Colorado LLC Registration: Everything You Need to Know
Colorado LLC registration is a fairly straightforward process. However, there are some key steps that you need to be aware of. Before you file for LLC formation, here's what you should know. 3 min read
Forming an LLC in Colorado
Colorado-based LLCs are easy to form and affordable. This type of business offers protection both legally and in terms of personal liability. This means that if any claims are made or debts are accumulated, owners are protected on a personal level.
Just like other states, Colorado does have some unique requirements when forming a limited liability company. To form an LLC in Colorado, you will need to file under the Colorado Limited Liability Company Act. When forming your LLC, you will first need to select all associated members — otherwise known as the LLC's owners. This will be all the individuals who have a financial interest in the company itself.
Next, select a manager. This individual will act as the LLC's CEO, remaining focused on the company's strategic direction. The manager will also oversee all of the daily operations. Although LLC managers do not need to be members, it is ideal if they are.
Colorado LLC Registration: Name Your LLC
When starting an LLC, selecting a name is one of the most important steps. To decide upon a name, you will need to conduct a thorough search. This will help you determine whether or not your name is unique. When following the Colorado naming guidelines, please be mindful of the following:
- Your name must include the words "limited liability company" or LLC.
- There are a number of other abbreviations that are also accepted, including Ltd. and L.L.C.
- There are certain words that are restricted for use, including any name that could be confused with a state or federal agency.
- To begin, conduct a Colorado name search here.
- If you determine that the name is available, you can reserve it for 120 days.
- To do so, file a Statement of Reservation of Name with the Colorado Secretary of State.
Colorado LLC Registration: Choose a Registered Agent
You are required to nominate a registered agent for your LLC. This individual will represent the company, receiving and sending all legal documentation. To be eligible, a registered agent must be a Colorado resident or corporation who is authorized to do business in the state of Colorado. You have the option of hiring someone within the company, including yourself.
Colorado LLC Registration: File the Articles of Organization
In order to complete your Colorado LLC registration, you will need to file the articles of organization.
- First, decide if your LLC will be managed by members or a manager.
- A member-managed setup is common among single-member LLCs and multi-member LLCs (where all members would be actively involved).
- Manager-managed LLCs is ideal when some of the owners are passive investors.
- The articles must include all relevant information, including the name and address of the LLC, the name and address of the registered agent, etc.
- This paperwork is filed online for a fee of $50.
- Processed in real-time, the approval process typically takes between seven to 10 business days.
Colorado LLC Registration: Create an Operating Agreement
Although not required, it is good practice to have an operating agreement with the state of Colorado. This legal document will outline all owner responsibilities. If your LLC has more than one member, this is a particularly important step. This agreement will cover the following:
- The economic and governance structure of the LLC
- Bylaws, articles of incorporation, and shareholder agreements
This step can take place anytime before, during, or after you submit your articles of organization.
Once you have created this agreement, you will need to apply for an employer identification number (EIN). This will be used to identify your company with the IRS. You may also require this number when opening a business bank account. You can obtain an EIN for free in one of two ways:
This step is required if your LLC has more than one member — even if the company does not have employees. If you own a single-member LLC, you will only need to obtain this number if you hire employees or seek corporate election for taxation purposes.
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