As a new business owner, you probably already heard of Colorado’s robust economic environment. However, the filing process and costs to register a limited liability company in this state may appear more complex than you’d expect. In this post, let our trade experts shed light on Colorado LLC fees to ensure that you won’t miss any crucial expenses and procedures.
Formation Costs for a Colorado LLC
Articles of Organization
To form your Colorado LLC, submitting incorporation documents is a step that even a small business cannot skip. Upon sending your articles of organization to the office of the state’s secretary, a mandatory $50 filing fee is needed for processing and recording of these files.
Keep in mind that a multi-member LLC or any business structure with more than one member must submit the Additional Members form along with their articles of organization. These forms can be filed online through the Colorado Secretary of State website. Our team advises you to complete the form thoroughly before sending it to avoid possible delays.
Business Name Reservation
Although it’s not a mandatory requirement, paying for business trade name reservation to the Colorado Secretary of State is a great idea to secure your chosen business label. As you may already know, claiming a similar or identical name as other Colorado LLCs could lead to trademark issues and even incur legal fees in the long run.
Business License
Another crucial Colorado LLC fees that you must pay along with the LLC formation expenses in order to conduct business is the state licenses and permits. The filing fee for this requirement varies depending on how your LLC operates in federal, state, and local environments.
Operating Agreement
Besides filing articles of organization, operating agreements are one of the first legal documents you must craft when you form an LLC. An operating agreement usually includes members’ share of profits and losses, provisions on taxes, and percentage of ownership.
The creation of an operating agreement isn’t included in any state filing fees, as it’s not a mandatory requirement. However, if you want to curate a customized operating agreement, our trade experts suggest seeking legal advice from attorneys to ensure the accuracy of its contents. Firms that offer this professional service would often charge a few hundred dollars.
EIN Registration
If your LLC intends to hire employees or open a business bank account, we assure you that all legal papers will require an Employer Identification Number. This procedure will incur about $60-$70 if you designate a service to obtain it for you, none if you chose to file it yourself.
Taxes
LLCs that collect sales tax on the products they’re selling are obliged by the state law to register through the Colorado Department of Revenue. On top of that, the federal tax incurred from business income profits and losses will flow through your personal income tax return.
Registered Agent
As a company operating in Colorado, you’re obliged by the state to appoint a registered agent to receive important demands and notices on your behalf [1]. Registered agents can be any individual or business entity of your choice as long as it has a street address in Colorado.
On the other hand, you’re free to appoint registered agent services (with a mailing address) to handle this crucial role. The pricing of any registered agent service ranges from $0-$300 yearly.
LLC Formation Company
As LLC owners are busy trying to run a business, most of them opt to pay for incorporation service providers to handle their registration filings. Some of these formation companies can also act as your LLC’s registered agent depending on which service package you chose to purchase.
Foreign LLC Registration
If you’re a foreign entity seeking to operate in Colorado, make sure to submit registration forms to the state secretary’s office. The processing fee for foreign LLCs amounts to a hundred dollars.
(For online options, we also listed the most reliable online incorporation companies here)
Colorado LLC Annual Fees
Periodic Report
When you form an LLC, filing a Colorado periodic report is an annual requirement you must fulfill. Submission of periodic reports has a minimal fee of $10 for every filing. Another $50 will be charged to you if you miss the given deadline.
Importance of Paying LLC Formation and Annual Fees
While some filing expenses can’t be excluded when you form an LLC, it’s important to note that annual fees for filing a periodic report and paying taxes keep you in good standing with the state. Therefore, fulfilling these obligations will lessen the chances of penalties and administrative consequences.
FAQ
Is there an annual fee for LLC in Colorado?
Yes, there’s an annual fee for LLC in Colorado for filing an annual report amounting to $10. Besides that, an LLC also has sales and federal tax obligations to pay each year. If you signed up for registered agent providers, these would most likely add up in your annual expenses along with any other business support features you purchased to manage your compliance filings.
How is an LLC taxed in Colorado?
An LLC in Colorado is taxed by pass-through tax entities. This arrangement allows federal taxes to be deducted on individual LLC members. Unlike most states, Colorado does not impose a separate business tax on LLCs. However, this term does not apply to limited liability companies that elected themselves as corporations.
Conclusion
There’s no doubt that there are already many Colorado LLC fees that one must consider before incorporating a business. Still, our trade experts are not against the idea of seeking assistance from formation companies or registered agent providers. Remember that their expertise could help you to avoid non-compliance and help you focus more on operating your business.
To see how much the LLC formation prices and yearly fees in other states, you can check these pages, too!
