Colorado LLC Costs
Business owners benefit when they form a limited liability company in Colorado. An LLC is a business structure that provides even small businesses and entrepreneurs with liability protection, special taxes, incentives, and a flexible work structure. Many believe that forming an LLC in Colorado is an expensive and cumbersome process. However, it is actually a simple process that is affordable for most people.
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Costs to start an LLC in Colorado
LLC Articles of Organization ($50)
Colorado periodic report fee ($10)
- A periodic report fee is also known as an annual report fee.
- You will file the periodic report online with the Colorado Secretary of State.
- The annual fee is $10, and it is due within a four period around your LLC anniversary date. It starts two months before the formation date and two months after.
- Failing to file the Colorado periodic report will result in a $50 fine and possibly involuntary dissolution.
Colorado registered agent fee (varies between $50 to $300)
- You must appoint a registered agent when you form an LLC in Colorado.
- By appointing a registered agent, you are letting the Colorado Secretary of State know someone is available during business hours to accept tax notices and other critical services.
- In Colorado, anyone can act as a registered agent as long as they meet the state requirements. That includes yourself.
- The LLC cost to appoint a registered agent in Colorado will depend on the commercial agent service, LLC needs, and state filing fees.
Fees to form a foreign LLC in Colorado ($100)
- When you have an existing LLC in another state expanding into Colorado, you will need to register as a foreign LLC.
- You will complete the Statement of Foreign Entity Authority online and submit it to the Secretary of State.
- The cost of registering a foreign LLC in Colorado is $100.
LLC name reservation fee ($25)
- Colorado does not require you to reserve an LLC name before the formation process.
- But, when registering an LLC name, you are ensuring that no one else can reserve and register the same LLC name.
- In Colorado, all LLC names must be unique and completely distinguishable from other company names in the state.
- You can reserve an LLC name in Colorado for up to 120 days before formation.
- You will complete the name reservation form online and submit it to the Colorado Secretary of State.
- The filing cost to reserve a Colorado LLC name is $25.
DBA filing fees in Colorado ($15)
- The business-related term DBA means ‘doing business as.’ A DBA, or an assumed name, is any name an individual or business uses to operate that is not the legal name.
- Colorado requires LLCs to register a DBA if they use a name for a business that is not the company’s legal name.
- A Colorado DBA does not have to be unique and must meet the state requirements.
- You will file your DBA online using the Colorado Secretary of State trade name filing system.
- The filing fee for a DBA in Colorado is $15.
Cost of certified document copies ($0)
- You will use the certified copies of documents search to locate the record you wish to order copies of.
- The state of Colorado does not charge for certified LLC document copies.
Colorado Certificate of Good Standing ($0)
- Banks and money lenders in Colorado will mandate that you present a Certificate of Good Standing before allowing you to open a bank account.
- You will order your Certificate of Goods Standing online using the Colorado Secretary of State website.
- Colorado does not charge for a copy of your LLC’s Certificate of Good Standing.
Foreign LLC name reservation fee ($25)
- If your foreign LLC name is already taken in Colorado, you must register a new LLC name.
- You will use the Colorado SOS entity name database to reserve your foreign LLC name.
- The LLC filing fee to reserve a foreign LLC name is $25.
Steps to start an LLC in Colorado
Choose a business name
When deciding on an LLC name in Colorado, you will want to consider a few things.
- An LLC name in Colorado must be unique and available for use.
- LLC names in Colorado must meet all state naming requirements.
- It is always a good idea to check web domain availability to keep branding and marketing easy.
You will use the Colorado Secretary of State business database search to conduct a name search to check availability.
LLC name reservation fee
In Colorado, you are not required to reserve an LLC name before the formation process.
You will reserve the Colorado LLC name online. LLC name reservation is valid for up to 120 days before formation.
The cost to reserve a company name in Colorado is $25. An LLC name is good for up to 120 days. Colorado does not require you to reserve an LLC name.
Appoint a Colorado registered agent
When forming an LLC in Colorado, you must appoint a registered agent.
The price for a Colorado registered agent or service varies between $50 and $100 a year. The cost depends on the state and your LLC needs.
A registered agent in Colorado is an individual or business entity that receives tax forms, legal documents, subpoenas, civil notices, service of process, and other official government correspondence on behalf of a sole proprietorship, corporation, or LLC.
The registered agent you choose must be a Colorado resident or a registered agent service authorized to conduct business in the state.
- Starter Plan – $39 a year plus State Fees
- Pro Plan – $149 a year plus State Fees
- Premium Plan – $249 a year plus State Fees
ZenBusiness has a stand-alone registered agent service for Colorado LLCs. The price is $99 per year.
- Total Out The Door Colorado LLC Formation Service Package – $40 a month and includes:
- Colorado State Fee
- Filing Service Fee
- Registered Agent
- Tax ID
- Annual Plan – $225 plus State Fees a year
- Economy – $79 plus $153 CO filing fees
- Standard – $329 plus $153 state filing fees
- Express Gold – $349 plus $255 state filing fees
File Colorado Articles of Organization
You must file Articles of Organization with the Colorado Secretary of State when you decide to form an LLC.
You will file your LLC’s Articles of Organization online using the SOS filing system.
The LLC cost to file Colorado Articles of Organization is $50.
However, from July 1, 2022, to June 30, 2023, the cost to file Articles of Organization is $1.
The state of Colorado does not offer any expedited LLC services.
The Articles of Organization will ask for specific information about your Colorado LLC.
- LLC name
- Registered agent information
The fee in Colorado for filing the LLC Articles of Organization is $50.
Get a Colorado LLC EIN
An Employer Identification Number, or EIN, can also be referred to as a Federal Employer Identification Number (FEIN) or Federal Tax ID Number (FTIN).
The Internal Revenue Services issues a 9-digit EIN. It acts as a Social Security Number for companies for income tax purposes.
When you convert a sole proprietorship to an LLC, you must apply with the IRS for an EIN.
Applying for an EIN is a simple process online through the IRS website.
Business banking for a Colorado LLC
Financial institutions always recommend that you open a business bank account that is separate from your personal bank account. Forming an LLC in Colorado will protect personal assets and future credit scores.
In Colorado, banks will require an LLC owner to submit a copy of the LLC’s Articles of Organization, operating agreement, and EIN before allowing you to do business banking.
Business banking accounts are generally free, and do not have additional charges or fees.
Business attorney fees in Colorado
By retaining a business attorney, you are keeping the LLC formation process simple and accessible. You will also have someone available to handle any business-related issues that may come up later.
In Colorado, business attorneys typically offer free consultations for first-time clients.
On average, a business lawyer in Colorado will cost $300 per hour.
LLC taxes in Colorado
- In Colorado, LLCs are considered pass-through entities. As the owner of the LLC, you will pay personal taxes rather than the company’s tax return.
- The Colorado state tax rate is 2.90%, and the max local and county rate is 8.30%.
- Colorado has an annual franchise tax of 4.63% of annual income.
- You must register for a seller’s permit if you sell physical products in Colorado.
- When hiring LLC employees in Colorado, you must register for the Unemployment Insurance Tax with the Colorado Department of Labor and Employment.
- You must also register for Employee Withholding Tax with the Colorado Depamrtner of Revenue Taxation Division.
- You can help ensure that you do not miss important deadlines, accrue penalty fees, or face possible dissolution by hiring a tax expert.
Business licenses and permits in Colorado
The total price of business licenses and permits will vary depending on where the company is located and the type of business.
You will visit the Colorado Department of Regulatory Agencies to locate the business licenses and permits you need to operate your business.
A business licence in Colorado varies between $15 to $300. The total cost of permits and licences will depend on where your LLC is, and the type of LLC.
Local government agencies in Colorado will have different license processes and rules. You will want to contact the office to inquire about the process, price, and office hours.
Different Colorado LLC formation documents will require a notarization from a notary public.
If you cannot locate a notary, most government agencies have one in the office.
According to Colorado law, a notary public can only charge a max of $5 per act.
Employer obligations in Colorado
- In Colorado, you have several employer obligations when hiring employees.
- According to federal law, you must verify that all employees are eligible to work in the US using Form I-9 from the USCIS Website.
- You must enroll in worker’s compensation insurance.
- In Colorado, you will report all new hires to the Colorado New Hire Reporting Employer Services Portal.
- You can find a complete list of the Colorado employer obligations using the Colorado Department of Labor and Employment website.
Benefits of a Colorado LLC
- Business banking is easier when you form an LLC in Colorado. LLC formation helps to protect future liability. And, banks will require that you open separate personal and business banking accounts.
- Corporations and LLCs have different compliance requirements. Incorporations must answer to shareholders and stock owners when they make business decisions.
- All LLCs in Colorado are considered pass-through entities. Owners file personal tax returns rather than the LLC’s tax returns.
- Forming an LLC helps you to avoid double-taxation. C-corporations are double-taxed while LLCs are not.
- LLC formation in Colorado is highly affordable. It only costs $50 to file your LLC’s Articles of Organization.
- Colorado has state-specific incentives that are available to LLCs. The Colorado Credit Reserve (CRR) and Colorado Microloans are available to LLCs in the state.
How long does it take to register an LLC in Colorado?
You can only file Colorado LLC registration online. The Secretary of State processes that registration instantly.
How do I dissolve my Colorado LLC?
The only way to avoid ongoing costs and state fees is to file articles of dissolution with the Colorado Secretary of State.
Colorado does not charge for LLC cancellation.
Does Colorado have a publishing requirement for LLCs?
Some states, such as Nebraska and Arizona, require additional publishing requirements for LLCs in the state.
But, Colorado has no publishing requirements for limited liability companies in the state.
Can I take money out of my LLC in Colorado?
You will not get a yearly salary or wages when you form a single-member LLC. Instead, you pay yourself from your company’s profits. The practice is called an owner’s draw.
In Colorado, it is legal to write yourself a check from your LLC’s bank account and transfer that money to your personal bank account.
Do I need a business operating agreement for my LLC in Colorado?
In Colorado, an LLC is not required to submit a copy of an operating agreement. But, it is always a good idea to have one on file to avoid future misunderstandings.
Banks and money lenders will require you to present a business operating agreement to do business banking.
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