How to start an LLC in Colorado: Your 2025 step-by-step guide

Colorado is a popular location for new business ventures, making it an exciting time to launch your own. If you're ready to become an entrepreneur in the Centennial State, one of your initial steps should be selecting the appropriate legal structure. Whether it’s a sole proprietorship, partnership, corporation, or limited liability company (LLC), each option comes with unique benefits and legal considerations. Selecting the right structure is key to protecting your assets and setting your small business up for long-term success. For many entrepreneurs, the LLC structure is a smart choice. 

Jump to:

• Why choose an LLC in Colorado?
• New business data in Colorado in 2025
• 5 steps for creating an LLC in Colorado
• Step 1: Choose a name for your Colorado LLC
• Step 2: Choose a registered agent in Colorado
• Step 3: Complete the Articles of Organization form and file your Colorado LLC
• Step 4: Get an Employer Identification Number (EIN)
• Step 5: Ongoing compliance and required filings
• Types of LLCs to consider in Colorado
• Costs of setting up an LLC in Colorado
• LLC Taxes in Colorado
• Frequently asked questions

Why Choose an LLC in Colorado?

Forming an LLC in Colorado can be a strategic decision for new business owners. This structure provides personal asset protection similar to that of a corporation while offering the tax flexibility of a sole proprietorship or partnership. In essence, if your business encounters debts or legal challenges, your personal assets, such as your home and savings, are generally shielded from liability.

Colorado LLCs benefit from pass-through taxation, meaning profits and losses are reported directly on the owners' personal tax returns, thereby avoiding corporate taxes. Additionally, the registration process is streamlined through the Colorado Secretary of State’s office, facilitating your business setup.

Whether you're launching a tech startup in Denver or establishing a retail business in Boulder, an LLC offers flexibility, protection, and tax advantages to support your venture's success. This guide will walk you through the steps to form an LLC in Colorado, including fees, required forms and filings, tax considerations, and how to streamline your operations with accounting software.

New business data in Colorado in 2025

Colorado’s business environment is somewhat at a crossroads. While the state remains a hub for innovation, with top rankings in new business formation, educational attainment, and venture capital investment, a growing number of businesses report they are struggling with regulatory burdens. State-imposed regulations, particularly in labor, employment, and environmental policies, are seen as the top barriers to growth.

Despite these challenges, Colorado continues to position itself as a leader in advanced industries. The state is investing in sectors such as quantum technology, aerospace, life sciences, and clean energy. Programs like the CHIPS Refundable Tax Credits Program initiative aim to foster semiconductor growth, including expansion into rural areas, while federal recognition as a tech hub for quantum innovation solidifies the state’s place at the forefront of emerging technologies. 

5 steps for creating an LLC in Colorado 

Ready to form your LLC in Colorado? To get started, you'll need to select a unique business name, file the necessary documents, and secure an EIN. This guide walks you through each step of the process.

Step 1: Choose a name for your Colorado LLC

Establishing your LLC begins with selecting a unique and compliant name that reflects your business identity. Colorado has specific guidelines to ensure each business name meets legal standards.

Colorado LLC naming rules

When selecting a name for your LLC, there are state regulations you must follow:

Must be unique

Your LLC's name must be distinguishable from existing entities registered with the Colorado Secretary of State. To verify name availability, perform a search through the Colorado name availability search tool.

Must include designator

The name must include one of the following terms or abbreviations

• "Limited Liability Company" 
• "L.L.C." 
• "LLC" 
• "Ltd. Liability Company" 
• "Limited Liability Co." 
• "Ltd. Liability Co." 
• "Limited"

Punctuation matters, but capitalization does not.

Avoid prohibited terms

Certain words are restricted or require special approval to be included in your LLC's name. These may necessitate additional documentation or approval from relevant state authorities. Examples include:

• "Bank"
• "Insurance"
• “Trust”
• Words implying affiliation with a governmental agency (e.g., "FBI," "Treasury," "State Department")
• Obscene words and words that imply illegal activities or that violate the law

Use acceptable characters

Only certain letters, numbers, and symbols can be used when filing a business name. See the Secretary of State’s website for a chart of acceptable characters. 

Check for name availability

If a business name is already on record with the Colorado Secretary of State, it is considered unavailable. To be approved, an entity name must be distinguishable from existing names in the database.

What makes a name distinguishable?

If you have a name similar to another business, it may still be distinguishable by the following:

• Articles of speech (e.g., “the” and “a”)
• Different abbreviations or terms for business structures (e.g., LLC vs. Limited Liability Company)
• Spacing, hyphens, or parentheses
• For example:
• ABC LLC is different from ABC Limited Liability Company
• ABC LLC is different from A-B-C LLC
• ABC LLC is different from (ABC) LLC

What does not make a name distinguishable?

Certain minor formatting changes do not make a name unique, including:

• Punctuation marks (e.g., periods, commas, underscores, apostrophes)
• Uppercase vs. lowercase letters
• Example:
• ABC Inc is the same as abc inc
• ABC Inc is the same as A.B.C. Inc
• ABC Inc is the same as ABC, Inc

Visit the Colorado Secretary of State website’s Business FAQs page for more information on business entity names. 

H3: Reserve your LLC name

While not mandatory, reserving your desired business name with the Colorado Secretary of State can secure it for 120 days, providing you ample time to prepare your formation documents. To reserve a name, file a Statement of Reservation of Name online through the Secretary of State's website. The reservation fee is $25. This proactive step ensures your chosen name remains exclusive during your LLC’s formation period.

Step 2: Choose a registered agent in Colorado

Establishing an LLC in Colorado requires appointing a registered agent. This individual or entity is responsible for receiving legal documents, tax forms, and official correspondence on behalf of your LLC. The registered agent must have a physical address in Colorado.

Who needs a resident agent?

• All Colorado LLCs must designate a resident agent.
• Foreign LLCs registering in Colorado must also appoint a resident agent, even if they have an agent in their home state.

Who can be a registered agent?

• You (if you're a Colorado resident): You can act as your own registered agent if you meet the following requirements:
• Are at least 18 years old
• Have a physical street address in Colorado
• Are available to receive legal documents during standard business hours
• Individual: Another person can serve as your registered agent if they meet the following requirements:
• Are at least 18 years old
• Have a physical street address in Colorado (P.O. boxes are not acceptable)
• Are available during standard business hours to receive legal documents on behalf of your LLC
• Business entity: A company authorized to conduct business in Colorado can act as a registered agent, provided it maintains a physical office within the state and is available during standard business hours.
• Registered agent service: If you prefer not to receive legal documents at your personal or business address, consider hiring a professional registered agent service. These companies provide a physical street address in Colorado for your LLC to receive documents. 

Choosing a registered agent service

There are many registered agent services available in Colorado. If you’re thinking about hiring a professional provider, here are some tips for finding the right one.

Research and compare

Be sure to research different providers and compare factors such as:

• Cost: Fees typically start around $50 per year.
• Reputation: Choose a reputable company with a proven track record.
• Customer support: Ensure they provide excellent customer service and support.
• Knowledge: Select a provider with a strong understanding of Colorado-specific compliance requirements to ensure your business stays in good standing.
• Coverage: For businesses operating in multiple states, choose a provider that offers services across all the states where you plan to operate.

Consider bundled services

If you're using a company formation service or an attorney to set up your LLC, they may offer registered agent services as part of a package.

Step 3: Complete the Articles of Organization for your Colorado LLC

After choosing a unique business name and designating a registered agent, the next step in forming your Colorado LLC is to file the Articles of Organization. This document officially registers your LLC with the state and establishes its legal existence.

What is the Articles of Organization?

The Articles of Organization is a legal document that provides essential information about your LLC, including its name, principal office address, registered agent details, and management structure. Filing this document with the Colorado Secretary of State legally forms your LLC.

Filing the Articles of Organization in Colorado

In Colorado, the Articles of Organization for an LLC must be filed electronically through the Secretary of State's online portal. Paper forms are not accepted. The filing fee is $50, payable online using a credit card, debit card, or prepaid account.

How long does it take for an LLC to get approved in Colorado?

Electronic filings are typically processed immediately upon submission. You will receive confirmation upon successful registration. 

What to include in your LLC's Articles of Organization form

Completing the Articles of Organization form is a fairly simple process since not much information is required. You will be asked to provide:

• The name of your LLC
• Principal place of business address
• Registered agent information
• Management structure
• Your signature

If you are not a Colorado resident: 

If your LLC was formed in another state and you intend to conduct business in Colorado, you must register as a foreign LLC with the Colorado Secretary of State. The required steps include:

1. File a Statement of Foreign Entity Authority online through the Colorado Secretary of State's website to obtain authorization to transact business in Colorado.
2. Ensure that your business name is available. 
3. Appoint a registered agent in Colorado.
4. Submit your application with the required filing fee of $100.

Visit the Colorado Secretary of State website for instructions for filing the Statement of Foreign Entity Authority. 

Step 4: Get an Employer Identification Number (EIN)

You’ll likely need an Employer Identification Number (EIN) from the Internal Revenue Service to form an LLC in Colorado. An EIN is a nine-digit number that identifies a business for tax purposes, similar to a Social Security Number for your company.

According to the IRS, you need an EIN if any of the following apply:

1. You have employees.
2. Your business operates as a corporation or partnership.
3. You file employment, excise, or alcohol, tobacco, and firearms tax returns.
4. You withhold taxes on income, other than wages, paid to a non-resident alien.
5. You have a Keogh plan (a tax-deferred pension plan).
6. You are involved with certain types of organizations, including trusts, estates, real estate mortgage investment conduits, non-profit organizations, farmers' cooperatives, or plan administrators.

Single-member LLC considerations

If you are a single-member LLC, you may not be required to obtain an EIN. However, getting one is still a smart idea, as your business needs might change over time, and obtaining an EIN is free.

An EIN becomes mandatory if your LLC elects to be taxed as a corporation, hires employees, or files excise or employment tax returns.

Having an EIN also simplifies opening a business bank account and protects your personal Social Security Number, reducing the risk of identity theft.

Requesting an EIN

You can request an EIN by mail or phone, but the fastest method is completing the process online on the IRS website. After obtaining an EIN, use accounting software to track business expenses and ensure your company’s finances remain separate from your personal finances. 

Step 5: Ongoing compliance and required filings

Maintaining your LLC's good standing in Colorado involves adhering to several ongoing compliance obligations:

• Periodic Report
• Filing requirement: All Colorado LLCs must file a Periodic Report annually to maintain active status.
• Due date: The report is due during the three-month period beginning with the first day of the anniversary month of the entity’s formation. For example, if your LLC was formed on June 15, the report is due between June 1 and August 31 each year.
• Filing method: Reports must be filed online through the Colorado Secretary of State's website.
• Fee: The standard filing fee is $25.
• Beneficial Ownership Information Report
• Filing requirement: Under the Corporate Transparency Act, most LLCs are required to submit a Beneficial Ownership Information (BOI) Report to the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN).
• Purpose: This report identifies individuals who own or control the LLC, aiding in the prevention of financial crimes.
• Who needs to file: All LLCs formed on or after January 1, 2025, must file within 30 days of formation. LLCs formed before this date have until December 31, 2025, to comply.
• How to file: Reports are submitted online through the FinCEN reporting portal.
• Fees: There is no filing fee.
• Business licenses and permits
• Requirement: Depending on your LLC’s location and industry, certain licenses or permits may be necessary.
• Examples: Professional services, alcohol vendors, food establishments, and other regulated industries may have specific licensing requirements.
• Verification: Consult the Colorado Department of Regulatory Agencies and your local city or county offices for guidance.
• State tax registration
• Requirement: If your LLC will collect state taxes, such as sales tax, you must register with the Colorado Department of Revenue.
• How to register: Register online through the Colorado Department of Revenue's website.
• Purchase insurance
• Requirement: Depending on your business activities, you may be required to obtain specific types of insurance, such as:
• Workers’ compensation insurance: Mandatory for businesses with one or more employees.
• Commercial auto insurance
• Liability insurance
• Information: Consult with an insurance or legal expert to determine proper coverage for your LLC.
• Employer withholder tax registration
• If you plan to hire employees, you must register for employer withholding taxes to comply with state regulations.
• Requirement: All employers in Colorado are required to withhold state income tax from employee wages.
• Registration: You must register for a Colorado Wage Withholding Account with the Colorado Department of Revenue. 
• Filing frequency: After registration, you'll be assigned a filing frequency (e.g., monthly, quarterly) based on your anticipated payroll. 
• Compliance: Timely registration, accurate withholding, and punctual filing ensure compliance with Colorado tax laws and help avoid potential penalties.

For comprehensive information on employer withholding tax obligations, refer to the Colorado Department of Revenue's Employer Withholding Tax resources.

Types of LLCs to consider in Colorado

Understanding the different LLC structures available is important to determine which is the best for your business.

Single-member LLC

A single-member LLC is owned by one individual or entity, providing liability protection while allowing for simplified management and taxation. In Colorado, this LLC is typically treated as a disregarded entity for federal income tax purposes, meaning the business's income and expenses are reported on the owner's personal tax return.

Multi-member LLC

A multi-member LLC consists of two or more members who share ownership. This structure offers flexibility in management and profit distribution among members. By default, multi-member LLCs are treated as partnerships for tax purposes unless they elect to be taxed as a corporation.

Member-managed LLC

In a member-managed LLC, all members actively participate in the management and decision-making processes of the company. This is the default management structure for LLCs in Colorado unless otherwise specified in the Articles of Organization.

Manager-managed LLC

A manager-managed LLC involves appointing one or more managers to handle the daily operations, allowing non-managing members to act as passive investors. This structure is beneficial when certain members prefer to be uninvolved in daily management.

Costs of setting up an LLC in Colorado

Establishing an LLC in Colorado involves several fees:

• A one-time fee of $50 is required to file your Articles of Organization with the Colorado Secretary of State.
• If you choose to hire a registered agent, fees typically start at $50 per year.
• Colorado mandates that LLCs file a periodic report annually with a $10 fee.

Other expenses may include late fees for overdue filings and costs for necessary business licenses or permits, especially if your LLC operates in a regulated industry.

Open a Colorado LLC business bank account 

Establishing a dedicated business bank account for your Colorado LLC is essential to maintain liability protection and ensure a clear separation between personal and business finances. This distinction helps safeguard your personal assets, streamlines tax filing, enhances bookkeeping efficiency, and strengthens your professional image.

What you'll need

When opening a business bank account in Colorado, you'll typically need:

• Employer Identification Number (EIN)
• Copy of your Articles of Organization
• Operating Agreement (if applicable)
• Personal identification

Out-of-state residents should consider choosing a bank with a presence in the state.

After opening your business bank account, using QuickBooks accounting software can help manage your finances efficiently, supporting accurate recordkeeping and simplifying tax preparation.

LLC taxes in Colorado

Operating a Colorado LLC requires understanding various tax classifications and obligations at both the federal and state levels.

Federal tax classification

Colorado LLCs can choose their federal tax classification, which impacts how they are taxed at the state level:

• Single-member LLCs: By default, these are treated as disregarded entities, meaning income and expenses are reported on the owner's personal federal tax return.
• Multi-member LLCs: These default to partnership taxation, requiring the filing of Form 1065 with the IRS.
• Election as a corporation: LLCs can opt to be taxed as a C corporation or S corporation by filing the appropriate forms with the IRS.

State income tax

Colorado imposes state income tax on personal income, affecting LLC members differently based on their federal tax classification:

Pass-through entities

For LLCs taxed as sole proprietorships, partnerships, or S corporations, profits pass through to members' personal tax returns. As of 2025, Colorado has a flat income tax rate of 4%.

C corporations

LLCs electing to be taxed as C corporations are subject to the Colorado corporate income tax rate of 4% in 2025.

Sales and use tax

Colorado businesses are subject to sales and use tax:

• Requirement: LLCs selling tangible personal property or taxable services must register to collect and remit sales tax.
• Registration: Businesses must register with the Colorado Department of Revenue to obtain a sales tax permit. The state sales tax rate is 2.9%, with additional local taxes varying by jurisdiction.

Employment taxes

LLCs with employees have specific tax responsibilities:

• Withholding tax: Employers must withhold Colorado state income tax from employee wages and remit them to the Colorado Department of Revenue.
• Unemployment insurance tax: Employers are required to pay unemployment insurance tax to the Colorado Department of Labor and Employment. The tax rate varies based on the employer's experience rating. The chargeable wage limit for 2025 is $27,200. See the rate tables at the Colorado Department of Labor and Employment website. 

Colorado-related resources

• Colorado Secretary of State: The Colorado Secretary of State oversees business registrations, elections, and licensing.
• Colorado Department of Revenue: This department administers tax laws, issues state identification cards and driver's licenses, and enforces regulations related to gaming, liquor, tobacco, racing, auto dealers, and marijuana.
• Colorado Department of Labor and Employment: The Colorado Department of Labor and Employment provides information and tools to help Colorado businesses and workers remain competitive. It has resources covering labor laws, workers’ compensation, public safety, unemployment insurance, and more. 
• Colorado Small Business Development Center (SBDC) Network: The SBDC network offers free and confidential consulting, along with training programs, to help small businesses start, grow, and prosper throughout Colorado.
• Colorado Department of Regulatory Agencies (DORA): DORA is the state's umbrella regulatory agency, overseeing the licensing and registration for multiple professions and businesses.

Federal-related resources 

• Small Business Administration (SBA): The SBA supports small businesses through various loan programs, including the 7(a) loan, provides resources for government contracting, and offers counseling and training programs to help entrepreneurs start and grow their businesses.
• Internal Revenue Service (IRS): The IRS provides essential information for LLCs, including tax classifications, employer identification numbers (EINs), and filing requirements. Its Small Business and Self-Employed Tax Center offers guidance on tax obligations specific to LLCs.
• U.S. Patent and Trademark Office (USPTO): For businesses looking to protect their intellectual property, the USPTO provides resources on how to apply for patents and register trademarks, which can be essential for safeguarding your unique products or services.
• U.S. Department of Labor (DOL): The DOL's website offers information on federal labor laws, workplace safety regulations, and employee benefits that LLC owners need to consider when hiring staff.

Disclaimer: 

This content is for information purposes only and information provided should not be considered legal, accounting or tax advice or a substitute for obtaining such advice specific to your business. Additional information and exceptions may apply. Applicable laws may vary by state or locality. No assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a customer’s particular situation. Intuit Inc. does not have any responsibility for updating or revising any information presented herein. Accordingly, the information provided should not be relied upon as a substitute for independent research. Intuit Inc. cannot warrant that the material contained herein will continue to be accurate, nor that it is completely free of errors when published. Readers should verify statements before relying on them.