How to Form a Colorado Limited Liability Company
A Limited liability company can be a valuable entity type for starting a business or maintaining and protecting personal assets. A Limited Liability Company is an entity that provides protection to all assets not owned by the LLC.
It is an efficient way to protect personal property from a risky business opportunity. To establish a limited liability company, you must abide by the rules and process of filing with the state, the entity will be formed in.
When forming an LLC in Colorado you must file articles of organization with the Colorado Secretary of State. This will require you to compile all the necessary information for the filing ahead of time to improve the ease of process. A licensed Colorado LLC lawyer will help you better understand this process, but the general process includes.
Step One: Name your LLC
- An LLC name must be distinguishable from other business entities already filed with the Colorado Secretary of State.
- The name must include the words Limited Liability Company, Ltd. Liability Company, limited liability co., ltd. Liability co., limited, L.L.C., L.C., LLC, or LC.
Step Two: appoint a registered agent who will accept service on behalf of the LLC
- This person will be the known contact for the business.
- They must be located in the state of Colorado.
- The Agent does not need to be a person, the agent can be an entity such as an organization, business, estate or trust.
- If the agent is an individual person, they must be 18 or older.
Step Three: decide who you want the LLC to be managed by
- Can be member-managed: where all the members participate in the decision-making process.
- Can be manager-managed: where the LLC has one or more managers who make business decisions, and members do not participate in day-to-day business management.
Step Four: File the Articles of organization that must include.
- The LLC name.
- The LLC address.
- The registered agents name, address, and consent to act as agent
- Management type
- At least one member
- Name and address of the person forming the LLC
Step Five: Draft an operating agreement
- This is not a mandatory step but it is highly recommended to draft a clear operating agreement.
- This document will establish how the LLC will be managed and run, specifically it will establish the rights and responsibilities of managers and members and gives you the opportunity to change the default LLC rules to fit your needs.
Step Six: File annual reports
- An established LLC needs to file and maintain reports with the Secretary of State on an annual basis.
This process can be confusing and complex at times. Don’t go through it alone. A Colorado LLC attorney at Baker Law Group can help you determine what management structure best fits your needs, assist throughout the filing process, and advise and draft a well-suited operating agreement for your LLC.