Chances are you want to start a business. It could be painting houses, consulting, or e-commerce. Eventually you come upon the question of whether to create an llc or be a sole proprietor.
Limited liability companies are the leading choice for small businesses in Colorado. They provide tax savings, help with asset protection and can keep you private. If you choose our law firm to form a Colorado LLC, then we do everything for you.
Below we cover the differences between sole-proprietorships, LLCs and corporations, including what makes forming a Colorado LLC the most popular choice. Please contact us if you have any questions.
Forming a Colorado LLC can be done easily and quickly. Everything is done online and we have a same day guarantee for orders placed before 5 P.M. Eastern time. Afterwards, your documents will always be available in your online document center.
Creating an LLC is important for the asset protection, tax savings and privacy. After formation, you are only required to file an annual report once a year. This makes Colorado limited liability companies easy to start and maintain.
Fees: $149 The First Year & $99 After
Important Documents: Operating Agreement, Articles of Organization,
Resolution to Open a Bank Account & More
Time: Complete Our Form in 5 Minutes
Turn Around: Same Day Available
A sole proprietorship is when the person is the business. They are owned by one person and have no legal requirements to start. Many starting out opt for this default structure. They require no extra paperwork, but they pay more in taxes and offer no asset protection.
Unlimited Liability: A proprietorship has unlimited liability and the owner is responsible for all debt. You as the owner are also liable for all the debts of the business, if someone sues the business, they are suing you. The owner can be forced to sell personal belongings to pay down debts. This is known as unlimited liability and is a major downfall in being a proprietorship.
Higher Taxes: A sole prop pays the same taxes as a wage earner. This means no taking advantage of the new tax code for small businesses and paying too much in earned income taxes.
Not Professional: Doing business in your personal name is less professional. Clients and vendors know you have not registered with the state, that you cannot have any partners and can only grow so large. Having a business shows you're there for the long term and this is more than a side project.
Discloses Private Information: Forming an LLC allows you anonymity. Colorado's Secretary does not list owners or managers. Contrast this to a sole-prop where your name appears everywhere and people know your home address. Learn more about LLC privacy here.
Rather than spending a lot on insurance, and hoping to not be sued, you may form an LLC or a Corporation for protection. Each has better tax treatment which more than cover the minimal cost of incorporating with us.
Formal corporate structures, such as LLCs and Corporations, have some very attractive points and are similar in several ways. They exist as their own entities and are their own individuals in the eyes of the law.
Which business structure you should select is impacted by the amount of personal risk you want to be exposed to. When you are in a sole proprietorship or a partnership, then your personal assets can be put at risk if your company is sued. For this reason alone, we advise clients to consider forming limited liability companies and corporations. This process helps to segregate professional assets from personal assets during legal actions.
Articles of Organization: These list the bare minimum required to start your company. The company name, principal office, mailing address, registered agent, organizer, and whether the LLC is manager or member managed. If we form your company, then we enter our information here. This keeps your name and personal information from being a simple Google search away.
Operating Agreement: This agreement lays out the relationship between members. It details ownership percentages and best practices for record keeping procedure, risk management, accounting and more. For a single member LLC it is less important. This is because there is no one to contest ownership and no protection is needed from other members. Banks still request operating agreements, though, so we have included one. You may find out more about Colorado LLC operating agreements here.
Organizational Minutes: These are the minutes to the company's first meeting. There are a few common formalities such as agreeing to organize the company. An initial manager is appointed for these duties who immediately resigns and hands power to the true owners or managers.
Resolution to Open Bank Account: We complete this document with all your information. All that's left is to name the bank you want to open your account with. Complete and sign this paperwork for taking to the bank.
If you want the full benefit of your LLC, then yes you must have an Employer Identification Number. An LLC must maintain its own bank account and an EIN is required to open the account. You will also need one to file taxes, hire employees and vendors require them too. In short, there's no way around getting one. We can do it for you, or you may follow our step-by-step EIN guide here.
The corporate veil is the legal concept that company is its own person. It may enter into contracts and is liable for its own debts. This separation between the company and its owners also protects the owners personal assets. Only their initial contribution into the company can be lost. A corporate creditor cannot pierce the corporate veil, and seize personal assets, except for in cases of fraud.
You will receive everything you need to begin doing business. This includes your articles of organization, operating agreement, organizational minutes, resolution to open a bank account and more. We complete these documents for you, rather than some providers who supply templates that must be edited.
Colorado's Secretary of State only requires you to file a periodic (annual) report and maintain a registered agent in Colorado. The annual report is simple to file, or you may have us do it to keep your name and signature out of public records.
Only sometimes will forming a corporation be a better choice. Their ability to issue preferred shares, which may have enhanced voting or economic rights, is one advantage. Rarely will small businesses find the increased cost and complexity worthwhile though. Many mistakenly choose a corporation solely for the sub-chapter s taxation election. In fact, limited liability companies may also be taxed as an s-corp in addition to a partnership, disregarded entity or c-corporation.
Sole-props are when you run a company under your name, or only a Trade Name/DBA, rather than forming a company. You will pay MORE in taxes and receive no protection in case of an accident or bad debt. Even those pursuing what seem simple "hobbies" should considering forming an LLC. Learn more about incorporating in Colorado here.
Colorado is one of the states which does not require owners or managers to be publicly listed. This privacy might seem like a small thing, but it can have a large effect. Do you want your name, address, phone and email listed online? If you use our service it won't be. We put our details everywhere instead of yours. This keeps aggressive creditors, family and neighbors from finding out what you own. Learn more about Colorado LLCs and privacy here.
Our goal is simple - to provide a simple one stop shop for doing business in Colorado. Whether you're in a cottage industry, or manage millions, we are happy to help. Our site was designed by entrepreneurs who know first hand the difficulties of starting a company. Fret no more - let us do the work.
Selecting and forming a business entity can be challenging. View our page on incorporating in Colorado to learn about the difference between Sole-Proprietorships, LLCs and Corporations. After forming an LLC or Corporation, you may use our filings services or follow our DIY guides and pre-filled forms. Whether you need an EIN, or need to file for a DBA, we believe in providing the choice of doing it yourself, or letting us handle the paperwork and doing it for you. This site is currently under construction. Please view our other site to form an LLC in CO.
Colorado's statutes require the company name end with a variation of LLC. This includes LLC, Limited Liability Company, Limited, Ltd., Limited Liability Co., etc. If you do not add one of these to the end of your company name, then by default we will add "LLC" to the end.
We don't over-complicate things. We file everything correctly, the first time, so you have one less thing to worry about. Our transparent pricing means you won't be left second guessing your purchase. After that, we will only bug you again when your period report is due next year. It really is that easy.
Our goal is to provide a one stop shop for your Colorado business needs. Whether you need help with forming an llc, obtaining an EIN, or handling mail - we are happy to help.