Step-by-Step Guide to Forming an LLC in Colorado

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Colorado LLC Quick Facts

How much does it cost to form an LLC in Colorado?

Initial LLC Filing Fee – $50

Recurring Fee – $10 Periodic Report Fee

How long does it take to get an LLC in Colorado?


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Quick Reference

The Limited Liability Company (LLC) is a popular business structure for many entrepreneurs starting a new LLC in Colorado.  The LLC provides personal liability protection for the owners and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Colorado without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.


Steps to Form a Colorado LLC

The following steps are to create a domestic LLC, which is the most common filing.  We have more information about forming a foreign LLC (an out-of-state LLC wanting approval to operate in the state) or a professional LLC (designated for LLCs offering professional services).

To get started, visit the Colorado Secretary of State website.

Forming an LLC can be both affordable and is something most people can do themselves. Entity formation companies like IncFile or IncAuthority help guide you through the process and make sure there are no mistakes.

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

Step 1: Name the LLC

Under Colorado state law, the legal name of a Colorado Limited Liability Company must include one of the following words or abbreviations at the end of the business name:

  • Limited Liability Company
  • Ltd. Liability Company
  • Limited Liability Co.
  • Ltd. Liability Co
  • Limited
  • L.L.C.
  • LLC
  • Ltd.

A unique name has to be selected as no other LLCs in the state of Colorado can have the same name.  Before finalizing a name, be sure to check on the availability of LLC names in Colorado in the state’s business database before registering.  Most LLCs will operate under the name they register with the state. If you want to operate multiple businesses under your LLC, a DBA or “Doing Business As” name will need to be registered too.  This additional name can be registered at any time by filing a Statement of Trade Name of a Reporting Entity online and submit a $20 state fee.

Before finalizing a company name, learn more about all the LLC Name Requirements in Colorado.

It is also highly recommended to check the United States Patent and Trademark Office (USPTO) to see if this name is registered to someone else. The Colorado Secretary of State will not cross-check the federal trademark database.

Related: How to do a trademark search before choosing your business name

Last, before selecting a business name, you may also want to see if a domain name is also available.

If you have an entity name selected but are not quite ready to file the Articles of Organization, you can reserve the name for up to 120 days by filing the Statement of Reservation of Name form.  There is a filing fee of $25 for the name reservation.

How to Form a Colorado LLC

Step 2: Principal Office Address

In this section, enter the street address, city, and zip cost of the initial principal office.  This address can be the LLC’s physical address, or it can be the address where the business records are stored.  You may not use a Post Office Box for the designated office.

If you prefer to use a different business address than the designated office for correspondence from the Secretary of State, enter that address in the mailing address field.  A PO Box is acceptable in this section.

CO LLC Principal Business Address

Step 3: Registered Agent

One state requirement in forming an LLC in Colorado is that a Registered Agent must be identified.  The Registered Agent is either a Colorado resident or a company such as a registered agent service that accepts service of process, which must have a “usual place of business” (commonly known as having a physical address and is available during normal business hours) in the state. Service of process refers to receiving important legal documents, tax notices, summons, subpoenas, and other legal papers on behalf of the LLC.

You can act as your own registered agent in Colorado and you are not required to pay for a registered agent.

Any individual meeting the above requirements can be the agent, however, the agent’s name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home or still employed.  Hiring a company like Northwest Registered Agent to be the Registered Agent will reduce the number of unwanted phone calls and mailings.

Colorado Registered Agent LLC

The registered agent must consent to be appointed as the registered agent, and the box has to be checked to confirm that they have agreed.

Registered Agent Colorado

Step 4: Organizer Information

The name and mailing address of the LLC organizer(s) forming the entity is entered next. If there is more than one member, be sure to click on the Yes button, and later you will add an attachment to include the names of all LLC members.

Step 5: Management

This section asks whether the management of the LLC is Manager-Managed or Member-Managed.

Member-Managed LLCs have an active involvement in the day-to-day operations of the business.
Manager-Managed LLCs refers to an LLC where the members hire somebody to run the company, similar to the position of CEO for a corporation.

Most LLCs are member-managed.

Next, you have to confirm that at least one member of the Limited Liability Company is checking the box.

Colorado LLC Member Manager Managed

Step 6: Additional Information

If there are additional items to attach regarding the LLC formation, additional information needs to be attached.

This isn’t common for most LLCs.

Colorado LLC Additional Attachments

Step 7: Effective Date

If you want the LLC to start on today’s date, choose Yes, otherwise select No, and enter a date less than 90 days in the future to start.

Some will delay the LLC start date if they aren’t ready to go but want the filing out of the way or if they are close to the end of a calendar year and want to delay until the following year so they won’t have to file business taxes.

Colorado LLC Delayed Effective Date

Step 8: Email Addresses

An email notification can be sent instead of paper notices when a form has been filed, when the status of a record has changed, and when the Periodic Report or renewal is due.  The Secretary of State no longer sends a reminder in the mail for the annual LLC renewal. Failure to file the periodic report in time can result in penalties and administrative dissolution. Be sure to make a reminder in your calendar.

CO Articles of Organization Email

Step 9: Signatures

Each member of the LLC must certify the information in the Articles of Organization are correct and sign.

All members can sign this document, but only one is required to do so.  If other members want to sign, upload their names and signatures as an attachment on the next page.

CO LLC Signatures

Step 10: Upload Attachments

If you selected to upload additional attachments, they would be uploaded here.

Step 11: Review and Pay

Review the Articles of Organization for any errors, and if there are no errors, all that’s left is to submit payment. On the summary page, be sure to print a copy of the approved Articles of Organization for your records.

If you have questions, contact the Colorado Secretary of State.
Colorado Secretary of State
Phone: 303-894-2200

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Tasks After Forming An LLC

After the registration process is finalized, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare a Colorado LLC Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

Most states do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, leading to costly disputes in the future.

Related: Colorado operating agreement template

Obtain an EIN

The EIN or Employer Identification Number (also called a Federal Employer Identification Number or FEIN) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, register for business licenses and permits, file tax returns, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

Related: How to Apply for an EIN

Elect the LLC’s Form of Federal Income Taxation

One of the major benefits of the Limited Liability Company is the tax flexibility it provides.  When applying for the Employer Identification Number, you will choose the classification of how the business entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:

  • Sole proprietorship
  • Partnership
  • C-corporation
  • S-corporation

While this may sound confusing, this refers to how the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, LLCs are pass-through entities. Instead of the LLC paying taxes on profits, the profits or losses flow through to the members.

Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can elect to be taxed as a C-corporation or an S-corporation.

Multi-member LLCs will be default be taxed as a partnership. The members can elect to be taxed as a C-corporation or an S-corporation.

In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership.  As a result, the owner will pay income tax and self-employment taxes on all business profits.  As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes.  Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings.

Before electing how your LLC will be taxed, be sure to talk with an accountant to assess which one will be best for you.

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Depending on the LLC age, a Colorado Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be various business licenses and permits to register before starting. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing before they can start.
  • Professional License – Certain services such as barbershops, accountants, salons, and others must be licensed.
  • Sales Tax License – To sell products and certain services, registration with the Colorado Department of Revenue will be necessary.
  • Wage Withholding Account – Businesses hiring employees, will need to register with the Colorado Department of Revenue.

Related: What Business Licenses are Needed in Colorado?

File Annual Reports

LLCs must file annual reports (referred to as a periodic report) with the Colorado Secretary of State.  The annual filing fee is $10 is the periodic report updates ownership information and other details.

Periodic reports are due during the three-month period beginning with the first day of the anniversary month of your LLC’s formation. For example, if the LLC was formed on January 12, the report would be due each subsequent year between January 1 and March 31.

Related: How to File a Colorado LLC Periodic Report


Common Questions When Starting An LLC

You can act as your own registered agent, provide you are a resident of the state and are generally available during normal business hours. 

It’s sometimes thought that the LLC and business license are the same, which they aren’t.  Business license requirements vary by location and the type of business being operated. 

An out-of-state LLC wanting to do business in another state will have to register as a foreign LLC with the new state’s Secretary of State.

Businesses that require state licensing and offer professional services such as accountants, attorneys, podiatrists, physical therapists, acupuncturists, etc. often must file as a Professional Limited Liability Company (sometimes referred to as a Professional LLC or PLLC) instead of an LLC. Filing for a PLLC is very similar to that of the LLC.

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