This guide for how to start an LLC in Colorado will take you step by step through everything you’ll need to if you decide to setup a Colorado LLC on your own. If you’re going to take the step of setting up a Limited Liability Company, you’re going to need to make sure the Colorado Secretary of State office looks at it as a valid business entity. Before we get into all the details, it’s important you understand the services you can use to help you speed up this process and make your life easier.
I recommend you start by using these services to setup your business the right way from the beginning.
We will get into the detailed steps of how to do this on your own but Northwest Registered Agent can speed up this process and that’s why I recommend it as my #1 service for anyone looking to create a Colorado LLC.
Instead of spending all the time through the steps below to setup a Colorado LLC, you can go get some help from a professional service organization that does this.
I also love having some fantastic ideas for starting a new Colorado LLC. If you’re an outdoorsman or outdoors woman – you need to build out a Limited Liability Company that is all about outdoor adventures. Colorado is known for skiing, hiking and all the outdoor adventures you’d expect from a state like this. Go start your Colorado LLC for your adventures skiing and drinking beer!
Alright – let’s get into the steps it takes to setup a single member LLC and get the right business name configured in a way that’s going to allow you to feel like you’re following Colorado law.
Name Your Colorado LLC
The first step is to make sure you’re following whatever rules the Colorado Secretary of State’s office says about your business name. The first thing you need to do is make sure you’re searching to see if the name is available at the state before doing anything else.
You can go to the state website here:
You’re also going to need to follow the Colorado LLC naming guidelines which are:
1. The name must contain the phrase “Limited Liability Company” or one of its abbreviations (LLC or L.L.C.).
2. The name may not contain language indicating that the LLC is organized for a purpose other than permitted by state statute.
3. The name may not be the same as the name of a federal or state agency or department.
4. The name may not contain language indicating the LLC is organized for a bank, insurance company, credit union, or savings and loan association.
5. The name may not be deceptively similar to the name of another business entity on the records of the Secretary of State that would be likely to confuse the public.
6. The name may not contain profane language or language that would be considered obscene under Colorado law.
All of this means you’re going to need to put together a list of names and then check them against the state’s database to see which ones are available for you to use.
Once you’ve done all this, you can go figure out if you have a digital version of your business name. GoDaddy is the best place to check if you’re going to have your business online and whether you have more than one member or you’re just setting up a sole proprietorship – you’ll need a digital version of your business.
Choose your registered agent
Once you’ve gotten the right business name and a website/domain that you’re comfortable with, I’d recommend getting a registered agent service. There are services that you can use for your Colorado LLC but by using a registered agent service you’ll have it all taken care of.
I’ve talked about Northwest Registered Agent as a potential option but there are law firms that can do this too. I just like NW because they give you the first year of a registered agent included when you setup your LLC.
The rules you need to follow when picking a registered agent are:
1. The registered agent must be a Colorado resident with a physical address in the state or a business entity authorized to transact business in Colorado.
2. The registered agent may not be the LLC itself, unless the LLC is also authorized to transact business in Colorado.
3. An individual acting as a registered agent must sign a statement consenting to the appointment.
4. The registered agent must maintain a business office that is open during normal business hours at the registered address.
This means you need to have somebody in Colorado that can manage your LLC for you and act as the point of contact with the state. If you’re not comfortable having somebody in the state deal with this for you, don’t worry – that’s where a registered agent service can help.
If you’ve done all this then the Colorado Secretary of State is going to be happy with you and you’ll be able to feel more comfortable with the registered agent services you’ve decided to go with.
Prepare and File Articles of Organization
The next step in this process is to prepare and file your Articles of Organization with the state.
The state has a form that you can fill out and submit online or by mail/in person.
You’re going to need to include:
1. The LLC’s name and address, as well as the name and address of the LLC’s registered agent.
2. The names and addresses of the LLC’s organizers.
3. The date on which the LLC will dissolve, if not specified in the Articles of Organization.
4. Whether the LLC will be member-managed or manager-managed.
5. The name and address of each member of the LLC’s initial governing body, if the LLC will be manager-managed.
6. The signature of each organizer.
7. The date on which the Articles of Organization were signed by the organizers.
After you’ve completed and gathered all this information, you’ll be able to file online or by mail/in person. The filing fee is currently $50.
You should get a response back from the state within 2-3 weeks letting you know that your Articles of Organization have been received and processed.
You may want to submit a periodic report but typically the LLC owners are going to be responsible for making sure they’ve submitted this to the Colorado Secretary of State’s office and follow the guidelines given by the state.
Create an operating agreement
The next step in this process is to create an operating agreement for your LLC. This isn’t required by Colorado law but it’s highly recommended. An operating agreement is your playbook and operating manual for your business. If you’re going to setup a Foreign LLC, Limited Liability Company LTD or have a multiple member LLC, it’s going to be important that you’re doing this the right way.
An operating agreement is a document that sets forth the rules and regulations for how your LLC will be run.
It should include things like:
1. The names of the LLC’s members
2. The LLC’s purpose
3. The management structure of the LLC
4. How profits and losses will be allocated among the members
5. How new members can be admitted to the LLC
6. What happens if a member wants to leave the LLC
7. How the LLC can be dissolved
8.LLC’s street address
The operating agreement is an important document because it protects all the members of your LLC in the event that something goes wrong. If you don’t have an operating agreement and something does go wrong, the state’s LLC laws are going to govern how your business is run which may not be ideal.
If you’re going to be a business owner, it’s important that you feel comfortable with the LLC operating agreement and feel like you’re business partners are too. You’ll use this and come back to this when issues come up with the business structure, business liability and if you decide to put personal assets into the business – you may want to include details about that in this too.
When you’re building out your legal documents and want to have some kind of personal asset protection, this is another way of doing it through documenting it from the beginning of your journey on this creation of your Colorado LLC.
Get an EIN
The next step in this process is to obtain an EIN for your LLC. An EIN is an Employer Identification Number and it’s basically a social security number for your business. This Federal Employer Identification Number is one that will be used for so many things.
Here are a few things that you’ll want to consider using it with:
- Opening a business bank account
- Filing taxes
- Hiring employees
- Applying for business licenses and permits
- Collecting Sales Tax
You can apply for an EIN online, by fax, or by mail. The process is pretty simple and shouldn’t take more than a few minutes to complete.
Once you have your EIN, you’ll want to keep it in a safe place because you’re going to need it anytime you’re dealing with the IRS or state tax authorities.
Open A Business Bank Account
The next step is to open a business bank account for your LLC. This is important because it allows you to keep your personal and business finances separate. It also makes it easier to keep track of your business expenses and income.
When you’re ready to open your account, you’ll need to bring your EIN and Articles of Organization with you to the bank. You may also need to provide a copy of your operating agreement if you have one.
Once you have your business bank account setup, you’ll want to start using it for all of your business transactions. This will make it easier to track your expenses and income, and it will also help you build up your business credit.
Get Small Business Insurance
The next step is to get small business insurance for your LLC. This is important because it protects your business from liability in the event that something goes wrong.
There are a variety of different types of insurance available, so you’ll need to figure out which type is right for your business. The most common types of insurance for small businesses are general liability insurance and property insurance.
You can get quotes for small business insurance online or through an insurance broker. Make sure to compare rates and coverage before you choose a policy.
Get a Business License
The next step is to apply for any licenses or permits that your business needs. The type of business license you need will depend on the type of business you’re running.
For example, if you’re running a restaurant, you’ll need a food license. If you’re running a construction company, you might need a contractor’s license.
You can find out what licenses and permits your business needs by contacting your city or county clerk’s office.
File an Annual Report
All Colorado LLCs are required to file an annual report with the Secretary of State’s office. The report is due by April 15th each year.
The report must include the name and address of your LLC, as well as the names and addresses of your LLC’s managers or members.
You can file your annual report online, by mail, or in person. The filing fee is $10.
Pay Annual Taxes
The final step is to set up your business taxes. You’ll need to register your business with the IRS and your state tax authority.
You can register online, by mail, or in person. Once you’re registered, you’ll need to file your business taxes every year.
The type of taxes you’ll need to pay will depend on the type of business you’re running. For example, if you’re selling products, you’ll need to pay sales tax. If you’re hiring employees, you’ll need to pay payroll taxes.
Congratulations! You’ve now completed all of the steps necessary to start your LLC in Colorado.