The below table offers general information about each entity type. For more detailed information, we recommend reaching out directly to an attorney. The Colorado Secretary of State also has general resources related to the various business entities available in Colorado.
| Entity Type | Liability Protection | Formation Filing | Governing Statute(s) | Formalities | Common Tax Treatment (General) | Notes |
|---|---|---|---|---|---|---|
| Sole Proprietorship | None — owner personally liable. | None; may need trade name (DBA) or local license. | Local licensing laws. | Minimal — just licenses/DBA. | Income reported on owner’s 1040 Schedule C. | Easiest and cheapest; no separation from owner, but no liability protection. |
| General Partnership (GP) | Partners personally liable (joint & several). | None required; partnership agreement optional. | Colorado Uniform Partnership Act (C.R.S. Title 7, Art. 64). | Very few; written agreement recommended. | Pass-through taxation — partners report income/loss. | Can form unintentionally when two+ people do business together. |
| Limited Partnership (LP) | General partners personally liable; limited partners generally shielded. | Certificate of Limited Partnership. | Colorado Uniform Limited Partnership Act (C.R.S. Title 7, Art. 62). | Must maintain records; separation of GP vs. LP roles. | Pass-through taxation by default. | Used for investment structures; LPs limited in management role. |
| Limited Liability Partnership (LLP) | Partners shielded from some liabilities. | Statement of Registration as LLP. | Colorado Uniform Partnership Act. | Must file/renew LLP registration; partnership agreement recommended. | Pass-through taxation. | Often used by professional practices. |
| Limited Liability Limited Partnership (LLLP) | Provides liability protection for both general and limited partners. | Certificate of Limited Partnership electing LLLP status. | Colorado Uniform Limited Partnership Act. | Similar to LP formalities plus annual renewal. | Pass-through taxation. | Colorado is one of the few states that recognizes LLLPs. |
| Limited Liability Company (LLC) | Members protected from business debts. | Articles of Organization. | Colorado Limited Liability Company Act (C.R.S. Title 7, Art. 80). | Must keep separate finances; operating agreement recommended. | Pass-through by default; may elect C or S corp tax treatment. | Flexible; popular for small/medium businesses. |
| Corporation (C Corp) | Strong liability shield. | Articles of Incorporation. | Colorado Business Corporation Act (C.R.S. Title 7, Art. 101+). | Must adopt bylaws, issue shares, hold meetings, keep records. | Separate entity tax; “double taxation” of dividends. | Best for raising outside capital. |
| Professional Corporation (PC) | Shield for business debts; individuals still liable for malpractice. | Articles of Incorporation (with professional designation). | Colorado Professional Service Corporation Act (C.R.S. Title 12, Art. 240+). | Similar to corporations; ownership limited to licensed professionals. | Taxed as C Corp unless S election made. | For licensed pros (lawyers, doctors, CPAs). |
| Professional LLC (PLLC) | Liability shield for business debts; malpractice liability remains personal. | Articles of Organization (professional purpose). | Colorado LLC Act plus professional licensing board rules. | Similar to LLCs; must comply with licensing restrictions. | Pass-through by default; may elect S Corp. | Alternative to PC for professionals. |
| S Corporation (tax status) | Same as underlying corporation or LLC. | Not separate filing; IRS Form 2553 election. | Internal Revenue Code. | Same formalities as Corp/LLC. | Federal pass-through taxation; not recognized as separate CO entity. | Only available if eligibility rules are met (≤100 shareholders, domestic, only individuals as shareholders, one class of stock). Note that an S Corporation is a tax status and not a type of legal entity recognized by the state. As such, a company can be both an LLC and an S Corporation. |
| Nonprofit Corporation | Provides limited liability. | Articles of Incorporation (nonprofit). | Colorado Revised Nonprofit Corporation Act (C.R.S. Title 7, Art. 121+). | Must adopt bylaws, maintain records, hold meetings. | Generally exempt from federal income tax if 501(c) status obtained. | For charitable, religious, educational, or mutual benefit purposes. |
| Cooperative (Co-op) | Liability protection similar to corps/LLCs. | Articles of Incorporation (cooperative). | Colorado Cooperative Act (C.R.S. Title 7, Art. 56+). | Similar to corps: bylaws, member meetings, records. | Often pass-through to members, depending on structure. | Used for member-owned businesses (agriculture, utilities, etc.). |
