your one-stop resource for everything related to starting a small business in colorado.

Legal Structure & Registration

When starting your own business, you must carefully choose the appropriate legal structure for your venture. You should examine the characteristics of each structure along with the needs and desires you have for your business. All legal structures are set up at the Secretary of State online at For more information and registration, visit

There are several issues that you should consider when determining the legal structure of your business. First, to what extent will you be personally at financial and legal risk? Second, who will have the controlling interest in the business? Third, how will the business be financed? There are advantages and disadvantages to each legal structure. As a new business entrepreneur, you should examine all the characteristics and determine which is best suited to your needs.

As you decide upon your legal structure, you should carefully evaluate both your present and future needs for operating your business. To avoid duplication of legal expenses, licensing and paperwork, analyze your various options and choose the business structure that will meet your long-term needs, rather than choosing a business structure solely for its short-term convenience. While it is not a requirement, it may be valuable to consult an attorney. See the section on Choosing Advisors for suggestions on how to select an attorney and other professional advisors.

A Sole Proprietorship is a business owned and operated by a single individual.

A General Partnership is a business owned by two or more individuals or other business entities.

A Limited Partnership is a business owned by two or more individuals or other business entities in which at least one of the partners has limited liability protection.

A Corporation is a legal entity that exists separately from the people who create it.

An S Corporation is not a separate form of legal structure, but rather a special tax status granted by federal tax law to a corporation to tax the business’ income like a partnership or a sole proprietorship.

An LLC combines the concepts of partnerships for tax purposes and corporations for liability purposes.

Registered Limited Liability Partnerships (LLP) and Registered Limited Liability Limited Partnerships (LLLP) limit a partner’s personal liability in the business to their personal investment in the business, except in areas related to their personal professional conduct.

Limited Partnership Associations are created by filing “Articles of Association” with the Colorado Secretary of State.

Nonprofit is a term that refers to an organization which uses all profits to further organizational goals instead of distributing the profits to shareholders, organizers or owners.

A cooperative is a legal organization that is formed by a group of individuals and/or businesses that desire to work together for their “cooperative” benefit.

Any out of state business that will have ongoing business in the State of Colorado must register with the Colorado Secretary of State.

A corporation may raise capital to begin the business by two different means: equity financing and borrowing money.

If you are a sole proprietor or general partnership and will be doing business under a name other than your own legal name(s), you must register your trade name(s) with the Colorado Secretary of State online.

An attorney is not required to file Articles of Incorporation. However, if you decide not to use an attorney, you should educate yourself thoroughly regarding all aspects of a corporation.

Print Friendly, PDF & Email