Where do you start? The process of setting up an LLC is different from state to state. In this page, we will provide you with a step-by-step guide on how to set up an LLC in Colorado.
Step 1 – Name Your Business
The first step when forming your LLC is to choose and register a name for it. The name of your business should be unique and must include one of the following words or abbreviations: Limited Liability Company (LLC), L.L.C., Limited Company (LC), L.C., or Ltd Co. Additionally, the name should not contain any restricted words such as “bank” or “insurance” that could imply you are providing services in those industries without license or approval from the state government. You can check if the name you have chosen is available by searching through the database on the Colorado Secretary of State website.
Step 2 – File Articles of Organization
Once you have decided on a name for your business, you need to file Articles of Organization with the Secretary of State’s office in order to formally establish your LLC. This document contains basic information about your company such as its name, address and purpose. You can file this document online via Express Filing Service which will cost an additional fee on top of filing fee which usually ranges between $50-$100 depending on type of service you select and other factors like expedited filing etc..You can also download and fill out Form 201 from Secretary Of State’s website, sign it and mail it along with applicable fees at address mentioned on form instructions page.
Step 3 – Get an EIN Number
Once your Articles Of Organization are filed and approved by Colorado Secretary Of State’s office, you will receive confirmation letter for same .You would need this confirmation letter while applying for Employer Identification Number (EIN) from Internal Revenue Service (IRS). An EIN number is basically used by IRS to identify taxpayers who are required to file various business tax returns .It is basically Social Security Number (SSN) for businesses .You can apply for EIN online here ,or alternatively call IRS customer service helpline during normal business hours . Once you obtain EIN number ,you would need to provide it to vendors who pay money into your bank account so that they can properly report income paid out.
Step 4 – Create Operating Agreement
An operating agreement essentially outlines rules governing each member’s rights and responsibilities within an LLC structure . It also outlines each member’s percentage ownership stake, distribution rate ,voting rights etc ..It isn’t mandatory requirement but having one helps protect members from possible internal disputes over issues such as profits distribution, management roles etc.. You can create operating agreement using templates available online or hire lawyer who specializes in creating these documents.
Step 5 – Open Bank Account
Now that everything else has been taken care off ,you just need one final step before getting started -opening bank account specifically meant for business operations .This helps keep track of all transactions made over course of year which makes filing taxes much easier at end. Most banks require copy of articles organization before opening account so make sure you have that ready beforehand. Once this step is completed ,your LLC is ready for operation!
Forming an LLC in Colorado doesn’t have to be complicated process thanks to state’s streamlined process which makes setting up new businesses fairly straightforward task. By following above steps carefully, you should be able set up new LLC within few days without facing any major hiccups along way! And once all formalities are taken care off, you just need open bank account specifically meant for operations before starting new venture! All best wishes!