When starting a business in Colorado, one has many options. One can be a sole proprietor, a partnership, incorporate, or choose to become a Limited Liability Company or LLC. Limited Liability Companies combine many of benefits a sole proprietorship has, such as simplicity and taxes but provides the legal protection that a corporation affords. Forming an LLC has certain requirements specific to Colorado. Here’s how to start an LLC.

Getting Started

As the prospective owner of a new business, it’s important to understand what the company does and how its name will reflect on it. Company names are a form of branding, which is why it is important to create a name that describes the products as well as the vision of the owner. The prospective LLC owner will need to name the LLC and establish the registered agent. The prospective owner or member must then file the articles of organization and pay the fee.

Naming the LLC

Spend some time considering what the company name will be.  This will often be the client’s or customer’s first impression of the company.  Choose a name that is not registered in Colorado, nor can it be a name of a state or federal agency. Choose a name that has an available domain name so that the domain name can be registered to the company.

Naming Guidelines in  Colorado

When naming a company it must contain the words “Limited Liability Company,” “LLC,” or “L.L.C.”  This is included so it is obvious what type of company the name represents. As said above, the name must be unique and not taken by another company in Colorado. Unless the company is a particular type of company, such as a bank, or if the company has licensed individuals such as lawyers or doctors, the owner cannot choose the restricted words that would identify the business as such. Should the owner choose to use these words. the State of Colorado will require additional paperwork.

As stated above, the prospective LLC owner cannot use prohibitive words such as the names or acronyms or state and federal agencies.

Is the Name for the LLC Available in Colorado? (How To Search)

Before submitting a name, the prospective LLC owner or member should see if the name is available in Colorado.  The prospective owner  should navigate online to Name Search and enter the name.  If no name appears in the search, it may be available.

Is the domain name available?

All businesses should have an Internet presence with a unique domain name. Now is the time to reserve the domain name.  Many registrars can help the prospective business owner look to see if the domain name is available. Choose the name and suffix that fits the LLC.

Select a Registered/ Statutory Agent

The next step is selecting a registered/ statutory agent.

What is a Registered Agent?

A registered agent is the point of contact for the LLC to the State of Colorado. The registered agent will have a registered street address so the State of Colorado can send official information to the LLC.

Who can be a Registered Agent in Colorado?

Only a State of Colorado resident or a corporation authorized to operate in the State of Colorado can be a registered agent.

File Articles of Organization

The State of Colorado calls the Articles of Organization the Incorporation of Domestic LLC. The prospective LLC owner must file the Incorporation of Domestic LLC to create the LLC.  The prospective owner will fill out a form and pay a fee.

Link to Download

The link to download the Incorporation of Domestic LLC form is Articles of Organization.

Fee

There is a non-refundable fee of $50USD.

Create Operating Agreement

The State of Colorado does not require the prospective owner or member to create an operating agreement to register an LLC.

Running Your Business

Getting Your EIN

What’s an EIN?

An EIN is an employee identification number, issued by the Internal Revenue service. Sometimes it is also called a Federal Tax Identification Number. It’s a unique number issued to each business.

You’ll need an EIN to

  1. Open a business bank account.
  2. File Federal and State Taxes
  3. Hire employees.

Before you get your EIN:

  1. Make sure your new business has been properly formed before applying.
  2. Be wary of paid sites. EINs are free direct from the IRS.

How do I get an EIN?

  1. Apply online: The easiest way is to apply online for an EIN. Note, the IRS website has office hours, and is only available Monday through Friday, 7am to 10pm. Yes, we also agree this is one of the most ridiculous things we’ve ever seen.
  2. Call: You can call 1-800-829-4933, between 7am to 7pm of your time zone, Monday to Friday.
  3. Snail Mail – You can download the form and mail it in.

Keep Business and Personal Accounts Separate

  1. Get a business bank account for your business. This will help you protect your personal assets from potential creditors and lawsuits, and will also make life A LOT easier come tax time.
  2. Get a business credit or debit card. This will help you keep your expenses separate and easier to track.

Accounting

No matter what business you run, accounting software and processes is a must for any small business. If you have an accountant, ask them which software they work with and recommend.

A good accounting system is necessary to:

  1. Track income and expenses, so you can easily see if you’re making money
  2. Makes filing income taxes so much easier.

Always try and find something that will:

  1. Sync with all of your bank and credit card accounts automatically – not just downloads, but auto sync.
  2. Automatch vendors, customers and other accounts.
  3. Let you accept credit cards and ach drafts with ease.

Setting Up for Taxes in Colorado

 

Selling Stuff?

If the company is a retail establishment, Colorado requires the company to file for a sales tax license. Businesses selling taxable goods or services need to register for the sales tax at CO Sales Tax .

Links to relevant taxes and what to do for Colorado

Businesses must register for applicable federal, state, and local permits at CO Permits. If the business has employees, business owners must register their business for employees withholding tax at CO Withholding and unemployment insurance tax at CO Unemployment.

Insurance

All businesses should have insurance in the State of Colorado. The business must register for workers compensation insurance at CO Workers Comp if there are any employees, and obtain general liability insurance.

Keeping Your LLC Compliant

Business owners must keep the LLC in good standing with the State of Colorado to do business. To obtain a Certificate of Good Standing, the business can request it online at: CO Certificate.

Annual Report

To maintain good standing, the LLC owners must file an annual report with the Colorado Secretary of State.

Cost

$10 USD.

Links

Business owners may file an annual report online at CO Annual Report .

Deadlines

Business owners need to file the annual report within a 3 month period starting 1.5 months before and 1.5 months after the date in which the LLC was formed.

How to File a Foreign LLC in Colorado

Business owners of a Foreign LLC are encouraged to do business in Colorado. The foreign LLC owners must file a foreign LLC in Colorado.  For more information see: CO Foreign LLC.