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Legal Topic Library

Business Creation – LLCs

FAQs

What are the steps to create a business?

Forming an LLC and Corporation are relatively similar. You need to file your business with the Colorado Secretary of State and also receive an Employer Identification Number with the IRS. You should also draft an Operating Agreement for an LLC or Bylaws for a Corporation and issue Membership Certificates for an LLC or stock for a Corporation. There are other documents that you should also develop, such as policies and procedures, contracts, employee manuals or Independent Contractor Agreements, and others.

What considerations to I need to have to decide if I can successfully start a business?

You have two overarching considerations, that is are business and legal considerations. For the business considerations, you need to look objectively at your business idea, business development plans, investments, capital, management, and other factors. You must be able to objectively see a roadmap to profitability. For the legal consideration, you need to make sure that you have selected the best business entity properly filed your organizational documents and received an Employer Identification Number, and drafted the most appropriate management and ownership documents. As a business law attorney, I can help you with these considerations.

How do I form an LLC?

To form an LLC in Colorado, you need to first file Articles of Organization with the Colorado Secretary of State, and then file for an Employer Identification Number with the IRS. While these are steps that can be done on your own, I would advise you to discuss starting your business with me beforehand to develop a comprehensive strategy.

What are the advantages of a Limited Liability Company?

An LLC offers the liability protection of a corporation and the taxation structure of a partnership. Liability protection prevents you from being personally liable for any liability arising from your business and vice versa. Because an LLC is taxed as partnership, business income is taxed as personal income and not subject to the corporate double taxation.

What are the advantages of a C-Corporation?

A C-Corporation offers two major advantages: liability protection and scalability. A C-Corporation protects you from liability arising from your business so that creditors or judgment-holders do not easily reach into your personal assets. A C-Corporation is scalable in the sense that many large corporations are C-Corporations. They have very sophisticated governing procedures that are appropriate for large corporations.

When do I want to form an S-Corporation?

An S-Corporation offers you an advantageous tax structure if you are working your business yourself and within a certain range of corporate income. For a more detailed conversation, I advise you to meet with me to discuss whether you want to form an S-Corporation.

Do I want to create a Partnership?

The decision to create a partnership or any form of business entity is a multi-factored decision. Please contact me to schedule an appointment to determine if a partnership is the right structure for you.

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