When you consider creating a business in Colorado, it is necessary, as a first legal step, to create an LLC. That is a legal form of protection for the entrepreneur and a way to legitimize the business before clients and administration.
Let’s know the main steps to take into account in this process.
Steps to create an LLC in Colorado
Some fundamental steps simplify the entire process of creating an LLC in Colorado. Let’s go through all these steps detailing the most important ones.
Name and registration of an LLC in Colorado
It is necessary that you choose the name of your company, that this name is not registered, and place it officially in the registry. Logically, this is a fundamental step.
The process is not complicated, but it requires time. On the other hand, it is good to remember that the choice of your business name is decisive: this will be the name with which you will launch your company into the world.
- The first phase will begin with a search for trade names in the Colorado registry. You can do this by using the official database itself from this link. This way, you can check if another company has already registered the name, you have chosen or not.
- The next stage will generally be to check if the domain of your chosen business name is free on the internet. Multiple comparators allow you to determine if dominions are free and their cost. Before you even consider hosting your website, you need to have a domain name. Choosing the right URL is very important nowadays.
- As in the previous phase, it is important that you thoroughly check the possible composition of your social networks. Keep in mind that sometimes the domain may not exist in a conventional URL, but there are social networks that carry your business name.
Once you have done the above, you can proceed to the registration. There are a few things you should keep in mind about the name:
- You must necessarily incorporate in the term the acronym LLC.
- You cannot incorporate terms that confuse the business model: INC, CORP, etc.
- If you use the name of a company or institution, you must previously consult with such institutions and have the corresponding license.
- If you use a trading name similar to an existing one, your application may be rejected.
Finally, an important thing to remember is that although the name may change in the future, it is a relatively complex process.
Colorado Registered Agents
That is another important step. All LLCs in Colorado must designate a registered agent. That entity or person is prepared to receive taxes, documents, forms, and official correspondence.
- This can be the business owner or a designee. The conditions for a registered agent are:
- Maintain a physical address in Colorado (P.O. Box is not acceptable; 3.
- Be available during normal working hours (to receive official documents).
Although it is possible to be your registered agent, some companies offer their services as registered agents. The latter offers anonymity and certain agility in the processes in exchange for a cost (usually monthly).
Legal filing (articles of organization)
Although the previous steps are very important, this one is relevant. That is the documentation in which the LLC is formed as an entity. This documentation, along with your application, carries a $50 fee.
Generally, the simplest filing formula is through the internet, as you can check in this link. On the other hand, you must consider the articles of organization you must submit together with the necessary documentation: you can find everything in this official list.
Colorado LLC Operating Agreement
That is another very important phase of documentation. This is a document in which you will establish the operation of the business or company structure. Generally, this documentation should explicitly incorporate a response to the following aspects:
- How the company is going to be organized.
- What the administration and voting formulas will be.
- How and by whom capital contributions are to be made to the incorporation of the company
- How the distribution of profit and loss is to be made
- How partners may be added to or withdrawn from the company
- How it will be liquidated in the event of a closing.
It should be remembered that, in Colorado, you must also submit an operating agreement to that effect in the application if you have a sales tax license in the state.
Obtaining the EIN
That would be the last step in creating the LLC in Colorado. In this step, it is necessary to apply for the Employee Identification Number (EIN). This social identifier is used to control the company’s tax return.
On the other hand, in addition to tax purposes, this identifier is used for hiring employees, opening and contracting financial services such as bank accounts, and separating the personal identity of the founder(s) from the company’s legal identity.