Nov 3 2017

How to Form an LLC in Colorado (with Pictures) #starting #an #llc #in #colorado


How to Form an LLC in Colorado

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.”

Decide on who the members of your LLC will be. 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.

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.

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]
  • 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]

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. [5]

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.

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. [6]

  • You can simply Google “Colorado registered agent” to find a list of registered agents available for that state.

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