As LLC owners many questions bother you when you plan to move you business to Colorado (CO). Some of the questions are, “Does Colorado allow LLC domestication?”, “Is Colorado LLC domestication a good choice?” or “How to domesticate an LLC in Colorado?
If you are in a similar situation, keep on reading. This Colorado LLC domestication guide has all the information that you seek.
What is Colorado LLC Domestication?
LLC domestication in Colorado means changing the location or domicile of your LLC from any state into Colorado. In other words, if you want to move your Georgia LLC to Colorado, for instance, LLC domestication is the best way to do so.
In Colarado, LLC Domestication is called Conversion, while in many other states, LLC Conversion means changing LLC to any other entity such as a corporation, LLP, etc.
By LLC domestication, you change the governing laws of your LLC. Domesticating your LLC into Colorado will have the following benefits over other methods of moving your LLC to Colorado:
- LLC domestication allows you to maintain previous business relationships.
- No need to renew contracts made in the previous state.
- No need to change bank accounts and credit ratings.
- You can retain your EIN (Tax ID Number).
- No need to rehire employees.
- No need to transfer assets.
How to Domesticate your LLC in Colorado
There's always something new to learn in the ever-changing landscape of business, and this same goes for LLC domestication in Colorado. Below, we explained the process of transferring an LLC from any state to Colorado via CO LLC domestication in 3 simple steps.
Acquire a Certificate of Good Standing
A certificate of good standing is also called a certificate of existence or certificate of status in some states. It is a legal document issued by the state authorities, usually the secretary of state.
In Colorado, the certificate of Good Standing is not mandatory to apply for a Statement of Conversion-Articles of Organization to domesticate your out-of-state LLC in Colorado.
However, Getting a Certificate of Good standing will be better as you are moving your business out from the LLC's home state, as this document will verify that your business is in good standing with the state.
To prove that your LLC is up to date on all important business marks, you need to submit a certificate of status.
After getting a certificate of good standing, you will have proof that you have timely paid your LLC taxes, submitted LLC annual reports and fees, and follow the state laws in all business operations in the state where you initially registered your LLC.
Approval of LLC Domestication
Before you file articles of domestication with the Colorado Department of State, you need to acquire approval from the state where you originally formed your LLC.
Pursuant to a plan of conversion must comply with section 7-90-201.3 of the Colorado Revised Statutes (C.R.S.). The LLC conversion must be approved in accordance with section 7-90-201.4.
File an Articles of Domestication Colorado
To formally move your LLC from the LLC's home state to Colorado, you need to file a statement of conversion known as articles of domestication in other states.
With the Colorado Statement of conversion, you will see Colorado articles of organization form as well. So you need to file the Colorado certificate of domestication along with the Colorado articles of domestication.
The LLC Statement of Conversion form with Colorado Articles of Organization must be filed electronically. Paper forms are not accepted.
However, you can have an overview of what Colorado statement of conversion must include by looking at the sample form. To download the sample forms, click on the link below:
Requirements to Complete Colorado Articles of Domestication Form
As mentioned earlier that Colorado articles of domestication are filed with the Colorado articles or organization; the following information/documents will be needed to complete the LLC domestication process:
- LLC domestication approval
- Name of the domesticating entity (The name of your LLC with which you used to operate your business in the previous state)
- The name of the previous state where your LLC was registered
- The date when your LLC was formed initially
- Colorado articles of organization form with Colorado registered agent information
- what will be the Colorado LLC management structure
- Signature of the authorized person to initiate LLC domestication
- The effective date of the LLC domestication, if it is not the same as the date of filing of the Colorado articles of domestication
Colorado LLC Domestication Fee (Cost)
To convert an out-of-state LLC into a Colorado LLC, you need to pay the following fee to the Colorado Department of State along with the Colorado articles of domestication:
- Articles of Domestication: $50
- Articles of Organization: $50
- Total to Domesticate and file: $100
Alternatives to LLC Domestication Colorado
If you do not plan to move your LLC to Colorado permanently, or for any other reason Colorado LLC domestication does not seem suitable, the followings are the alternative to Colorado LLC domestication:
What Next After Colorado LLC Domestication?
Once the state of Colorado domesticates your LLC, the laws of the previous state will no longer apply to your LLC.
Now your LLC will be governed under the LLC statute of Colorado. Now, to remain compliant with the laws of Colorado, you need to:
- Make sure you pay outstanding LLC federal taxes or debts in the previous state.
- Keep your registered agent information up to date. If you don't have one, you can review top registered agent services here.
- Follow your LLC operating agreement.
- Acquire licenses and permits specifically required by the new state.
- Regularly submit annual reports and fees.
- Pay Colorado sales tax if applicable.
Moving an LLC out of Colorado
The Colorado Department of state allows an LLC to move out of Colorado via LLC domestication. However, the law of the other state must permit LLC domestication in its statute.
For the states that allow LLC domestication, you need to submit a Colorado certificate of status to domesticate your LLC there. Click on the following link to get a Colorado certificate of status.
FAQs on How to Domesticate an LLC in Colorado
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