There are many reasons why a Colorado LLC may be dissolved, including failure to file a periodic report. When this happens, as the owner you may wish to reinstate or reopen your LLC immediately or in the future. But what exactly is an LLC and how do the local legal regulations in Colorado impact this entity? Here, we explore how an LLC is defined in Colorado and what it means for an LLC to be dissolved. We will then cover the cost of and requirements for reinstating your LLC so you can regain the benefits of having an LLC.
Once your LLC is back up and running, it’s important to make sure that it’s set up properly to make sure you get the full asset protection benefits. Proper setup includes having an attorney-approved operating agreement, proper tax strategy, and considering the implications of LLC privacy.
To begin with, the definition of a limited liability company (LLC) is the same across the United States. An LLC is a business entity that does not require the owners of the company to take on the company debts - you are not personally responsible for liabilities incurred by your company. It can also be referred to as a private limited company internationally. An LLC brings together the rules that govern a corporation with those of a sole proprietorship venture.
In regards to how this benefits a business owner, you are granted more assurance if your business happens to fail. In an LLC, the owners are referred to as members, and these members can consist of many different types of people and businesses. For example, depending on your state, an LLC may be made up of individual investors, foreign bodies, and corporations. Single-member LLCs are also allowed.
However, not every business can be registered as an LLC. This is, again, dependent on your state. In Colorado, there are no specific requirements regarding the membership of your LLC, but the name of the LLC cannot have words such as insurance, bank, trust, or insurer. This is also true in other states, where banks and insurance-based businesses cannot generally be registered as limited liability companies.
In Colorado, an LLC may dissolve for a range of different reasons. Dissolving an LLC refers to the formal process of closing the company down. This means that your LLC will no longer be considered a business entity, and is not beholden to paying taxes, filing documents, or paying any fees related to your LLC. In essence, the LLC ceases to exist, legally speaking. Unless an LLC is formally terminated, you will still be liable for fees, taxes, and filing documentation until you complete the dissolvement process. After an LLC is dissolved, it will expire and cannot be considered operational.
There are two main types of dissolvement when it comes to an LLC. These are:
An LLC may be dissolved voluntarily by the owners/members of the company. This means that the dissolution is entirely your choice or a mutual agreement with other members of the LLC. State or national regulations have not dictated this.
An involuntary dissolvement refers to an LLC being dissolved by the state. In this case, you will be instructed to dissolve the company due to local regulations and instructions. This is also known as administrative dissolution. However, it is worth noting that the state of Colorado ceased administrative dissolutions in 2005.
Limited liability companies dissolve for a wide range of reasons, both voluntary and involuntary. These can include:
Once an LLC has been dissolved in Colorado, members may decide to either register a new LLC with a similar framework to the dissolved LLC, or reinstate the dissolved LLC. In order to reinstate your LLC, you will need to:
You will be able to find your LLC on the Colorado Secretary of State website. When you find this, you can find your LLC ID number and click on Confirm. From here, you will find the Articles of Reinstatement link.
Once you have found your LLC, you will need to file the Articles of Reinstatement, which comes with a fee. This will need to be filed online, and cannot be done via mail.
When filling out the Statement Curing Delinquency documentation, you will be required to enter the name of your LLC and where it was formed and dissolved, as well as the contact details of your registered agent. You will also need to fill in the address of your office. If your name has changed following reinstatement, this will need to be stated.
While filling this out, check details such as your office address and registered agent to ensure these are current. Your contact details will be entered under Notice. At this point, you can submit your application and pay the application fee. Once this is paid, your reinstatement is confirmed.
This process is accurate if you registered and operated your LLC in Colorado. However, the process may differ if you operate in a different state. You may have expanded your business operations into multiple states or perhaps you have moved out of state but continue to operate your business elsewhere. This is completely legal but can have some ramifications when it comes to both running and reinstating your LLC. Depending on the state you operate in, you will not only be beholden to the regulations under Colorado law but under the laws of that specific state.
Complying with different state laws can present a challenge, as they can differ greatly. For example, some states allow administrative dissolvement. You will also need to pay the taxes and fees relevant to that specific state. It is also possible that the LLC name you use in Colorado will not be available when reinstating in a different state.
When filing the Articles of Reinstatement, you will need to pay a $100 fee for reopening Colorado LLCs. You will also need to consider paying any other fees that you owe or penalties that have been incurred. While you are not personally liable for debts incurred due to your LLC failing, you will need to clear these debts in order to reopen or reinstate your LLC.
You may choose to either reinstate or start a new LLC in Colorado. Each of these options comes with advantages and disadvantages. The correct choice for you will vary based on your circumstances and goals - this can include considerations such as the reputation of your business, whether you wish to start a new kind of business, and your financial history.
It can be challenging to decide whether to reinstate your Colorado LLC or open a new LLC after dissolution has occurred. Whatever the circumstances behind your dissolution, choosing the right path for your business practices is essential. Wyoming LLC Attorney can help you to explore your options and find the best choice for your LLC. We can assess the legal side of your limited liability company and provide a 24-hour filing guarantee so you can rely on our fast service. Whether you are overwhelmed by documentation or want to access expert legal advice on your LLC, Wyoming LLC Attorney is available for all your needs. Get in touch to discuss your unique situation in more detail.