Updated February 7, 2024

How to Start an LLC in Colorado

The things you have to do are not so different when you start an LLC in other states. But there are a few additions.

Let's start with your business name.

Is Colorado a good state to have an LLC?
Colorado would be a great place to register your LLC. This is thanks to the state's many incentives that help small- to medium-sized companies thrive. And forming an LLC in the Centennial State can offer additional benefits that informal business structures cannot.

1. Name your LLC

Since LLCs are considered separate legal entities, you'll have to register a business name when filing your formation documents.

And while LLCs enjoy more flexibility for their business names, you still need to follow certain rules when picking out one.

You can check the complete list of Colorado's naming regulations for business entities for your reference. But here are the general naming requirements:

Must be unique to your business (i.e., no other company has already registered the name)
Cannot be confused with another registered business in the state (you also can't use articles, suffixes, abbreviations, etc., to create distinctions)
Should indicate its business entity type (i.e., contains terms like "LLC," "L.L.C.," "Limited Liability Company," etc.)
Shouldn't indicate or imply an association with government agencies (local, state, or federal)
Cannot imply a business purpose other than what's registered in its official documents
Must not suggest that your company engages in any illegal or criminal activities

You can check if your preferred business name is still up for grabs using the state's Name Availability Search function.

Reserving your LLC name:
You can reserve your chosen business name if you're not ready to form your LLC yet. Just file a Statement of Reservation of Name through the Secretary of State's website. They've also listed the complete instructions for your reference.

Take note that business name reservations in Colorado last for 120 days. But you can renew it if it expires. Just file a Statement of Renewal of Reservation of Name through the same site.

Fictitious names or DBA in Colorado:
You'll still need to register an official business name even if you already use a DBA (aka "trade names" in Colorado).

Unfortunately, you can't convert your existing trade name into your business name. So, you'll have to withdraw and refile the name with your Articles of Organization.

Then, just file a trade name application if you want to use a DBA for transactions.

How much does it cost to register an LLC in Colorado?
The state filing fee for domestic LLCs in Colorado normally costs $50. But it's been lowered to $1 until June 30, 2023, thanks to recent legislation. On the other hand, registration for foreign LLCs costs $100 per filing.^[1]

Will you be using a DBA for your LLC business?

2. Appoint a registered agent

You need a registered agent if you're starting an LLC in Colorado. In fact, the state won't accept your application if you don't have one listed.

Registered agents generally act as the company's primary point of contact. They receive important documents (like legal notices, tax forms, service of process, etc.) on your behalf. They can also remind you of upcoming compliance deadlines.

Anyone can be a registered agent for your LLC as long as they meet the following criteria:^[2]

At least 18 years old (for individuals)
A resident of and have a physical street address in Colorado (PO boxes and virtual addresses aren't allowed)
Can legally conduct business in the state (if you hire third-party services)
Has a physical business address in Colorado (if you hire third-party services)
Always available during regular business hours (Mondays to Fridays, 9AM to 5PM)

You can be your own registered agent in Colorado. That's as long as you meet the criteria mentioned. Colorado is also one of the few states that allow the business entities themselves (like LLCs and corporations) to be their own registered agents.

Whoever you assign as your registered agent should also give their written consent. Be sure to read the full instructions on the state website to learn how assigning a registered agent in Colorado works.

3. File your Articles of Organization

You need to file your Articles of Organization with the Secretary of State's office. All applications should be sent online through their official website.

This will serve as your LLC's official document. And it should contain all relevant information about your business.

For Colorado LLCs, you need to include the following:

Business entity name
Official business address (can't be a PO box)
Official mailing address (if different from your business address)
Registered agent's details (name, address, contact details, statement of consent, etc.)
LLC members' information (name and mailing addresses)
Management structure (member- or manager-managed)

Once you've provided all the required information, you just need to pay the filing fee and wait for approval.

Make sure you double-check everything and that all the details are accurate. If you need to change or correct anything, you need to file your Articles of Amendment online.

Take note that foreign LLCs (LLCs operating outside of Colorado) need to file a Statement of Foreign Entity Authority instead of the Articles of Organization.

The state accepts payments made via major credit and debit cards. You can also open a prepaid account with the state if you regularly transact with them. Unfortunately, they don't accept cash and check payments.

4. Create an operating agreement

Although operating agreements aren't mandatory for LLCs in Colorado, creating one is still advisable, especially for multi-member LLCs.

That's because an operating agreement outlines and defines a company's structure and operations. This includes your members' roles and responsibilities. It can also help resolve disputes among your members.

In general, operating agreements should contain the following:

Ownership (members' details, division of company interests, roles, responsibilities, etc.)
Management structure
Distributions and dividends
Voting protocols (e.g., when adding new members or existing ones leave)
Transfer process for ownership interests
Dissolution

Since an operating agreement isn't required for Colorado LLCs, you don't have to file it with the state. Just keep it with your company's other important paperwork.

How do I dissolve my LLC when I'm done?
To dissolve a Colorado LLC, you need to file a Statement of Dissolution online. Just search for your LLC's record and follow the instructions to start the process.

5. Get the Secretary of State's approval

Once the state approves your application, they will issue a certificate proving your LLC now exists.

Unfortunately, they won't send you a physical copy. But you can access it via your company's online records. You can find it under "Filing history and documents" on the website's summary page.

This certificate will allow you to apply for an EIN, open an LLC bank account, and get the necessary business licenses and permits.

How long does it take for an LLC to be approved in Colorado?
All documents submitted online are processed as soon as the state receives them. So you can check if your application was approved almost immediately.

6. Obtain an EIN

Once your registration is approved and you have the certificate, you can apply for an Employer Identification Number (EIN). It works like a person's Social Security Number (SSN). It will be your business' unique identifier, mainly used for tax purposes.

Getting an EIN is easy. You can apply directly with the IRS online to receive your EIN immediately (if eligible). Or apply through fax, mail, or phone for international applicants.

There is an exemption, however. You can skip the EIN if you're a single-member LLC. But we still recommend getting one since you can use it for many business purposes. You can open a business bank account, hire employees, pay taxes, etc.

You can only apply for one EIN per day through the IRS website. And you can't save your progress for later. So, make sure you can finish the entire process in one go before starting.

Which legal structure are you considering for your Colorado LLC?

7. Submit a periodic report

Colorado requires all reporting business entities, like LLCs and corporations, to file a yearly Periodic Report (aka an "annual report"). This ensures that your business records are always accurate and updated with the state.

You're required to file one even if there are no changes to your company information. You can do so online by following the state's instructions.

Also, you can file two months earlier than the due date. This will help you avoid non-compliance for missing the deadline AND the $50 penalty fee for late filings.

Not filing a periodic report can result in your company losing its good standing with the government. You can lose your ability to do business in the state, especially if you receive a "Delinquent" status.

8. Pay corporate taxes (if applicable)

LLCs in Colorado are taxed like sole proprietors or partnerships by default, which are both "pass-through" entities. That means you only have to pay income taxes on the company's profits once (as part of your personal tax returns).

But Colorado LLCs can also choose to be taxed like corporations (C- or S-Corp). If you opt for this tax classification, your company must pay taxes twice (on individual and corporate levels).

Colorado's individual income tax rate is fixed at 4.40% as of 2023 (previously 4.55%). On the other hand, the state's corporate tax rate is still 4.55%.

What the Experts Say

CreditDonkey asked a panel of industry experts to answer readers' most pressing questions. Here's what they said:

Bottom Line

Colorado has a highly business-friendly environment, making it one of the best states to start an LLC in. Just follow these 8 steps to do so.

Keep in mind the state's unique requirements to avoid delays, mistakes, and rejections. And be sure to read the full instructions on their site when you begin.