When you form your LLC in Colorado, you’ll have to pay certain costs to officially register your business with the state.
In addition to formation and ongoing costs, there will be business expenses like using a registered agent service, building a website, getting business insurance, and so on. So, what’s the total Colorado LLC cost?
In this guide, we break down the costs associated with forming your LLC, from the Colorado LLC filing fee to LLC upkeep prices and other business expenses.
Cost of Forming an LLC in Colorado
When forming your limited liability company (LLC), there are a few different costs that you may incur. These include the filing fee, LLC formation service cost, operating agreement draft, and registered agent costs.
Colorado LLC Filing Fee
To form an LLC in Colorado, you will need to file an Articles of Organization. Filings are restricted to online only and are done on the Colorado Secretary of State website. The filing fee is normally $50. However, the fee has been reduced to $1 from July 1, 2022 through June 30, 2023.
If you decide to have an LLC formation service file your paperwork, you will be responsible for the state fee on top of the formation service’s fee. These service fees vary in price depending upon the company you partner with and the services you require. Pricing starts at $29 and increases with each additional service you elect to purchase.
Most people choose to use an LLC formation service to create their LLC. The cost is low and they guarantee that your filing is done correctly. Check out our #1 rated LLC service:
For more details on the formation process, check out our Colorado LLC Formation guide.
Colorado Registered Agent and Registered Office
The State of Colorado requires that every LLC appoint a registered agent. A registered agent is a business entity or individual that you assign as your point of contact. Your agent will be responsible for accepting official documents on your behalf, including legal paperwork, correspondence from the government, and tax forms. The annual fee for a registered agent service starts at $130.
Your registered agent can be:
- A registered agent service (most common)
- Yourself (not recommended)
- Another member of the LLC
- A business attorney
If you haven’t yet formed your LLC, we recommend using Northwest Registered Agent to form, as you will receive one year of registered agent services for free with a $29 formation.
Colorado LLC Operating Agreement
An operating agreement is a legal document that outlines the ownership and operating procedures of an LLC. It’s used to define the role each member or manager will play in the company, along with their responsibilities. Defining these roles and responsibilities early on helps avoid confusion and resolve potential conflicts that might come up later.
Since the Colorado Department of State does not require LLCs to file their operating agreements with the state, there are no filing fees to budget for. The only potential costs you face are in the drafting of the document. Most single member LLCs and simple multi-member LLCs elect to draft the document themselves.
If you decide to draft your own operating agreement, use a document builder or free operating agreement template. That brings your total cost to $0.
Optional Colorado LLC Formation Costs
Along with the fees associated with forming an LLC, there are several optional LLC formation costs that you may encounter.
- Reserve a Name for Your LLC -Prior to registering your LLC business name, you will first need to check to ensure it’s available by doing a business name availability search. If your LLC name is available and you aren’t forming your LLC right now, you can reserve the name temporarily. Reservations are good for 120 days and cost $25.
- Doing Business As (DBA) Name – If you plan to operate under a different name than your LLC’s, you will need to file a DBA with the Colorado Secretary of State. The cost to file a DBA or trade name in Colorado is $20. However, the fee has been reduced to $1 through June 30, 2023.
- Expedited Colorado LLC Filing – Colorado offers expedited filing of your Colorado Articles of Organization for an additional fee of $50 per filing.
- Certified Document Copies – To validate that the information on your Colorado LLC business documents is correct, you can request a certified copy from the state. Certified copies under 20 pages are free. Each additional page costs $0.25.
- Certificate of Status – A Certificate of Status verifies that your LLC is registered with the state and authorized to do business in Colorado. Most lenders and banks require this paperwork. The fee for requesting a Certificate of Status is $5 if requested by mail or in person. Online requests are free.
Colorado LLC Cost and Fees Over Time
There are a few things you need to address to keep your LLC in good standing with the state year after year. Each of these comes with costs and fees.
Annual LLC Fee Colorado
Each year, your Colorado LLC must submit a periodic report (sometimes referred to as an annual report) with the Colorado Secretary of State. The Colorado periodic report helps the state maintain accurate records of each Colorado business. The government uses this information to track your state tax payments. Interested parties can access these public records if they need to contact you for any reason. The filing fee for this report is $10.
To find out when your periodic report is due, you’ll need to complete a record identification search on the Colorado Secretary of State’s website. Your LLC’s business summary page will list the month your report is due.
Colorado periodic reports can be filed two months before and after the month listed on your business summary. There’s a $50 late fee for late report filings. See our Colorado LLC Periodic Report article for a more in-depth overview.
Registered Agent Fee
If you use a professional registered agent service, you will pay their fee annually. Pricing will depend on the service provider that you use, but usually costs around $130/year. Using a registered agent service will save you time and the hassle of handling important legal documents and filings for the long term.
If you act as your own registered agent there are no maintenance fees. However, for privacy and compliance purposes, we don’t recommend being your own registered agent.
We recommend Northwest Registered Agent, which offers a year of its registered agent service for free when you use the company to form your LLC ($29 + state fees).
General Costs of Running a Business
Operating a business will obviously come with more than just LLC costs. These are a few of the expenses that you may run into.
Business Bank Account
An LLC separates your personal assets from your business assets. This separation is called the corporate veil. That corporate veil ensures that if your business is sued or incurs debts, your personal assets will be protected from any liabilities.
Commingling (mixing) your personal bank account with your business can pierce your LLC’s corporate veil, which means you are no longer protected by the separated entity of your LLC.
Using a separate bank account to accept payments and pay business expenses is the only way to prevent commingling funds and piercing the corporate veil.
Recommended article: Check out TRUiC’s Best Small Business Banks guide to find the best bank account for your business.
Business Permits and Licenses
Depending on the type of business you operate, your business may need the proper permits and licenses to legally operate in Colorado.
Alongside the permits required, your business may require industry-specific licenses to operate legally. Examples include licenses like the Colorado real estate license, Colorado insurance license, Colorado adjuster license, and so on.
See TRUiC’s How to Get a Business License in Colorado article for more information.
Every business needs a website. There’s no better way to get in front of your customers, build your brand, and grow your business.
Fortunately, the cost and difficulty of creating a business website have come down over the years. Websites are now simple to build and cheap to keep up.
We advise LLC owners to use the GoDaddy Website Builder. It’s an extremely simple to use system, creates great business websites, and only costs about $15/month.
Having the proper insurance coverage can potentially save your entire business if there is a loss, accident, or lawsuit.
A few of the most common business insurance policies include:
- General liability insurance – Protects against claims of personal injury, physical injury, property damage, and more. This is the most common of all business insurance policies. Learn more about general liability insurance.
- Professional Liability Insurance – Protects against claims of inaccurate or negligent work. It’s most common in the “professional” space where businesses offer services or advice to other businesses or consumers. Learn more about professional liability insurance.
- Commercial Workers’ Compensation Insurance – This type of insurance protects your employees from on-the-job injuries or illnesses. This coverage is required if you have one or more employees. Learn more about Workers’ Compensation insurance.
The cost of business insurance varies widely based on business type, size, location, and other factors. Getting a quote is the only way to understand the actual cost of insurance for your LLC.
We recommend NEXT Insurance to help protect and grow your Colorado LLC. It features instant coverage with competitive pricing that’s tailored to fit your business’ needs.
LLC Cost in Colorado FAQ
Do you have to pay ongoing fees for an LLC every year?
Yes. Colorado LLCs are required to file a periodic report each year in order to conduct business legitimately. This filing is done online through the Colorado Secretary of State website and the fee for this report is $10. This is the case regardless of whether you register your business as a domestic or a foreign LLC.
What’s the cheapest way to form an LLC?
Can you start a Colorado LLC for free?
No. All applicants must pay the state filing fee to start a Colorado LLC. The filing fee is normally $50. This fee has been reduced to $1 through June 30, 2023.
How much does a registered agent cost?
Do I need to pay a franchise tax for my Colorado LLC?
No. The state of Colorado does not require service-related businesses to collect sales tax. Having said that, businesses that relate to tangible personal property will be subject to sales and use taxes in the state, and will thus need to apply for a Colorado sales tax license.
How much does an LLC formation service provider cost?
It depends on the LLC formation company you choose. We recommend Northwest Registered Agent, which starts at $29, plus the $1-$50 state fee, and includes the first year of registered agent services for free.