It's safe to say that anyone that's educated about the business startup process knows it's complicated and time-consuming. But one thing that many prospective business owners don't account for is processing times and the time it takes to form a Limited Liability Company on the government's end. How long does it take to get an LLC in Colorado? We'll answer everything you need to know about formation time frames in the state of Colorado in this guide.
Discovering Colorado
Colorado, or The Centennial State, was formed in 1876. It's named “Colorado” after a river named by Spanish explores and it means “colored red” because of the red, muddy color. It's home to the Rocky Mountains in the west, including Mount Elbert, which is the tallest peak in the range. And in the east, you'll find the Great Plains, which is more than 1 million miles of grassland, where corn, wheat and cattle are raised. Some of the natural resources found here are natural gas, coal and oil, uranium, and gold. It's also the world's largest source of an important mineral for hardening steel, called molybdenum. Wind and solar energy are also generated in Colorado, with 13% of the state's electricity being produced by wind. Timber is another important part of the economy. Here's what you need to know about doing business in the state.
Economic Overview of Colorado
Colorado had a population of 5,849, 409 as of 2022, which was an 0.8% annual population growth rate. In terms of population growth rate, it ranks in 15th place in the nation. The state's Gross State Product (GSP) for 2022 was $371.3 billion, and between 2017 and 2022 it experienced a growth rate of 2.4%. Some of the leading Colorado State industries are Oil Drilling & Gas Extraction, Tourism, New Car Dealers, Hospitals, and Supermarkets & Grocery Stores. The companies that employ the most people in the state are the Denver International Airport, Walmart Inc., The Kroger Co., Amazon.com, Inc., and the Lockheed Martin Corporation. The sectors that contribute the most to the state's GSP are Real Estate and Rental and Leasing, Professional, Scientific and Technical Services, Information, Manufacturing, and Healthcare and Social Assistance.
Business Environment in Colorado
On the US News ranking of the best states, Colorado came in #3 in the Economy category. Business Environment was #5, Employment #6, and Growth #12. It also came in 14th place on the Motley Fool and The Ascent's best states to start a business list.
Saying that Colorado is business friendly is almost an understatement. It's experiencing what the business world calls “rapid economic ascension”, which means the economy is growing at an unprecedented rate. Both the cannabis and tech industries are really popping off in the state.
There's a lot of business opportunity in the state of Colorado, as well. Colorado's major metropolitan areas have expanded in recent years, which provides economic opportunities to hopeful entrepreneurs. And because of its gorgeous landscape, an outdoor lifestyle and thriving economy draw in business owners like a siren call.
Because of the successful economy, the cost of living in the state has risen. That raises the price of the state's real estate, which is great for anyone in that industry. It also means that consumers have disposable income. Many communities pride themselves on supporting small businesses and shopping local. And it's not hard for small businesses to gain employees, either. Small businesses in the state employ somewhere around 1.2 million people.
So, it's safe to say that the economy in Colorado is sturdy enough to support any business.
State Specific Regulations and Incentives for Forming an LLC in Colorado
Here are just a few of the regulations and incentives for forming an LLC in Colorado.
- Cash Incentives for New Primary Jobs: These incentives depend on your locations and provide incentives for supplying jobs with wages that are above the county average by at least 120%. The incentives typically pay out somewhere between $500-$2000 per each eligible new job of this type that you provide.
- Abatement of Fees and Taxes: Some places allow businesses to get waivers on fees and taxes. Some of these include building permits, inspection and construction materials, general government fees and taxes, any expansion fees that relate to law enforcement, and more.
- Larimer/Weld County Revolving Loan Fund: The Revolving Loan Fund, or RLF, is financial assistance provided for businesses that either expand, relocate or start up in rural areas. Short-term financing up to 45% of the total costs of the project can be provided.
- Community Development Revolving Loan Fund: This is financial assistance for businesses that either expand into or locate in Greeley. This program can bridge the gap and provide 45% of the company’s lending needs, and it caps out at $125,000.
- Real Estate And Business Personal Property Tax Rebate: Some cities and counties offer personal property tax rebates.
- Manufacturing Equipment Use Tax Rebate: Businesses can get a rebate on part of the use taxes they paid to purchase eligible equipment.
- Utility and Energy Efficiency Assistance: Whether you’re an existing or a new business you can take advantage of incentives to upgrade the energy efficiency of your business. These vary according to your location, but they can include things like grants for upgrading your building or mechanical equipment, money for an industrial building analysis and more.
- Industrial Water Bank: Businesses in Colorado are often required to provide raw water, either with water stocks or cash necessary to supply the water used during development. Some cities offer discounted rates on industrial bank water shares.
- Expedited Development Review: Many jurisdictions give you the option to fast-track the development approval process for businesses.
- Urban Renewal Areas: There are loads of incentives all over the state for redevelopment projects in specific places.
For a look at more incentives, visit the Colorado Office of Economic Development and International Trade website.
Pros and Cons of Establishing an LLC in Colorado
One of the benefits of forming a Limited Liability Company in Colorado is its growing economy. A growing economy means that there's room in the town to support your business, and the businesses that already exist there without damage to either. Business regulations in the state aren't so strict that they'll hurt your business or hold it back, which is great when you're starting up. Another benefit is the increased cost of living and wealth of the state due to the economy. This means that consumers are likely to have money to purchase your products and services.
Because so many business owners set up shop in the state, the small business community wants to see you do well. It's easy to find support from other Colorado state business owners and to collaborate with them. You're even likely to find that your competitors appear to want to see your business succeed!
Another perk of starting an LLC in Colorado is the immaculate natural surroundings in the state. Of course having the opportunity to take in breathtaking views when you walk out of your shop is a major benefit that many business owners in the state enjoy. And thanks to people wanting to take in Colorado's natural landscape in all of its majesty, most of its citizens have an active and outdoorsy lifestyle. The state of Colorado encourages businesses to lean into the active nature of the state by branding themselves with it. The state wants to export Colorado's brand on a national level, and that brand happens to be an active, outdoor lifestyle. So, if you have a business that involves outdoor activity, you can qualify for programs like CO Active Colorado.
One of the disadvantages is the rising cost of living in the state. Yes, we did mention that as an advantage because it means that consumers have more disposable income. But it also means a rising cost in real estate and other business costs. It can be quite difficult for small businesses to hire and keep employees.
Because businesses are flocking to Colorado, it can be quite difficult to find commercial space. For instance, the cannabis industry is so prevalent in the state that it's nearly impossible to find warehouse space. It's also expensive to rent or lease real estate in big cities or metropolitan areas. Many business owners have made the decision to move to smaller cities, suburban areas and less populated places because of this.
Procedure of Establishing an LLC in Colorado
Before you learn everything about the time it takes to form an LLC, you should learn the process of forming an LLC in Colorado. In this section, I'll break down each step so you have a more thorough understanding of the overall time frame.
Necessary Documentation for Filing an LLC in Colorado
Of course how long it takes to get a Colorado LLC depends on some things on your end, so to ensure speedy processing times you'll need to gather some documents yourself before you file. You'll need an EIN (Employer Identification Number), which you can get from the Internal Revenue Service (IRS) at no cost. You'll need a name reservation application for your business, which comes from the Secretary of State and costs $25. You'll also need your LLC Articles of Organization, which comes from the Secretary of State, as well, and costs $50. You should have an LLC Operating Agreement, too. It's not required in the state of Colorado, but it's an important internal document that you shouldn't skip. You'll need your initial report, also from the Secretary of State. You'll need to register for various taxes, which you can sign up for with the Colorado Department of Revenue on the state level, but you'll need to find out about taxes on the local level, as well. You'll need a business license from the state, and you'll probably need one on a local level, too.
Legal Requirements for Starting an LLC in Colorado
Here's the process for forming an LLC in Colorado.
- Get Your Articles of Organization: The first step on your journey to form a Limited Liability Company in the state of Colorado is to get the Articles of Organization for your company. This is the primary form you need to start your LLC, so it's crucial that you obtain one! You can get the form from the Colorado Secretary of State.
- Choose Your Business Name: This probably seems like an easy task, but the state of Colorado requires your business name to be unique. You can't use the name if another business in the state is already using it, or if it's close to another business's name. To find out if your chosen business name is available, run a business name availability search on the Colorado Secretary of State's website.
- Pick Your Registered Agent: It isn't legal in the state of Colorado to start an LLC without designating a registered agent. No, really, you can't even fill out the paperwork without having one! A registered agent is someone who receives government mail and service of process (although not general mail) on behalf of your business. You can choose to designate a person, like an employee or family member, or a registered agent service.
- Carefully Choose Your Business Address: Your business address is a matter of public record because other businesses, the government, customers, and law firms need to be able to find it. Because of this, most business owners don't want to use their personal or home address. You wouldn't want everyone finding your house, after all. So, you should put some thought into your business address. Some states will allow businesses to use a virtual address or virtual office for privacy reasons.
- File Articles of Organization for Your LLC: The last official step is filing your Articles of Organization. But before you do that, you'll need to choose who will sign the Articles as your organizer. Many LLC owners do this themselves, but know that if you take this approach your name and information will be made public record. To avoid that, you can have a friend, employee or an LLC formation service sign the Articles of Organization for you and file them.
After you file your Articles of Organization, you'll have to submit a periodic report to the Secretary of State every year to ensure that your LLC remains in good standing with the state government. For more information about additional post-formation activities you're required to complete, read How to Start an LLC in Colorado.
Time Frame for Establishing an LLC in Colorado
Now for the section of the article that you're likely to find most interesting! We're going to give you all of the information to answer the question “How long does it take to get an LLC in Colorado?”.
How Long Does the Initial Paperwork Take in Colorado?
The Colorado Secretary of State doesn't provide a mail option for filing. The only way to file is online, and online processing times are immediate. So, all-in-all, you can get your LLC in under a business day in Colorado.
Processing Times in the State of Colorado
If you're interested in learning how long it takes to form an LLC in your state, then you should know the difference between processing and approval times. Processing times are how long it takes the state government to get to and go over your paperwork and documents, and the approval time is how long it takes to get your LLC approved- including processing times.
Processing times in Colorado are immediate if you file online, and since they don't have an option for mail filings, that means that all processing times in Colorado are immediate. You'll be able to download and print out your formation documents once the Secretary of State approves your LLC, so there's no mail or transit delay.
Common Delays in the LLC Formation Process in Colorado
Here's a look at some of the things that can hold up the formation process of your Limited Liability Company.
If your business entity is complex, then it could lead to longer processing times. This means if your business's operating rules are complicated, there are multiple business entities involved with your business, or if you have a long list of LLC members, it could processing could take longer because the Secretary of State will have to take more time to verify everything.
If the Colorado Secretary of State has a filing backlog, then processing times could take longer. This means that if they have lots of forms and applications to go through, your approval time could be delayed.
If you haven't entered all of your information accurately, it could cause delays. In particular, the LLC Operating Agreement and the Articles of Organization must have spot-on information. In some cases, inaccurate information could lead to your submission being rejected. To avoid these mishaps, you can use an LLC formation service that has a 100% accuracy guarantee.
Not meeting IRS (Internal Revenue Service) requirements for LLCs can hold up your LLC's formation, too.
Expedited Processing for LLC Formation in Colorado
Obviously, if you want to form your LLC in a hurry, expedited processing would be ideal. Here's everything you need to know about expedited LLC processing in Colorado.
What Are the Expedited Processing Options Available?
Unfortunately, there aren't expedited processing options available in Colorado. But it's because online processing times are immediate, and as soon as your LLC is approved you can download and print out your paperwork, there aren't any additional mail times or transit times to warrant expedited processing.
Comparing LLC Formation Time Frame in Colorado with Other States
Whether you're looking at multiple states to potentially form an LLC in, or you already know you want to form an LLC in the state of Colorado, it's advisable to look at the formation time frames in other states to know where Colorado stands and get a better understanding of its time frames. Here's a look at how the processing time frames in Colorado compare to other states.
Brief Comparison with Key States
In Colorado, there aren't any options to file by mail, and online filings are processed immediately, eliminating the need for expedited processing in the state.
Online filings are processed immediately, once the Secretary of State processes them. Some states may actually get to their online filings faster through expedited filing. For instance, you can have your formation documents processed within an hour in West Virginia, Montana, Nevada, Delaware and Michigan if you pay extra for expedited processing.
But there are LOTS of states that are slower. In Arizona, online filing takes 14-16 days, Maryland takes 2 weeks, Washington takes 12-14 days, and Texas takes 13-15 days. And expedited processing in other states doesn't mean that it's faster than Colorado's processing times. Even with expedited processing, it takes 7 days in Maryland, and in Arizona it takes 5 days.
So, Colorado is definitely one of the faster states to form an LLC in.
Why is Colorado a Favorable Place for Forming an LLC?
Colorado has reasonably fast processing time frames to form an LLC. The economy in Colorado is constantly growing, and the increased cost of living makes it a good place to start a business because consumers actually have money to spend on services and wares. And other business owners in the state are incredibly supportive of other small businesses.
