Business owners often form their company as a limited liability company (LLC) structure to protect their personal assets. However, in order to operate as an LLC, you have to register your company as one. Colorado has its own specific rules for registering a company as an LLC that you need to know about if you want to have an LLC in this state.
To create an LLC in Colorado, you will first need to check to see if the name you want is available. The business name that you choose must include phrases like “ltd.”, “ltd. liability co.,” “ltd. liability company,” “limited”, “l.l.c.”, “limited liability co.,” “llc”, or ”limited liability company.”
In addition, you will need to appoint a registered agent that either lives in Colorado or has a usual place of business in the state. The company needs to have at least one member, and you must decide if the business will be run by said member(s) or by managers.
Besides these requirements, there may also be a number of forms, documents, and other items that need to be completed and submitted in order to operate as an LLC in the state of Colorado. Various decisions also need to be made by the LLC members regarding the name of the company as well as its focus. These documents can be complex and may require the assistance of a legal professional. This will help to ensure that the documents are submitted on time and that no items are missing.
For companies based in Colorado, a person may form an LLC by filing Articles of Organization for the LLC online at the Colorado Secretary of State website. When filling out the form, you will have to list the name and address of the company, the name and address of the registered agent, and the name and address of the person forming the LLC.
You will also need to state whether members or managers will be running the company. Your registered agent must also confirm that they are willing to serve in this position for your LLC by consenting on the Articles of Organization paperwork.
Businesses that were previously formed outside of Colorado who want to register in the state have to file a Statement of Foreign Entity Authority. The information that must be included on the form is the Colorado Secretary of State ID number, where the company was formed, the address of the company, the name and address of the registered agent and the day the company will begin business in Colorado. A business will also be required to file a True Name form if they are required to pick a new name to do business in the state if their original name is unavailable.
The state of Colorado allows anyone filing Articles of Organization the option to delay the effectiveness of the paperwork for up to 90 days. Thus, you can file your paperwork even if you are not quite ready for your LLC to be fully functional at that moment in time.
The LLC business structure provides a company with the benefit of reducing its owners’ personal liability if it is sued. This is because an owner’s personal assets are not included if the company has to pay out a settlement or debt to someone.
In addition, the more streamlined nature of the LLC business form can also make it quicker and easier to make certain business decisions and implement them rapidly. This can be an advantage for businesses that need to pivot on a certain project without too many delays.
There are also various tax benefits with LLCs because they utilize a “pass-through” tax system. This means that all profits are taxed only once through the member’s individual taxes. This is different from a corporation, which can often have a double tax for all profits in the through both the member’s personal information taxes and the corporation’s taxes.
In Colorado, all LLCs need to file a Periodic Report annually, or else they will be listed as “noncompliant”. After two months of being noncompliant, an LLC’s status will then be changed to “delinquent”. Once declared under a delinquent status, an LLC in Colorado cannot sue anyone in court to collect on an unpaid debt.
While LLC members are generally shielded from the liability of the company, they are not immune from liability stemming from their own personal negligence or violations. This is the meaning of “limited liability”; the members may still be liable, but in a limited way depending on the legal issue or statute in question.
Having assistance from a Colorado business lawyer when forming an LLC can be very important. A business lawyer in your area can make sure you are following the correct rules to form your LLC, so that your business is protected.