How to Form an LLC in Colorado

Co-authored by Clinton M. Sandvick, JD, PhD

Last Updated: January 31, 2023 References

A limited liability company (LLC) offers business owners a certain level of legal protection from personal liability for business debts and claims.^{[1]
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Research source} You can form an LLC in the state of Colorado under the State's Statute 7-80, known as the Colorado Limited Liability Company Act.^{[2]
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Part 1

Part 1 of 2:

Preparing to Form an LLC

1
Select the name of Your LLC. You'll have to select a name that's not in use. You can check to make sure that the name of your LLC is not in use with the Colorado LLC Search Tool. Keep in mind that one of the following terms must be in the name of your LLC:
- "Limited Liability Company"
- "Ltd. Liability Company"
- "Limited Liability Co."
- "Ltd. Liability Co."
- "Limited"
- "L.L.C."
- "LLC"
- "Ltd."
The owners of an LLC are called "members." They're the people who have a financial interest in the company that goes well beyond the interest of an employee or a customer.
3
Select a manager for the LLC. A manager is effectively the chief executive officer (CEO) of the company. He or she is the one who will set the strategic direction of the company and oversee day-to-day operations from an upper management perspective.
- The manager of the LLC doesn't have to be a member, but it's generally a good idea.
4
Distinguish between member-managed and manager-managed LLCs. In Colorado, you can choose to have either a member-managed or a manager-managed LLC. Choose the option that best fits the management structure you want.
- In a member-managed LLC, all of the members (owners) of the LLC will actively participate in the management and operation of the business. This is the most common selection and is particularly prevalent when you are creating a single-member LLC.^{[3]
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- Select a manager-managed LLC if some of your owners are merely passive investors who will not (or do not want to) be involved in the day-to-day operation of the business. If you are a sole-member LLC, you may select this option if you are going to hire someone else to run the business while you become a passive investor.^{[4]
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5
Create an operating agreement. An operating agreement is written to cover the economic and governance structure of your LLC. It is akin to having articles of incorporation, bylaws, and shareholder agreements wrapped into one document. It may even include a statement of social purpose.
- In Colorado, an operating agreement may contain any provision dealing with the affairs of the LLC. Once you write an operating agreement, your LLC will be bound by its terms.
- You may enter into an operating agreement before, during, or after, you file your articles of incorporation.
- except in the case of single member LLCs, an operating agreement does not need to be in writing. Therefore, in most cases, you may choose to either write or not write the agreement out.
6
Apply for an EIN Number. Your business is a separate legal entity. As such, it will need its own tax ID or Employer Identification Number (EIN). Apply for a EIN Number from the IRS. If you are selling goods or collecting taxes, you might need to register your EIN and LLC with the Colorado Department of Revenue.
- If you own and operate a sole member LLC, which means you are the only person managing and working for the LLC, you do not need an EIN.
7
Select a registered agent. A registered agent is a legal representative in the state who can receive legal notices for the business on your behalf. You can be the registered agent for the LLC if you live in the state of Colorado. Otherwise, you're going to need to find someone else to be a registered agent on your behalf.^{[5]
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- You can simply Google "Colorado registered agent" to find a list of registered agents available for that state.
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Part 2

Part 2 of 2:

Forming the LLC

You'll find an online form that you need to complete at the Secretary of State's Site.
2
Fill in the field for the company name. You'll enter the name that you decided on above and then click "Next."
- If you select a name that's already in use, the system won't let you proceed any further.
3
Complete the principal's office name and address. The principal is generally the name of the person who's forming the LLC. If that's you, then enter your business name and address here.
- If your business address is the same as your personal address, you can just enter your personal address here.
If you selected a registered agent in the step above, then you'll fill in that information in this section. Otherwise, you can enter the principal's name and address.
5
Complete the section on the "true name and address" of the person forming the LLC. You entered your business address two sections above. Here's where you'll enter your personal address.
- It's okay to duplicate information if your business address is the same as your personal address.
If the LLC is member-managed (meaning one of the members will manage it), then check the radio button that reads "Members." If you're planning on hiring a manager who isn't a member, check on the radio button that reads "Manager."
Your LLC should have one member at a minimum, so just check the box.
8
Select the appropriate option if you have additional documents to upload. There might be some legal or identification documents that you'll need to complete your LLC registration process. If so, select "Yes" here and you can upload those documents during the next step.
- Examples of additional documents include articles of organization, articles of amendment, and an operating agreement.^{[6]
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- Chances are very good you won't need to upload any documents. You'll probably only need to do that if somebody from the Secretary of State's office told you that additional documentation is required.
You'll probably want to form your LLC immediately. If that's the case, then you don't need to take any action under the "Delayed Effective Date" section. However, if you want to put off your LLC formation for another month or so, just click the "No" option and enter the effective date.
If you want the Colorado Secretary of State to notify you from time to time about due dates or events affecting your business, select "Yes" under "Email Address" and enter the appropriate email address.
Yes, there's yet another section for the "true name and address" of the person who's filing the document. Enter that information in the last section.
Instructions for various principals may vary at this point.
You'll be prompted for payment options when you're finished completing the form. As of this writing, the payment fee is $50.
Every year, your LLC is required to file annual reports with the Secretary of State. The report must state your LLC's name and any changes you have made to the entity since you last filed (e.g., if the agent's name and address have changed). While the information contained in these reports is minimal, it is very important you file them on time.

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Highly recommended to have a LLC Operating Agreement.

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Need to be at least 18 years old.

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