Choosing a Business Entity in Colorado
Colorado business owners choose among sole proprietorships and general partnerships (no formation filing), LLCs (Colorado Limited Liability Company Act, C.R.S. § 7-80-101 et seq.), and corporations (Colorado Business Corporation Act, C.R.S. Title 7, Articles 101–117). LLCs and corporations are formed by filing with the Secretary of State and generally shield owners' personal assets. LLCs and partnerships are usually pass-through for tax; corporations are taxed at the entity level unless they make a federal S-corp election.
By Find Local Law Editorial Team · Last reviewed: May 26, 2026
Researched and drafted with AI assistance and verified against primary sources (statutes, Judicial Council forms, and official court websites). This is general information, not legal advice.
This is general information, not legal advice. A Colorado attorney can help you pick the right structure for your situation.
The entity you choose shapes your liability, your taxes, and your paperwork. Here’s how Colorado’s common options compare.
No-filing structures
A sole proprietorship (one owner) and a general partnership (two or more owners) need no formation filing with the state. They’re simple to start, but the owners have no liability shield — personal assets can be exposed to business debts.
Filed entities with a liability shield
- LLC — governed by the Colorado Limited Liability Company Act (C.R.S. § 7-80-101 et seq.). Formed by filing with the Colorado Secretary of State and generally shields owners’ personal assets.
- Corporation — governed by the Colorado Business Corporation Act (C.R.S. Title 7, Articles 101–117). Also formed by filing with the Secretary of State and generally shields shareholders’ personal assets.
How taxes differ
LLCs and partnerships are typically pass-through — profits flow to owners’ personal returns. Corporations are taxed at the entity level unless they make a federal S-corporation election with the IRS.
Next steps
Ready to file? See how to form an LLC or how to form a corporation. For help choosing, connect with a lawyer.
Connect with a local attorney
Tell us about your situation and we'll match you with a local California attorney who handles matters like yours. Free, no obligation.
Start your free intakeFrequently asked questions
- Which Colorado entities require a state filing?
- LLCs and corporations are formed by filing with the Colorado Secretary of State. Sole proprietorships and general partnerships need no formation filing.
- Which structures protect my personal assets?
- LLCs (C.R.S. § 7-80-101 et seq.) and corporations (Colorado Business Corporation Act, C.R.S. Title 7, Articles 101–117) generally shield owners' personal assets. A sole proprietor or general partner does not have that shield.
- How are these entities taxed?
- LLCs and partnerships are typically pass-through for tax. Corporations are taxed at the entity level unless they make a federal S-corporation election with the IRS.
Sources
Related guides
- Business Disputes in Colorado When a contract is breached in Colorado, remedies include money damages and, where damages are inadequate, specific performance. Deadlines matter: most contract actions must be brought within 3 years (C.R.S. § 13-80-101), but actions to collect a liquidated or determinable debt have 6 years (C.R.S. § 13-80-103.5). Where there's doubt, Colorado courts favor the longer period. Confirm current deadlines before relying on them.
- Contract Basics in Colorado A contract needs offer, acceptance, and consideration. Colorado's statute of frauds (C.R.S. § 38-10-112) requires a signed writing for certain agreements — including those not to be performed within one year, a promise to answer for another's debt, and agreements in consideration of marriage. A contract for the sale of land or an interest in land must be in writing under a separate section (C.R.S. § 38-10-108).
- How to Form a Corporation in Colorado To form a Colorado corporation you file Articles of Incorporation under the Colorado Business Corporation Act (C.R.S. § 7-102-102), stating the corporate name, authorized shares, registered agent, principal office, and incorporators. The corporation must maintain a registered agent (C.R.S. § 7-90-701) and file the periodic report (C.R.S. § 7-90-501). An 'S corporation' is a federal tax election with the IRS, not a separate Colorado entity. Fees apply; confirm current amounts on coloradosos.gov.
- How to Form an LLC in Colorado To form a Colorado LLC you file Articles of Organization with the Colorado Secretary of State under C.R.S. § 7-80-204, stating the LLC name, principal office, registered agent, and management structure. The LLC must continuously maintain a registered agent (C.R.S. § 7-90-701) and file a periodic report (C.R.S. § 7-90-501) — first due by the last day of the second month after the first anniversary, then annually. Filing and periodic-report fees apply; confirm current fees on coloradosos.gov.
- Trade Name (DBA) Registration in Colorado A person or entity transacting business in Colorado under a name other than its true name must file a Statement of Trade Name with the Colorado Secretary of State (C.R.S. § 7-71-101). Unlike some states, Colorado has no newspaper-publication requirement — it's just a Secretary of State filing. Fees apply; confirm current amounts on coloradosos.gov.
- Related area: Real Property in Colorado