How Much Does an LLC Cost in Colorado (Updated Pricing)
If you're considering forming a limited liability company (LLC) in Colorado, you need to understand the business formation expenses.
Through my experience as a Mergers and Acquisitions specialist and after consulting business experts in the state, I've helped dozens of entrepreneurs navigate Colorado's LLC filing process.
In this guide I'll share my insights on the LLC costs and essential requirements needed to establish a Colorado business.
If you're in the process of setting up an LLC, hiring an experienced LLC formation service in Colorado could help you avoid costly mistakes that delay your business launch.
Quick Summary
- A limited liability company in Colorado costs $50 to file the Articles of Organization. This makes Colorado one of the more affordable states for LLC formation.
- Optional costs include registered agent services (around $125/year), name reservation ($25), and potential sales tax licenses ($16), with federal EIN and operating agreements being free.
- Colorado has a flat income tax rate of 4.4% for the 2025 tax year (filed in 2026).
Cost to Start an LLC in Colorado
To form an LLC in Colorado, you should be aware of the mandatory Colorado LLC fees and optional expenses associated with forming a business entity.
1. LLC Formation Filing Fee ($50 - Mandatory)
An LLC in Colorado costs $50 to file the Articles of Organization with the Colorado Secretary of State [1]. This is a one-time fee paid when you first create your Colorado LLC.
Colorado only accepts online filings for LLC formation. The state discontinued paper filing options to streamline the process. When you file online, your Colorado LLC articles are typically accepted instantly upon payment confirmation.
I prefer filing online since the application processes immediately, eliminating the waiting period other states require.
"In Colorado, LLCs are the preferred business structure due to their liability protection for owners, making them the most popular entity choice."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
2. Registered Agent Service Fee ($80-$300 Annually - Optional)
When establishing your LLC, you must select a Colorado registered agent. If you act as your own registered agent or hire a friend to do so, there is no extra expense ($0).
You can, however, choose to work with professional registered agent services in Colorado.
You'll pay roughly $80-$300 a year for this, depending on service level. In the majority of instances, it’s better to hire a registered agent service to safeguard your privacy and provide other helpful business ownership and operating procedures.
3. Name Reservation ($25 - Optional)
You can reserve a company name for $25 if you aren't ready to form your Colorado LLC just yet but know what you intend to call it.
You can hold the name for 120 days by submitting a Declaration of Reservation of a Name to the Colorado Secretary of State.
Before filing the application, I remind clients to confirm that the company name is available in Colorado and that it complies with state guidelines.
Related article: How to Change an LLC name in Colorado
Expenses Following the Approval of Your LLC
Here's a rundown of all other Colorado business fees you may incur when starting an LLC in Colorado.
1. Local Business License (Depending on the Line of Business - Mandatory)
Counties and towns in Colorado are required to obtain a business license.
The cost varies depending on the area and the sector of the business. My clients recently informed me that most company licenses in Colorado Springs and Boulder cost $110 and $25, respectively.
With any state-issued professional licenses, LLCs in regulated sectors like liquor sales, engineering, contracting, and other specialized businesses also need to obtain a permit on the municipal level.
2. Sales Tax Licence ($16 - Mandatory for Retailers)
Businesses engaged in retail sales are allowed to operate in Colorado and collect sales taxes [2]. This applies to all retail transactions, with the state imposing a standard sales tax rate that varies by locality, averaging between 2.9% to 11.2% across different regions.
Almost all LLCs that want to conduct taxable business must have this license. The Colorado Sales Tax License has a two-year expiration date and a filing fee of $16.
To register, you can either complete an online application or submit a Colorado sales tax and withholding account application by mail.
3. Periodic Report ($25 - Mandatory)
Colorado Periodic Report is the term given to the LLC annual report. You must submit an LLC Periodic Report along with the $25 processing fee to the state to update your LLC's details.
The Colorado Secretary of State requires this annual report to keep your LLC's information current. Filing on time maintains your good standing and avoids the $50 late fee.
To avoid penalties and remain compliant with the state, I make it a practice to file 1 month before the due date.
4. State Business Tax (Depending on Income Bracket - Mandatory)
Generally, the net income of an LLC with several members is distributed among them all.
They will be required to pay a fixed rate of 4.4% for the Colorado LLC state business tax based on their fraction of the LLC revenue, according to the Colorado Department of Revenue.
5. Operating Agreement (Optional, but Recommended)
A formal agreement between the LLC Members is known as a Colorado LLC operating agreement. LLC operating agreements include comprehensive details about LLC owners and management practices.
Single-member and multi-member LLCs with one member or more should create an operating agreement at $0, store it alongside their other legal documents, and distribute a copy to each member.
In my experience, a well-drawn operating agreement often helps attracting financial backers by showcasing a strong business ecosystem.
Most websites charge between $100 and $200 for LLC operating agreements if you employ a professional.
6. DBA ($20 - Optional)
You will need a DBA, often known as a "trade name" in Colorado, if you intend to trade under a business name besides your LLC's legal name.
Submit a Statement of Trade Name together with a $20 filing fee to obtain a trading name in Colorado.
7. Certificate of Existence ($0 - Optional, but Recommended)
A Certificate of Existence is required to show that your LLC is current with its taxes and state reporting.
With the Colorado Secretary of State's Business Database Search, you may get a free printed copy of the document.
When clients ask the significance of a Certificate of Existence, I inform them that the document is necessary to activate your business bank account, get investment funds, or expand your LLC to other states [3].
8. Certified Copies ($2 + $0.25 per additional page - Optional)
When your company expands, you might need to get a certified copy of your corporate records from the Secretary of State. A certified copy costs $2 plus 25 cents per page for documents with more than 20 pages.
9. EIN ($0 - Optional, but Recommended)
The Employer Identification Number is issued by the Internal Revenue Service (IRS) and is necessary for paying taxes, opening business bank accounts, acquiring financial assistance, and hiring employees.
You can apply for an EIN on the IRS website free of charge.
FAQs
What is the Penalty for Paying Colorado State Taxes Late?
The penalty for paying Colorado state taxes late is 5% of the amount due or $5, whichever is greater.
Is Colorado a Good LLC State?
Yes, Colorado is a good LLC state due to its low state filing fees and maintenance costs. A limited liability company offers Colorado entrepreneurs personal asset protection while maintaining tax flexibility.
What are the Disadvantages of a Colorado LLC?
Disadvantages of a Colorado LLC include self-employment taxes on all profits, which can significantly increase tax liability compared to traditional employee status. Additionally, LLCs may lack certain federal tax benefits available to corporations, and members must pay taxes on their share of profits annually regardless of whether distributions are taken.
How Much is $100,000 Taxed in Colorado?
$100,000 in Colorado is taxed at approximately $26,786 in total, including all Colorado LLC taxes such as federal income tax, FICA taxes (Social Security and Medicare), and state income tax.
Do I Need to File an Annual Report for My Colorado LLC?
Yes, you need to file an annual report for your Colorado LLC. It's called the Periodic Report and is filed with the Secretary of State each year. The filing fee is $25, and missing the deadline results in a $50 late fee and potential delinquent status.
References:
- https://www.sos.state.co.us/pubs/info_center/fees/business.html
- https://casetext.com/regulation/colorado-administrative-code/department-200-department-of-revenue/division-201-taxation-division/rule-1-ccr-201-4-sales-and-use-tax/rule-39-26-103-sales-tax-licensing
- https://www.sos.state.co.us/pubs/business/FAQs/certGoodStanding.html
