Choosing whether to start a Colorado limited liability corporation vs limited liability company (LLC) is a question that many small business owners ask in Colorado. Understanding the differences can turn to the specific purpose of the business entity.
One of the common issues between a limited liability company vs corporation in Colorado is that there is some personal protection from business debts or judgments made against the business. In addition, compliance with the underlying regulatory provisions for business can be a deciding factor when looking for personal liability.
Limited Liability Corporation vs Limited Liability Company LLC Requirements
The following are some of the obvious differences between the two business entities.
Limited Liability Company
- There is no set LLC limits on the number of owners
- No complex secretary of state annual Colorado LLC requirements
- There are flow-through LLC tax implications to individual tax returns
- LLC owners cannot engage in splitting business income to evade IRS corporation taxes
- A Colorado limited liability corporation can use stock shares to solicit investors
- Corporate income can be split
- More complex statutory annual Colorado LLC requirements (meetings and minutes)
- Double corporation tax
Whether your business is more exposed to lawsuits and litigation can be a deciding factor when choosing a limited liability company vs corporation Personal Liability Protection Under Colorado LLC Laws.
Knowing the Difference Between a Limited Liability Corporation vs Limited Liability Company Under Colorado LLC Laws Can Help You Setup the Right Business Entity
Although forming a limited liability company under Colorado LLC laws is the common practice for new commercial business owners, individuals must also look at the compliance requirements for business operations.
UCC business operations: Whether your company will utilize the services of independent contractors and perform operations under the Uniform Commercial Code can make the difference when forming an LLC corporation vs limited liability company.
There several other considerations to look at when you form your new business. Getting the help of a Colorado limited liability company law attorney can prove to be fruitful. See additional information about LLC vs Corporation.
To get started, call the Colorado business law attorneys at Watson & Associates, LLC. 1-866-601-5518.