If you're considering forming a limited liability company (LLC) in Colorado, you'll want to be familiar with the business formation expenses.
To help you save time, we spent weeks researching the costs of the essential requirements needed to establish a Colorado LLC.
In this article, we’ll share everything you need to know about Colorado LLC fees and costs so that you can plan your business funds wisely.
Quick Summary
- Filing the Articles of Organization for your LLC in Colorado costs $1, thanks to the new rates released by the Relief Act.
- All Colorado LLCs are required to file annual reports or periodic reports to the Colorado Secretary of State at a $10 cost.
- Before being legally allowed to conduct business in Colorado, all entities must acquire sales tax business licenses from the state, which costs $16.
How Much Does an LLC Cost in Colorado?
An LLC in Colorado costs $17 for essential filing. This fee covers the Articles of Organization fee ($1) and license tax ($16).
This amount may be higher depending on what other services and documents you apply for during the process.
Further down, we'll share additional filing costs you can expect when forming an LLC in Colorado.
Colorado LLC Filing Fee
In Colorado, forming an LLC costs $1 as per the Colorado Business Fee Relief Act [1]. The state filing fee is for the Colorado Articles of Organization.
The $1 charge only applies once when you first create your Colorado LLC, and no monthly (or yearly) expenses are required.
Unfortunately, there is no way to mail your documents to the state of Colorado, so you can only file them online.
Colorado Registered Agent Service Fee
When establishing your LLC, you must select a registered agent in accordance with Colorado law.
A registered agent is an individual or company that receives legal paperwork and official notices for your LLC in Colorado.
In Colorado, a registered agent must have a physical address and be accessible during regular business hours.
If you act as your LLC's 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 $125 a year for this. In the majority of instances, it’s better to hire a registered agent firm to safeguard your privacy and provide other helpful business ownership and operating procedures.
Colorado Sales Tax Licence
Businesses selling physical personal assets are allowed to operate in Colorado and collect sales tax thanks to the state's issuance of a sales tax license [2].
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 for a sales tax license, you can either complete an online application for a Colorado sales tax license or submit a Colorado sales tax and withholding account application by mail.
Other LLC Filing Costs
Here's a rundown of all other Colorado LLC fees you may incur when starting an LLC in Colorado.
1. Name Reservation
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.
Make sure to confirm that your company name is available in Colorado before reserving it.
2. DBA
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 $1 filing fee to obtain a trading name in Colorado.
3. Colorado Periodic Report
In Colorado, the Periodic Report is the term given to the LLC Yearly Report. You must submit an annual Colorado Periodic Report to the state to update your LLC's details.
To continue functioning, your LLC has to be in good status with state law. You only need to double-check the facts on your report, submit it to the Colorado SOS, and pay the $10 processing fee.
During the duration of your LLC, you must pay these filing costs annually.
4. Operating Agreements
A formal agreement between the LLC Members is known as a Colorado LLC operating agreement. Operating agreements include comprehensive details about LLC ownership and management practices.
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.
Most websites charge between $50 and $200 for LLC operating agreements if you employ a professional.
5. Colorado Certificate of Existence
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 Colorado Certificate of Good Standing.
A Certificate of Good Standing might be necessary to activate your business bank account, get investment funds, or expand your LLC to other states [3].
6. Colorado Certified Copies
When your company expands, you might need to get a certified copy of your corporate records from the Secretary of State, for example, if you're moving your operations to a new state.
A certified copy costs $2 plus 25 cents per page for documents with more than 20 pages.
The state processes certified copies in up to 10 working days, but you can reduce this time by 50 percent by incurring a $150 accelerated service charge.
7. State Business Tax
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 4.63% for the state business tax based on their fraction of the LLC revenue.
For instance, if the revenue of a Colorado LLC with 10 members is $1,000,000, each member gets a fair share based on their shareholding.
Based on that portion, the members must now pay a tax of 4.63% to the Revenue Office.
8. Local Business License
In addition to the state sales tax license, counties and towns in Colorado also need a local sales tax license.
The cost of these licenses varies depending on the area and the sector of the business. For instance, 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 can also need to obtain a permit on the municipal level.
Now that you understand the fees required to form an LLC in Colorado, let's look at how much it costs to register a foreign LLC.
Colorado Foreign LLC Registration
It costs $100 to register a foreign LLC in Colorado. This fee is applicable if your LLC was established in another country but you wish to conduct transactions in Colorado.
To incorporate as a foreign LLC in Colorado, you must file a Colorado Statement of Foreign Entity Authority online; the Colorado Secretary of State also offers comprehensive filing guidelines for this form.
Also, it's important to note that, together with one or more occupational or municipal licenses, you could require a Colorado sales tax license.
FAQs
Is There an Annual Filing Fee for My Colorado LLC?
Yes, there is an annual $10 filing fee for your Colorado LLC. This fee is for your periodic report, which you must submit yearly to the SOS.
How Long Will the New Colarodo LLC Rates Last?
The new rates will last until the end of the 2022-2023 financial year or until the general fund is spent, according to a news statement from the Colorado Secretary of State's Office. According to the Colorado Department, this respite will remain through June 30, 2023.
What Do I Need To Get an LLC in Colorado?
You need a few documents to get an LLC in Colorado. These include Articles of Organization, an operating agreement, an available business name, a Colorado business license, and an Employer Identification Number, to mention a few.
Do You Need Professional Help with Your LLC in Colorado?
Colorado is among the most cost-effective states for LLC formation, with a $1 filing fee for the Articles of Organization. The state also charges a very affordable $10 filing fee for its yearly report.
If trying to adhere to all the regulations to create an official company organization sounds overwhelming, these best Colorado LLC formation services are available to assist you with the entire procedure.
They'll navigate the bureaucracy for you and handle everything, from formation to compliance.
Their team of professionals in business formation can also manage a number of things, like draft your Articles of Organization and organize submitting your necessary legal paperwork with the Colorado Secretary of State.
References:
- https://www.sos.state.co.us/pubs/newsRoom/pressReleases/2022/PR20220701BusinessFees.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
