In Colorado, the LLC has clearly become the entity of choice for entrepreneurs, considering that 76% of new Colorado businesses are formed as LLCs. The strength of the Colorado LLC statute (CO Limited Liability Company Act) and the capability to insulate business owner’s exposure from personal liability remain the primary reasons for the LLCs popularity in Colorado. The LLC also provides the most flexibility of the business entity types available. For example, the LLC has the option of choosing pass through taxation or corporate taxation, although pass through taxation is almost always preferred. Furthermore, the LLC does not need to adhere to the rigid corporate formalities associated with the “S” Corp and “C” Corp. Should your business be operating as a Colorado LLC? The following points are indicators that your business should consider becoming a LLC.

 

1.      You are concerned about personal exposure because you are currently operating as a Sole Proprietorship.

2.      You have or will have a partner and you are concerned about your personal exposure and unlimited legal liability for the debts and obligations of the business.

3.      You have or will have employees.

4.      You will be signing business contracts.

5.      You will be raising capital for your business.

6.      The business has inherent risks. A few examples include: mining, construction, blasting, tree removal, and where vehicles of any kind (including automobiles) will be used within the scope of the business.

7.      You have a storefront or the public will be invited to your office.

8.      You want the professional image associated with a legal entity name.

 

We at www.RockyMountainStartup.com would be glad to assist you today with the formation of your new Colorado LLC.