There’s a lot to like about Colorful Colorado. The stunning natural beauty and abundance of outdoor activities, for starters.
And if you’re a local business owner, you also get to benefit from favorable business tax laws, a diverse geographic area, and a government friendly to new industries. So it’s no surprise that Colorado ranks as one of the best places to start a new business in America.
Limited liability companies (LLCs) are a popular type of business that offer advantages like personal asset protection over sole proprietorships.
And forming an LLC in Colorado is an easy and relatively inexpensive way to profit from all the above benefits.
This guide outlines the costs and fees you’ll incur when forming an LLC in the Centennial State.
Table of contents
- Colorado LLC formation cost: $1
- Extra Colorado LLC costs to account for
- Does Colorado have an annual LLC fee?
- What taxes do LLCs pay in Colorado?
- Conclusion: How much does an LLC cost in Colorado?
Last updated: May 2023Start your LLC the easy way
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Last updated: May 2023Colorado LLC formation cost: $1
Initial company incorporation costs vary for domestic and foreign LLCs:
- Domestic LLC: Typically $50, paid when filing the Articles of Organization form. However, due to House Bill 22-1001, the state is covering $49 of the filing fee so the effective cost is currently $1.
- Foreign LLC: $100, paid to file the Foreign Entity Authority Statement
You can form your LLC online with the Secretary of State. Or file paper forms via mail.
Online filings are processed immediately. When you use paper applications, you'll have to wait up to ten days for your documents to be approved or rejected.
In a rush? An expediting fee of $150 applies for paper-filed documents, and you’ll receive a response in three business days.
Extra Colorado LLC costs to account for
Aside from state filing fees, you will likely spend extra on other operational things — from getting an LLC operating agreement drafted, opening a business bank account, or applying for an employer identification number (EIN) from the IRS.
Also, you may want to spend extra with the government on value-added services. Below is an overview of all the LLC formation costs you can incur in Colorado.
1. Registered agent costs: $100
A registered agent is an individual or company who accepts service of process of legal documents and federal tax notices on behalf of your LLC.
When filing your Articles of Organization with the Colorado Secretary of State, you’ll need to appoint a registered agent from the following options:
- Yourself: You can be your own registered agent in CO.
- A family member, friend, or employee: Work with someone you trust.
- Commercial registered agent: Hire a professional provider.
Foreign LLCs without an office address in Colorado typically need a professional registered agent service. Owners of domestic LLCs who don’t want to be available during regular business hours year-round or prefer to keep their personal street address private may also prefer using a pro.
Most Colorado registered agent services charge between $100 – $300 per year, depending on the level of service they provide you.
Colorado doesn’t charge a fee to appoint your initial registered agent since this information is included in your Articles of Organization.
But if you need to make changes, the following nominal fees apply:
- Registered agent resignation: $10
- Registered agent change: $10
2. Trade name registration: $20
A trade name (DBA name) is a moniker you use to legally brand your business under a different name. It makes sense to add a DBA to your business name if you have several product or service lines with different brand names.
Colorado has a simple trade name registration process, but you can only file the name online.
Once you decide on a name, you’ll file a Statement of Trade Name and would typically pay the $20 filing fee. However, due to House Bill 22-1001, the state is providing a $19 credit for trade name registration so the effective cost is $1.
Trade names don’t require a renewal, so long as your LLC remains in good standing with the Secretary of State.
3. Colorado LLC name reservation: $25
If you did a name search and found the best contender for your LLC but aren’t ready to file formation documents, you can reserve it to confirm your intention to use it. Name reservation also prevents other business owners from claiming the name in the meantime.
To reserve a business name, start by filing a Statement of Reservation of Name online, and a filing fee of $25 will apply to reserve the name for 120 days.
4. Certified document copies: Free
The Colorado Secretary of State offers free certified copies of formation documents online. These are true and correct copies of your business filings issued with a stamp, certificate, or endorsement.
Certified document copies include:
- Certificate of Good Standing
- Certificate of Fact of Trade Name
- Certified copies of filed documents
5. Business permits and licenses: Vary
When you form an LLC, you might need additional licenses or permits to operate in Colorado legally.
On a state level, there isn’t a general business license. But if you operate in specific regulated industries or provide a professional service, you may need a specialist or occupational license.
And some cities and counties may require particular permits.
For example, Denver doesn’t have a general licensing requirement, but it has licenses for small businesses such as child care providers, dry cleaners, or food peddlers.
Licensing costs vary by occupation.
Sales tax license
You’ll need to get a sales tax license (sales tax ID) for your business if you:
- Do business in Colorado
- Plan to sell or lease taxable goods/services
You can get the license online with the Colorado Department of Revenue or by mail, and the application fee will be between $4 and $16, depending on when you make your first sale.
After you receive your tax identification number, you’ll be able to file your sales tax returns and pay your tax online with EFT or credit card.
Note: a $50 deposit applies. It will be refunded once your business has paid $50 in taxes.
Most sales tax licenses are valid for two years and expire at the end of each odd year.
Does Colorado have an annual LLC fee?
Yes. Colorado requires LLCs to file annual periodic reports online with the Secretary of State. The filing fee is $10. But if you submit it late, you face a $50 penalty fine. The annual report allows you to update any changed company information, including things like your mailing address or your principal office location.
What taxes do LLCs pay in Colorado?
Colorado has a few state and local taxes you’ll need to be aware of when operating your LLC.
Sales tax: If you sell taxable goods in Colorado, you’ll collect and pay a state sales tax of 2.9%. But you may face higher rates, depending on your business location. That’s because some cities and counties have their own sales tax. When combined with the state’s, you may need to collect as much as 11.2%.
Employment taxes: If you have employees, you must withhold and pay state employment taxes to the Department of Revenue as a Colorado employer. These include income tax withholding and unemployment insurance.
Franchise tax: Colorado doesn’t have an annual franchise or corporate income tax for LLCs.
Conclusion: How much does an LLC cost in Colorado?
The overall Colorado LLC costs vary, but you can start yours for just $50. That’s the non-optional fee you pay to the state for business entity incorporation.
Let’s take an example: Suppose you plan to set up a cleaning business and decide to call it AllSpark LLC. Here’s a calculation of what you may pay for your Colorado LLC during the first year.
| Colorado LLC costs | ||
| Higher-end cost | Lower-end cost | |
Articles of Organization | $1 | $1 |
Registered agent costs | $300 | $0 |
Trade name registration | $1 | $0 |
Name reservation | $25 | $0 |
| Certified document copies | $0 | $0 |
Sales tax license | $16 | $0 |
| Business permits/licenses | $300 (200 application fee + $100 for license) | $0 |
Annual report | $10 | $10 |
Total | $653 | $11 |
Last updated: May 2023Start your LLC the easy way
Forming your LLC is a checkbox that needs to be ticked. Easy, fast and worry-free. We reviewed the 13 most popular LLC formation services to figure out who truly understands what new founders need. Our recommendation:
We don’t make up scores.
Best LLC Service 2022
- Formed 1,000,000+ LLCs
- $39 formation includes registered agent service
- Fast formation & same day filing
- Exceptional customer reviews
Last updated: May 2023