Limited Liability Company


The Colorado LLC is now chosen by Colorado business owners over 4 times as often as the Co corporation.

The reason for this is because the limited liability company allows them to limited their liability and have an easy to maintain legal entity without a lot of complication.

In this article, we will explain exactly how the Colorado LLC formation laws extend these important asset and liability safeguards to Colorado LLC business owners.

The Colorado LLC Protection Provision

There is a specific provision in the Colorado Limited Liability Company Act which states that members and managers are not liable personally for the dents, obligations and other liability of an LLC business.

Without this declaration in the laws, a business owner is at complete risk for his or her business activity.  This is why it is so risky to run a sole proprietor business these days.  Given the rising number of small business lawsuits, there is no reason not to do a Colorado LLC formation to protect yourself.

Other Colorado LLC Protection Provisions

Most other states end with the protection provision, but the Colorado Limited Liability Company Act goes even further to protect LLC owners with additional protections.

One worth noting is that the failure of an LLC to observe the formalities relating to the management of its business and affairs is not in itself a ground for imposing personal liability on the members.

This provision provides extra comfort for a member of a Colorado limited liability company by limiting the basis upon which someone can attempt to pierce the LLC protection layer of the legal entity.

Other states will allow the protection layer to be pierced and will hold owners personally liable despite an LLC if formalities are not adhered to.

Now, this is not a reason not to maintain your Colorado LLC properly and maintain recommended paperwork, but it should provide you with some reassurances that, after a Colorado LLC formation, the law is on your side when it comes to protecting you from personal loss due to business activity.


As noted above, the Colorado LLC is the most popular choice of entity for small business because of its strong protection features and because it is quite easy to maintain and operate.  Just ensure that your formation is done properly and in strict compliance with the laws to ensure you gain these protection benefits.

Click Here for a FREE Guide on the Benefits a Colorado LLC Formation for Co Business Owners