A Colorado LLC Operating Agreement designates a documented registry to communicate intentions regarding operating procedures for an LLC. The clauses of the contract include provisions defining ownership percentages among members and/or managers, as well as an initial investment and ongoing disbursement amounts. Additional paragraphs highlight extended voting rights for each owning individual, assigned responsibilities, and possible buyout and dissolution options. Colorado statutes do not mandate the execution of an operating agreement to institute the formation of an LLC, but it is recommended for professional and legal purposes.
Operating Agreements – § 7-80-108, § 7-80-401
Definitions – “Operating Agreement” means any agreement of all of the members as to the affairs of a limited liability company and the conduct of its business. Except as otherwise provided in this article or as otherwise required by a written operating agreement, the operating agreement need not be in writing. An operating agreement may contain any provisions required or permitted by section § 7-80-108(1). An operating agreement includes any amendments to the operating agreement § 7-80-102(11).
Multi-Member LLC Operating Agreement – Legal commitment involving an LLC held or managed by more than one person.
Single-Member LLC Operating Agreement – A summary of how a sole owning party will maintain a business and details of operating procedure.
Every company must designate an assigned name that must be registered to do business in the state of Colorado. To determine the availability of the desired name, a search can be performed using the Secretary of State’s website. Once you have narrowed down the search for a usable name, you can file articles of organization or officially reserve the name to retain the right of use for a 120-day period. Review Colorado Statute § 7-90-601(3)(c) to ensure that the selected name adheres to the legal name requirements for limited liability companies. To apply for a name reservation, click on this link and follow the instructions to formally reserve a name.
Every LLC is obligated to retain a nominated individual to accept any delivered legal notifications in an official capacity. This assigned agent can be a person or an entity and must meet a number of requirements to be considered for the role. Appointed individuals must be at least eighteen (18) years old and a Colorado resident with a valid physical address within the state. Hired commercial firms designated for registered agency must be permitted to do business within the state.
Establishing a business as a limited liability company with the state government will necessitate the filing of official paperwork known as “articles of organization” (domestic) or a “foreign entity registration” (foreign) depending on whether the LLC is located within the state, or already officially formed outside the state. Filing the necessary document will require specifics on the company’s name address, involved members and/or managers, registered agent, and any other pertinent information. The process for application is outlined for each LLC type below:
Utilizing an operating agreement to provide a framework of how an LLC will function can help to achieve an overall comprehension regarding owning parties or outside investors. Although the arrangement is not required in order to form an LLC within Colorado, it can benefit company owners to have a written outline of percentages of ownership as well as rights and confirmed duties moving forward. The multi-purpose form can be used to establish the commitment, or one of the following member-specific forms can be finalized depending on how many individuals hold interest in the LLC:
Once a limited liability company is formed, there are typically some additional tasks that may need to be completed. It is important to apply for any necessary federal certifications and keep up to date with required state filings to retain an ongoing active status for the company.
The federal government employs a numerical system designed to attach a unique number to each business to identify account specifics. This “employer identification number” or “EIN” can be acquired by applying online or by mail. An online application can be made by visiting the IRS website, selecting the “Apply Now” option, and following the prompts to completion. Those that would rather submit by mail must first download the Application for Employer Identification Number (Form SS-4), fill it out as directed, and mail it to the indicated address found on the IRS chart of addresses and phone numbers.
Keeping your LLC current with the state government will require the annual submission of a periodic report. The report will come due each year on the month of initial formation, allowing each LLC the opportunity to complete the task between two (2) months before or after the stipulated due date. Completion of the form must be carried out online and will require a $10 fee at the time of application.
