Colorado is one of the simpler and less expensive states to start a business in. Forming an LLC costs $50, the only recurring state filing is a $25 Periodic Report, and there's no state franchise tax just for existing. The paperwork is the easy part. The decisions around it, like which structure fits, how you'll track money, and what you need to register for, are where new owners lose time and money. Here's the full sequence.
Step 1: Choose Your Business Structure
Most small businesses choose between three options:
- Sole proprietorship: no state filing required, but no separation between you and the business. Your personal assets are exposed to business debts and lawsuits.
- LLC (limited liability company): the most common choice for small businesses. It separates the business from you legally, with flexible management and simple upkeep.
- Corporation: better suited to businesses planning to raise outside investment or issue stock to multiple investors.
How your business is taxed is a separate decision from its legal structure. An LLC can be taxed as a sole proprietorship, a partnership, or an S-corporation, and the right choice depends on your income and plans. That's a tax planning question, and we'll connect you with a CPA in our network to answer it.
Step 2: Pick and Check Your Name
Search the Colorado Secretary of State's business database to make sure your name is available and distinguishable from existing entities. An LLC's name must include "Limited Liability Company," "LLC," or a similar designation. If you'll operate under a different name than your legal entity name, you'll also file a Statement of Trade Name with the Secretary of State.
Step 3: Appoint a Registered Agent
Every Colorado entity needs a registered agent with a physical Colorado street address who can accept legal documents during business hours. You can serve as your own agent if you have a Colorado address, but that address becomes public record. Many owners use a registered agent service for privacy. We don't provide registered agent service, but we'll connect you with providers who do.
Step 4: File Your Articles of Organization
LLCs are formed by filing Articles of Organization online with the Colorado Secretary of State. The filing fee is $50, paper filing isn't available, and online filings are typically processed quickly. Corporations file Articles of Incorporation instead. Check the Secretary of State's fee schedule for current amounts.
Step 5: Get Your EIN
An Employer Identification Number (EIN) is your business's federal tax ID. You'll need one to open a business bank account, hire employees, and file business tax returns. It's free from the IRS. Be cautious of websites that charge for it.
Step 6: Put Your Internal Documents in Place
An operating agreement (for an LLC) or bylaws (for a corporation) sets out ownership percentages, how decisions get made, how profits are distributed, and what happens if an owner leaves. Colorado doesn't require you to file it with the state, but you need one, especially with more than one owner. You'll also want initial resolutions and ownership records, like a membership ledger or stock issuance records. For anything beyond standard templates, work with an attorney.
Step 7: Open a Business Bank Account
Keep business and personal money completely separate from day one. Mixing them makes bookkeeping harder, complicates taxes, and can weaken the liability protection your LLC or corporation gives you. Most banks will ask for your filed Articles, your EIN, and your operating agreement.
Step 8: Register for State and Local Taxes and Licenses
Depending on what you sell and where, you may need to register with the Colorado Department of Revenue (for example, to collect sales tax) through MyBizColorado. Many cities and counties also require their own business license or sales tax license, and some industries need state licensing. Requirements vary by location and industry, so check both state and local rules before you start selling.
Step 9: If You're Hiring, Set Up Payroll Accounts
Before your first employee starts, you'll need state withholding registration with the Department of Revenue, an unemployment insurance account with the Colorado Department of Labor and Employment, Colorado FAMLI (paid family and medical leave) premiums, and workers' compensation insurance.
Step 10: Set Up Your Books
Choose accounting software (QuickBooks Online is the most common), build a chart of accounts that reflects how your business actually operates, and connect your business bank and card accounts. Books set up correctly on day one cost far less than books cleaned up after a year of guesswork.
Step 11: Stay in Good Standing
Colorado requires every LLC to file a Periodic Report each year during a window around your formation anniversary month. The fee is $25. Missing it leads to late fees and can eventually make your business delinquent, which can cause problems with banks and licensing. Sign up for the Secretary of State's email reminders when you file.
What It Costs to Start a Business in Colorado
| Item | Cost |
|---|---|
| Articles of Organization (LLC) | $50, paid to the Colorado Secretary of State |
| EIN | Free from the IRS |
| Periodic Report | $25 per year |
| Registered agent service | Varies by provider, if you don't serve as your own |
| Local licenses | Varies by city, county, and industry |
How TrueInsights CFO Can Help
- Business Formation, $250: your state filing, EIN, standard operating agreement or bylaws, and ownership records. State filing fees are billed at cost.
- Launch Package, $750: everything in Business Formation, plus QuickBooks Online setup with a custom chart of accounts, a 12-month startup budget and cash flow projection, and a 30-day check-in. Credited toward your first month if you start ongoing services within 60 days.
- Registering in additional states: $50 per state.
Frequently Asked Questions
How much does it cost to start an LLC in Colorado?
The state filing fee for Articles of Organization is $50, and the annual Periodic Report is $25. An EIN is free from the IRS. Your total cost depends on whether you use a registered agent service and what local licenses your business needs.
How long does it take to form an LLC in Colorado?
Colorado accepts formation filings online only, and they're typically processed quickly. Getting your EIN, bank account, and local registrations in place usually takes longer than the state filing itself.
Does Colorado have a franchise tax or annual LLC tax?
No. Colorado doesn't charge a franchise tax or minimum annual tax just for an LLC to exist. The recurring state filing is the $25 Periodic Report.
Do I need a registered agent in Colorado?
Yes. Every Colorado entity needs a registered agent with a Colorado street address. You can serve as your own if you have one, or use a registered agent service to keep your address private.
Should my LLC be taxed as an S-corporation?
It depends on your income, how you pay yourself, and your plans for the business. That's a tax planning decision, and we'll connect you with a CPA in our network to work through it.
Can TrueInsights CFO form my business for me?
Yes. Our Business Formation package is $250 and our Launch Package is $750, plus state filing fees at cost.
This guide is general information, not legal or tax advice. TrueInsights CFO, LLC is not a law firm or CPA firm. State fees and requirements change; confirm current details with the Colorado Secretary of State, the Colorado Department of Revenue, and your local government.