Colorado Limited Liability Company, LLC
Colorado Limited Liability – Protecting Your Assets
Personal liability when operating a business is one main issue that most Colorado business owners tend not to worry about until someone tries to pierce the corporate veil (break the legal protections against personal liability when the business cannot afford the debt.) By then it can be too late. Having a good attorney that can advise you how to run your business can avoid personal liability claims.
Personal Liability Under Colorado Business Law
As compared to a sole proprietorship or general partnership where your personal assets can be exposed to business debt, operating a business entity such as a limited liability company can shield your personal assets such as your car, personal bank accounts and home for exposure to creditors such as landlords and other creditors. When you for a new business entity, ensure that you consult with a reputable Colorado business lawyer that can explain the do’s and don’ts. For example,
- Never writer business checks in just your personal name
- Always ensure that you practice responsible behavior when contracting with third parties (avoid negligence)
- When advertising your business always add the proper designation ( LLC, LLP etc.)
- Ensure that the business formation is done correctly with the Secretary of State
- Ensure that you understand your role when you engage in contracts
Tax and Liability
A Colorado LLC is considered a “pass through” tax entity. This means that the profit and losses of the company are passed on to those who own it and reported on their personal tax filings / returns. The Colorado Limited Liability Company does not pay business taxes at the company level. Any tax due is handled on the personal taxes of the individual owners. Colorado llc formation has tax advantages that include the option to have the company taxed as a corporation, otherwise it is taxed as a partnership or sole proprietorship, however the need to file itemized business deductions, or a schedule K-1, is unnecessary. Nothing substitutes for the advice of a Colorado business law attorney and tax lawyer. For help forming a new Colorado limited liability company, contact the Denver lawyers of Watson & Associates. Call toll free 1-866-601-5518.
From the Colorado Secretary of State
If you forgot to put “LLC”, “Inc”, “Corp”, or another required term or abbreviation in your business name.
If you did not include a required term or abbreviation indicating your type of entity when you registered your entity, you may add a term or abbreviation by filing a Statement of Correction or by filing Articles of Amendment.
Completing and submitting the Statement of Correction Correcting Information Other Than Principal Office Address or Registered Agent Information will allow you to correct the name by adding the appropriate term or abbreviation. Filing a Statement of Correction indicates that the name should have included the term or abbreviation at the time of registration.
Completing the Articles of Amendment will allow you to change the name. Articles of Amendment may be filed online.
To file a Statement of Correction or Articles of Amendment, go to the Business Home page, click “File a document affecting an existing record”, search for the entity, confirm you found the correct entity, and then select the document to be filed.
Most business entities are required by law to include a term or abbreviation indicating the type of entity, such as “LLC”, “Inc”, or “Corp” in their names. Specifically, a corporation’s name is required to include the term or abbreviation “corporation”, “incorporated”, “company”, “limited”, “corp”, “inc.”, “co.” or “ltd.” A limited liability company’s name is required to include the term or abbreviation “limited liability company”, “ltd. liability company”, “limited liability co.”, “ltd. Liability.co.”, “limited”, “l.l.c.”, “llc”, or “ltdThe terms or abbreviations may be capitalized in any fashion.
For additial assistance with your Colorado limited liability company issues contact Watson & Associates, LLC at 1-866-601-5518.
