on the task yourself, you can hire a professional cheaply and easily through a filing service like IncFile. IncFile actually offers your first year of registered agent services for free when you form your LLC with them, which is a much better deal than paying around $160/year through typical registered agent providers.

Step 3) File Articles Of Organization

Register an LLCYour Articles of Organization must be filed with the state of Colorado to establish your business as an official LLC. The document will ask for some key pieces of information, including:

  • The name and purpose of your business
  • Your registered agent’s name and street address
  • The name and mailing address of the individual forming the LLC
  • The management structure of the LLC

These are the basics, but we highly recommend checking out the detailed instructions on the Colorado Secretary of State website.

Luckily, you can take care of the entire filing process online. Simply head over to the SOS business filing page, enter your preferred business name and go from there. Keep in mind that you’ll also have to submit a $50.00 filing fee!

 

What To Do:

If you’re looking for a zero-hassle option, you might seek out the help of an online business formation service. They’ll take the reigns on the formation process and make sure your Articles of Organization are filed perfectly. Most of these companies also offer other helpful services for newly formed businesses, like registered agent services, extra document filings, corporate kits and much more. Take a look at our top 7 business filing services to find out about our favorite providers’ pricing and features.

Quick Note: You’ll have to submit an initial report within 6 months of your business’ formation, and an annual report each year. If you choose to file on your own, make sure to mark the deadlines on your calendar! It’s really easy to forget this step, so we love that most online formation services notify you ahead of time.

Step 4) Obtain EIN

Get an EIN for Your LLCAn EIN, or Employer Identification Number, is a unique identifier for your business (like a social security number) that allows you to open a business bank account and properly handle state and federal taxes. You’ll need to apply for an EIN if:

  • You plan to hire employees
  • Your business has more than one member
  • You wish to be taxed as a corporation

Sounds a little intimidating, we know — but it’s actually the simplest step in the whole process. You can easily obtain an EIN free of charge through the IRS Website.

 

What To Do:

Since it’s really not too much of a challenge, we recommend simply applying for an EIN yourself via the IRS online application. Again, it’s totally free, and you’ll get your 9-digit identification number as soon as you’re finished. However, if the online approach isn’t your cup of tea, check out our EIN guide for alternative options.

Step 5) Draft an Operating Agreement

Create an Operating AgreementIf you’re the only member of your LLC, you can move right along to step 6. As for the rest of you, listen up: having an operating agreement is the only surefire way to avoid disputes and maintain control of your business if and when you run into issues.

While it’s not a legal requirement in Colorado, it’s wise to create a document that outlines:

  • Each member’s title and responsibilities
  • Profit and loss distribution
  • The percentage of the company each member owns
  • What will happen if a member decides to leave

…and some other important logistical details about your company.

 

What To Do:

The two most reliable and cost-effective approaches to designing an operating agreement are as follows:

  1. If you’re already planning on using an online filing service to form your LLC, simply add an operating agreement to your package.
  2. Use an online operating agreement template. Check out our top 3 LLC operating agreement templates for our recommendations!

Step 6) Open a Business Bank Account

Best Business Bank AccountWhether you’re a single or multi-member LLC, you need to keep your business finances separate from your personal bank account. Otherwise, you could run into a number of issues down the road, including:

  • Tax trouble
  • Increased risk to personal assets
  • Inability to take advantage of business banking perks

Opening a designated bank account for your business expenses is a crucial step on the road to smart financial management.

 

What To Do:

Depending on your location, you can shop around local banks like Alpine and Bank of Colorado, and credit unions like Public Service Credit Union. If you find that the offerings from local banks aren’t satisfactory, check out a few national banks like Wells Fargo. Many of them actually offer some pretty fantastic small business perks.

As always, do your research. Make sure you’re choosing a bank that offers the most important features for your business. This may be online banking, ATM locations/access, customer support, fee structures or small business incentives. To get started, check out our Wells Fargo review or read up on some of our other favorite business bank accounts.

Step 7) Handle LLC Taxes & Licensing

Business LicensesColorado doesn’t issue general business licenses, but there are quite a few instances that call for specific permits, licenses and taxes at a local, state or federal level. Here’s a list of key resources for each:

  • Federal: The Small Business Association website has tons of helpful information on federal tax requirements and federal licenses and permits. The business taxes page on the IRS website is also an excellent resource.
  • State: You can apply for state-specific permits and licenses via the CO Department of Regulatory Agencies. They provide a list of all the professions that require specific licensing and direct you to the corresponding application and other resources.
  • Local: For municipal tax and licensing requirements, contact your local chamber of commerce.

Keep in mind that LLCs are considered pass-through entities, so the responsibility of paying federal taxes on the profits falls directly upon LLC members. Some states impose separate taxes on LLCs, but Colorado doesn’t!

 

What To Do:

If you’re feeling intimidated by this step, a business license service is a great solution. They’ll determine everything that’s required of your business on a federal, state and local level, get the forms for you and even provide filing instructions!

Need Help Forming an LLC?

How To Form An LLC Online

If you’ve got the time to do all the proper research, it’s totally possible to form your Colorado LLC on your own.

However, tons of new business owners seek out professional assistance to make the formation process easier and more streamlined. If you’d like some help forming an LLC in Colorado, read through our reviews of the three best services available!