If you're looking for a business structure that provides limited liability protection and limited liability, consider starting a Colorado Limited Liability Company. A Colorado Limited Liability Company is registered with the state as a separate business entity from its owners. Limited Liability Companies (or LLCs) are designed for small and start-up businesses, allowing them to enjoy many of the same benefits as large corporations without the added rules, registrations, paperwork and regulations. A Colorado Limited Liability Company does not have to have an office or even a phone address, and can be operated virtually in any way that the owners choose. All state taxes and fees are deferred to the owners until they declare their income and pay the appropriate taxes.
Most small business owners do not understand the intricacies or paperwork necessary to incorporate in Colorado. Most LLCs are designed to be simple and easy to set up. Limited Liability Companies need only a mailing address and contact information, and the Colorado Limited Liability Company Registry allows business owners to list their company's address, phone number and website for tax reporting purposes. Business name must be limited to a single word or a phrase and must include the name of the LLC.
Forming a Limited Liability Company is much simpler than most people think. Forming a Limited Liability Company is easy in almost every state in the U.S., and a quick Internet search for colorado llc forms will provide hundreds of options. Many of these web sites will require a small fee for the service, but this fee is minimal compared to what it costs for a typical business entity to be registered with the state. In some cases, a colorado llc can be created without paying a fee.
Colorado Limited Liability Company Formation
There are other reasons to consider forming a Limited Liability Company, including the ability to avoid double taxation. Many businesses face the threat of double taxation, where they are taxed once through their personal income taxes and then again when dividends are paid to their business entities, resulting in significant financial penalties. By forming a Colorado LLC, individuals avoid double taxation by allowing only income tax to be passed through the individual's individual income tax return. Corporations, on the other hand, are required to pay state taxes on their own personal returns and then have those returns attached to Colorado corporate tax returns.
The first step toward forming an LLC in Colorado is to file an application, commonly known as a "notice of intent to form a corporation." All state governments require this filing, so all individuals planning to start a new business or do business within the state should be aware of this requirement and be sure to file accordingly. Also filed in Colorado are the individual's Articles of Organization for the LLC, commonly called an "Articles of Organization" (Doe). All LLCs must include the name of the LLC, the office or location of its registered agent, its address and telephone number, its notice of intent to register, its business address, and its business license or permit to operate.
All LLCs should include the contact information for at least one member or the Secretary of the LLC. Some Colorados allow for two members, but this must be done separately from the paperwork for the LLC itself. Additionally, all LLCs must include a provision that guarantees its owners that their LLC will be considered a bona fide corporation for tax purposes, which means it must have both a registered agent and a board of directors.
After filing the articles of organization and the annual report to the Secretary of State, all LLCs must file a "Statement of Information" with the IRS. This includes a notice that the LLC is going to be registered with the IRS and that its office and address are c/o R.L.P. The IRS states that the LLC will be considered a C corporation for tax purposes, although it may not be subjected to taxation under section 15(d) of the IRS Code. The Colorado LLC will also need to file a notice of compliance with the IRS with the Secretary of State.
All LLCs require that their registered agent is a resident of Colorado. A Colorado LLC can have only one registered agent; however, a person forming an LLC in Colorado can have more than one registered agent. A resident of another state may serve as the registered agent on the first day of formation. An LLC may use either his /her mailing address or his /her physical address, but the business must use the address of the registered agent. All mailings to the LLC must be sent to the address for the registered agent.
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