Colorado LLC Fees: Everything You Need to Know
An LLC, or limited liability company, is a type of business that offers limited liability to the members and Colorado LLC fees may apply. 5 min read
Colorado LLC Fees
An LLC, or limited liability company, is a type of business that offers limited liability to the members and Colorado LLC fees may apply. However, LLC members are not liable for any debts or losses incurred by the company.
Steps to Creating an LLC in Colorado
Step 1. Choose a Name
The first step is to choose a business name for your LLC. The name, as you might very well know, should be different and unique from any current business names being used. In order to ensure that the name you want is available, you can search the Colorado Secretary of State (CO SOS) business name database. A name can be reserved for up to 120 days by filing what is called a Statement of Reservation of Name with the CO SOS.
Step 2. File the Articles of Organization
You will then file the Articles of Organization online with the CO SOS. Included in this document should be the name of the LLC, address, name/address of the registered agent, and the members of the LLC. A $50 filing fee applies.
Step 3. Appoint a Registered Agent
Every Colorado LLC is required to have a registered agent acting on behalf of the LLC for legal purposes. Therefore, in the event that your LLC is sued, your registered agent agrees to accept the legal papers. There are some things to keep in mind regarding your choice of a registered agent, including:
- The registered agent, if an individual, must be a resident of the State of Colorado
- The registered agent, if a business, must have its principal place of business in Colorado
- The registered agent, if a foreign entity, must be authorized to conduct business in Colorado and have a usual place of business within the state.
Step 4. Prepare the Operating Agreement
While this form is not a requirement in Colorado, it is highly recommended. This document essentially outlines the ownership and operating procedures of your company.
Step 5. Taxes and Filing Reports
There may be additional tax requirements for your LLC, including the following:
- Employment Identification Number (EIN). If your LLC has more than one member, then you must obtain an EIN from the IRS, even if you hire no employees. However, even if you are the sole member of the LLC, you may be required to obtain an EIN if you have employees or choose to have your LLC taxed as a corporation instead of a sole proprietorship. There is no filing fee.
- Registering with the Department of Revenue. If you sell goods and collect sales tax on those goods, or if you have employees, you must register your LLC with the Colorado Department of Revenue.
- Additional business licenses. Depending on where your business is located and industry in which your LLC operates, you may be required to file for additional business licenses.
- Periodic Reports. Colorado LLCs must file a periodic report on an annual basis. It is to be filed online, and a filing fee of $10 applies.
- Foreign LLCs. If you operate a foreign LLC and conduct business within the State of Colorado, you must register with the CO SOS in order to conduct such business. A $100 filing fee applies.
Step 6. Opening a Business Bank Account and Credit Card
Once you have completed steps one through five, you’ll want to open a business bank account to keep track of your finances. You should also open a business credit card, which can help your business’s credit in the event that you want to apply for a loan in the future.
Step 7. Get Accounting in Order
This step is important. You want to make sure that you have a proper accounting system in order. Even if you have yet to open for business, this step is crucial for the future success of your company. Having a well-organized accounting system in place can help you keep track of your outstanding orders and transactions, bills that are due to you from clients, as well as any expenses that you are responsible for on a monthly basis. Keep in mind that some account systems sync to your credit card and bank accounts so that you can keep track of all of your finances in one place.
Step 8. Obtain Business Licenses
You want to make sure that you are well aware of any other business licenses or permits that you need to have before selling your products or services. Not only do you have to comply with Colorado state government rules, but you also need to comply with federal and local rules as well. For example, if you are opening a restaurant, you’ll need additional permits, including building and health inspection permits. Keep in mind that additional fees will apply for each license or permit that you are required to obtain.
You can find additional information on the CO SOS website for state licenses. For federal licenses, you can review the U.S. Small Business Administration guide. For local rules, you can contact the municipality and speak to someone who can assist you with what you are searching for. If you don’t have the time to dedicate, you can always use a professional service to do the legwork for you.
Step 9. Get Insurance
This is another important step. For those Colorado LLCs who intend to hire employees, you’ll need to obtain workers' compensation insurance, which is a form of insurance that covers an employee should he or she be injured on the job.
Frequently Asked Questions
- What’s the actual process like?
The process is rather straightforward. As previously noted, the process begins with the filing of the articles of organization. You will then choose a registered agent, and simultaneously obtain an EIN if required. Once you’ve obtained your EIN, you can open a bank account/credit card, and include all fees into your accounting books. If you’re going to be operating your LLC in a brick-and-mortar shop, you may need additional zoning permits to operate out of that location. You will also need to ensure that all other business licenses and permits are obtained before selling your product(s) or services.
- What does an LLC formation service include?
Should you choose to hire a professional to do the legwork for you, the following documents will be handled:
- Articles of Organization
- The state filing
- Initial Resolution
- Operating Agreement
- State filing fees
- Registered Agent service
Therefore, there is very little required by you, except to provide the professional with all necessary payments for filing, including permits, licenses, and additional fees for the work being done on your behalf.
- How much does a Colorado LLC cost?
An annual LLC report will only cost you $10. Therefore, it is rather inexpensive to keep up with the annual LLC report. However, any additional permits or licenses may need to be renewed every so often, sometimes even annually. So, make sure that you incorporate these costs into your accounting books.
There are many requirements and steps to take when creating a Colorado LLC. Most importantly, you’ll want to know what fees are associated with your LLC, including any filing fees and obtaining licenses or permits. If you want to learn more about business license fees associated with your Colorado LLC, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.