Colorado LLC Operating Agreement Template [PDF]

The Colorado limited liability company (LLC) operating agreement is a legal document that defines how the company will operate on a daily basis and regulates the status of each member within the company.

The LLC operating agreement, or business operating agreement, also outlines the initial contribution of each member and their share in the company’s interests. If the members decide to manage the company personally, the document defines their managerial duties in the company.

Is an Operating Agreement Required in Colorado?

No, the operating agreement is not a required document when establishing an LLC in Colorado.

However, parties still choose to draft it since the document provides essential information about the company’s operation. This helps the parties optimize all the business procedures within the company and prevents potential misunderstandings and disputes.

4 Main Types of Operating Agreements

In Colorado, there are four main types of operating agreements the parties can choose from when establishing an LLC:

Types of Operating Agreements

Single-member LLC operating agreement: Used in situations where there is only one member establishing an LLC.

Multi-member LLC operating agreement: Used when there are two or more members forming an LLC to regulate their mutual relationship and define their rights and duties.
Member-managed LLC operating agreement: This type is used when members decide to directly manage the LLC. It defines the managerial role of each member within the LLC.
Manager-managed LLC operating agreement: Used in case the members decide to delegate the management of their LLC to a professional manager.

Laws and Legal Requirements for LLC Operating Agreements in Colorado

Title 7, Article 80 of the Colorado Revised Statutes regulates the LLCs in Colorado.

Two sections within this article regulate the operating agreement:

§ 7-80-108: Regulates the effect of operating agreements, non-waivable provisions, and statutes of fraud.
§ 7-80-401: Regulates the amendments to the operating agreement.

§ 7-80-102(11)(a) also provides the definition of an operating agreement:

“Operating agreement” means any agreement of all of the members as to the affairs of a limited liability company and the conduct of its business. Except as otherwise provided in this article or as otherwise required by a written operating agreement, the operating agreement need not be in writing. An operating agreement may contain any provisions required or permitted by section 7-80-108 (1). An operating agreement includes any amendments to the operating agreement.

How to Form a Limited Liability Company (LLC) in Colorado

To form a limited liability company in Colorado, you should follow the steps below:

How to Form a LLC in Colorado

#1. Choose a Business Name For Your LLC

In Colorado, the business name of an LLC must be unique and distinguishable from business names used by other companies within the state.

Therefore, after finding a name for your company and before registering it, you should check if the business name you choose for your LLC is distinguishable from other business names by doing a name availability search.

#2. Submit Articles of Organization

For domestic LLCs, the Articles of Organization should be submitted via the Secretary of State online portal.

For foreign LLCs, the members should submit the Statement of Foreign Entity Authority. This can be done either online or by submitting the statement in hard copy.

#3. Pay the Required Fee

After completing the application, you should pay the application fee.

For domestic LLCs, the application fee is $50, while for foreign LLCs, this fee is $100.

#4. Create your LLC Operating Agreement

Although the operating agreement is not a required document when forming an LLC in Colorado, it is always recommended to draft it since it provides stability for all the members of the company.

For single-member LLCs, the operating agreement is also useful since it can be used to distinguish the business entity from the member as an individual.

#5. Apply For an Employer Identification Number (EIN)

In order to open a company bank account, hire employees, apply for loans, and do other related activities, you should apply for an employer identification number after registering your company.

In this way, the Internal Revenue Service (IRS) will be able to track your financial activities. To apply for an EIN, you should apply through the IRS website or submit Form SS-4.