Single-Member LLC Operating Agreement — Colorado

Single-Member LLC Operating Agreement (Colorado)

This Single-Member Limited Liability Company Operating Agreement (this "Agreement") is entered into and effective as of [__/__/____] (the "Effective Date") by and between [________________________________] (the "Sole Member") and [________________________________], a Colorado limited liability company (the "Company").

Quick-Reference Summary

Article I — Formation

1.1 Formation. The Company was formed as a Colorado limited liability company on [__/__/____] by the filing of Articles of Organization with the Colorado Secretary of State pursuant to C.R.S. § 7-80-203. The Sole Member adopts and ratifies that filing.

1.2 Name. The name of the Company is "[________________________________]." The Sole Member may change the Company name by filing Articles of Amendment with the Colorado Secretary of State and amending this Agreement accordingly.

1.3 Principal Office. The principal office of the Company is located at [________________________________]. The Sole Member may change the principal office at any time without amending this Agreement.

1.4 Registered Agent and Registered Office. The Company's registered agent in Colorado is [________________________________], whose registered office address is [________________________________]. The Sole Member may change the registered agent or registered office by filing the appropriate statement with the Colorado Secretary of State.

1.5 Term. The Company commenced on the date its Articles of Organization were filed and shall continue perpetually unless dissolved as provided in Article VII or under C.R.S. § 7-80-801.

1.6 Operating Agreement Authority. This Agreement is the operating agreement of the Company within the meaning of C.R.S. § 7-80-102(11) and governs the Company's affairs and the rights and obligations of the Sole Member to the maximum extent permitted by the Colorado Limited Liability Company Act.

Article II — Purpose and Powers

2.1 Purpose. The Company is formed for the following purpose(s): [________________________________]. The Company may also engage in any other lawful business or activity for which a limited liability company may be formed under the laws of the State of Colorado.

2.2 Powers. The Company shall have all powers granted to a limited liability company under C.R.S. § 7-80-104 and any other applicable law, including the power to enter into contracts, acquire and dispose of property, borrow money, and sue and be sued in its own name.

2.3 No Implied Authorization of Unlawful Activity. Nothing in this Agreement authorizes the Company to engage in any business or activity prohibited by Colorado or federal law.

Article III — Member (Sole Member)

3.1 Identity of Sole Member. The Sole Member of the Company is [________________________________], whose address is [________________________________]. The Sole Member owns one hundred percent (100%) of the membership interests in the Company.

3.2 Initial Capital Contribution. The Sole Member has contributed to the Company the following property and/or services, valued at $[____________]:

[________________________________]

3.3 No Additional Contributions Required. The Sole Member is not required to make any additional capital contributions to the Company. The Sole Member may, in the Sole Member's sole discretion, make additional contributions of cash or property, which shall be credited to the Sole Member's capital account.

3.4 Limited Liability. Except as expressly provided by C.R.S. § 7-80-705 or by other applicable Colorado law, the Sole Member is not personally liable for any debt, obligation, or liability of the Company solely by reason of being a member.

3.5 Veil-Piercing Acknowledgment. The Sole Member acknowledges that under C.R.S. § 7-80-107(1), Colorado courts will apply corporate veil-piercing case law to determine when the limited liability shield of an LLC may be set aside. The Sole Member shall observe the formalities set forth in Section 4.6 to preserve the Company's separate existence.

3.6 Admission of Additional Members. No additional member may be admitted without (a) the written consent of the Sole Member, and (b) an amendment to this Agreement converting it into a multi-member operating agreement that complies with the Colorado Limited Liability Company Act.

Article IV — Management

4.1 Management Structure. The Company is (check one):

☐ Member-managed by the Sole Member, in which case the Sole Member has full and exclusive authority to manage and control the business and affairs of the Company.

☐ Manager-managed, in which case the Sole Member designates [________________________________] as the initial Manager. The Manager may be removed and replaced at any time by the Sole Member, with or without cause.

4.2 Authority of the Sole Member. Subject to Section 4.1, the Sole Member (or Manager, if manager-managed) has the authority to take any action on behalf of the Company permitted under the Colorado Limited Liability Company Act, including without limitation the authority to:

(a) execute and deliver contracts, deeds, leases, notes, and other instruments;
(b) open, maintain, and close bank, brokerage, and credit accounts;
(c) hire, supervise, and terminate employees, independent contractors, and agents;
(d) acquire, hold, encumber, and dispose of real and personal property;
(e) borrow money and incur indebtedness on behalf of the Company; and
(f) institute, defend, settle, or compromise legal actions in the name of the Company.

4.3 Officers (Optional). The Sole Member may appoint officers (such as President, Secretary, and Treasurer) to act on behalf of the Company. Officers serve at the pleasure of the Sole Member.

4.4 Compensation. The Sole Member (or Manager) may be compensated for services rendered to the Company in amounts approved by the Sole Member.

4.5 Standard of Conduct. The Sole Member shall discharge the Sole Member's duties to the Company in accordance with C.R.S. § 7-80-404. Because there is only one member, the duties of loyalty and care under that section do not give rise to actionable claims by any other member.

4.6 Separate Existence; Recordkeeping. To preserve the Company's limited liability shield, the Sole Member shall:

(a) maintain the Company's books and records separate from the Sole Member's personal records;
(b) maintain at least one bank account in the Company's name;
(c) avoid commingling Company assets with the Sole Member's personal assets;
(d) sign contracts in the Company's name (e.g., "[Company Name], by [Member Name], its Sole Member");
(e) maintain adequate capitalization for the Company's reasonably foreseeable business needs; and
(f) keep at the principal office the records required by C.R.S. § 7-80-411.

Article V — Capital Accounts and Distributions

5.1 Capital Account. The Company shall maintain a single capital account for the Sole Member in accordance with U.S. Treasury Regulations § 1.704-1(b)(2)(iv) to the extent applicable. The capital account shall be credited with contributions and Company income and debited with distributions and Company losses.

5.2 Distributions. The Sole Member may cause the Company to distribute cash or other property at any time, in any amount, subject to Section 5.3.

5.3 Limitations on Distributions. No distribution shall be made if, after giving effect to the distribution, the Company would be unable to pay its debts as they become due in the ordinary course of business, or the Company's total assets would be less than the sum of its total liabilities, as required by C.R.S. § 7-80-606.

5.4 Federal Tax Classification. The Company is treated for federal income tax purposes as (check one):

☐ A disregarded entity, with all items of Company income, loss, deduction, and credit reported on the Sole Member's individual return (the default under Treas. Reg. § 301.7701-3(b)(1)(ii)).

☐ An association taxable as a corporation, effective [__/__/____], pursuant to IRS Form 8832.

☐ An S corporation, effective [__/__/____], pursuant to IRS Form 2553.

5.5 Tax Distributions (Optional). If the Company is treated as a partnership or pass-through entity, the Sole Member may cause the Company to make tax distributions sufficient to fund the Sole Member's federal and Colorado tax liability attributable to Company income.

Article VI — Transfer of Interest / Charging Order (C.R.S. § 7-80-703)

6.1 Transfer of Membership Interest. The Sole Member may transfer, assign, pledge, or otherwise encumber all or any portion of the Sole Member's membership interest at any time. A transferee acquires only the economic rights of the transferred interest (the right to receive distributions) and does not become a member with management rights unless admitted in writing by the Sole Member prior to such transfer.

6.2 Charging Order Remedy. Under C.R.S. § 7-80-703, a judgment creditor of the Sole Member may apply to a court of competent jurisdiction to charge the Sole Member's membership interest with payment of the unsatisfied judgment. To the extent so charged, the judgment creditor has only the rights of an assignee or transferee of the membership interest (i.e., the right to receive distributions when, as, and if made). The charged interest may be redeemed at any time before foreclosure.

6.3 No Management Rights for Creditor. No charging order, assignment, foreclosure, or other involuntary transfer shall confer upon any creditor or transferee any right to participate in the management of the Company, to inspect Company records (except as required by law), or to compel the Company to make distributions.

6.4 Death or Incapacity of Sole Member. Upon the death or adjudicated incapacity of the Sole Member, the Sole Member's membership interest shall pass by will, intestate succession, or pursuant to the Sole Member's estate plan. To avoid administrative dissolution under C.R.S. § 7-80-801(1)(c), the personal representative, successor trustee, or transferee should promptly admit a successor member or, if appropriate, take action to continue the Company.

Article VII — Dissolution

7.1 Events of Dissolution. The Company shall be dissolved and its affairs wound up upon the first to occur of:

(a) the written decision of the Sole Member to dissolve;
(b) the entry of a decree of judicial dissolution under C.R.S. § 7-80-803; or
(c) any other event causing dissolution under C.R.S. § 7-80-801.

7.2 Winding Up. Upon dissolution, the Sole Member (or a person designated by the Sole Member) shall wind up the Company's affairs in accordance with C.R.S. §§ 7-80-803 to 7-80-807, including by liquidating assets, paying creditors, and distributing the remainder to the Sole Member.

7.3 Articles of Dissolution. Upon completion of winding up, the Sole Member shall cause Articles of Dissolution to be filed with the Colorado Secretary of State pursuant to C.R.S. § 7-90-803.

Article VIII — State-Specific Provisions

8.1 Colorado Limited Liability Company Act Controls. This Agreement is governed by and construed in accordance with the Colorado Limited Liability Company Act, C.R.S. §§ 7-80-101 to 7-80-1101, and other applicable Colorado law. To the extent permitted by C.R.S. § 7-80-108, the provisions of this Agreement control over any inconsistent default rule in the Act.

8.2 Periodic Report. The Company shall file a Periodic Report with the Colorado Secretary of State each year as required by C.R.S. § 7-90-501. The report is due in the two-month period beginning on the first day of the Company's anniversary month. Failure to file may result in the Company being declared delinquent and, ultimately, administratively dissolved.

8.3 No Franchise Tax. Colorado does not impose a separate state franchise tax on limited liability companies. The Company will, however, be subject to Colorado income tax to the extent applicable to its tax classification (or, if disregarded, the Sole Member's individual Colorado income tax).

8.4 No Series LLC. Colorado does not authorize "series" limited liability companies. The Company shall not purport to establish series or protected cells, and no provision of this Agreement shall be construed as creating any such series.

8.5 Sales and Use Tax; Wage Withholding. If the Company sells tangible personal property or services subject to sales tax, or has employees, the Sole Member shall register the Company with the Colorado Department of Revenue and obtain the appropriate tax accounts.

8.6 Veil-Piercing Standard. The Sole Member acknowledges that under C.R.S. § 7-80-107(1) and Colorado case law (including Sheffield Services Co. v. Trowbridge, 211 P.3d 714 (Colo. App. 2009), and Weinstein v. Colborne Foodbotics, LLC, 302 P.3d 263 (Colo. 2013)), Colorado courts may pierce the LLC veil when the entity is operated as an alter ego, is undercapitalized, commingles funds, or is used to perpetrate fraud or injustice.

Article IX — General Provisions

9.1 Amendment. This Agreement may be amended at any time by a writing signed by the Sole Member.

9.2 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions remain in full force and effect.

9.3 Entire Agreement. This Agreement constitutes the entire agreement between the Sole Member and the Company regarding the subject matter hereof and supersedes all prior agreements and understandings.

9.4 Governing Law; Venue. This Agreement is governed by the laws of the State of Colorado without regard to its conflict-of-laws principles. Venue for any dispute shall lie in the state or federal courts located in [____________] County, Colorado.

9.5 Successors and Assigns. This Agreement binds and inures to the benefit of the Sole Member's heirs, personal representatives, successors, and permitted assigns.

9.6 Counterparts and Electronic Signatures. This Agreement may be executed in counterparts and by electronic signature, each of which is deemed an original.

9.7 Effective Date. This Agreement is effective as of the Effective Date set forth in the preamble.

Signature Block

IN WITNESS WHEREOF, the undersigned has executed this Single-Member LLC Operating Agreement as of the Effective Date.

SOLE MEMBER:

Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

COMPANY:

[________________________________], a Colorado limited liability company

By: [________________________________]

Name: [________________________________]

Title: ☐ Sole Member ☐ Manager

Date: [__/__/____]

Pre-Execution Checklist

☐ Articles of Organization have been filed with the Colorado Secretary of State and the Company is in good standing.
☐ The Company has obtained a Federal Employer Identification Number (EIN) from the IRS (Form SS-4) — required even for single-member LLCs that hire employees, file employment or excise tax returns, or elect corporate taxation.
☐ A Colorado registered agent has been appointed and accepted appointment in writing.
☐ A bank account in the Company's name has been opened.
☐ The Sole Member's initial capital contribution has been documented and deposited into the Company account.
☐ The Sole Member has reviewed C.R.S. § 7-80-705 (limitation of liability) and § 7-80-107(1) (veil-piercing).
☐ If electing C-corp or S-corp taxation, Form 8832 and/or Form 2553 has been timely filed with the IRS.
☐ The Sole Member has registered with the Colorado Department of Revenue for any applicable tax accounts (sales/use, withholding, unemployment).
☐ If the Company will conduct business in another state, the Sole Member has researched foreign-qualification requirements there.
☐ The Sole Member has consulted with a Colorado-licensed attorney and a qualified tax professional before signing.
☐ All [PLACEHOLDER] fields have been completed and all check-the-box selections have been made.

Sources and References

• Colorado Limited Liability Company Act, C.R.S. Title 7, Article 80: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-07.pdf
• C.R.S. § 7-80-703 (Rights of creditor against a member): https://codes.findlaw.com/co/title-7-corporations-and-associations/co-rev-st-sect-7-80-703/
• C.R.S. § 7-80-502 (Liability for contributions): https://codes.findlaw.com/co/title-7-corporations-and-associations/co-rev-st-sect-7-80-502/
• Colorado Secretary of State, Business FAQs: https://www.sos.state.co.us/pubs/business/glossary.html
• Colorado Secretary of State, Periodic Reports: https://www.sos.state.co.us/pubs/business/businessFAQs.html
• Sheffield Services Co. v. Trowbridge, 211 P.3d 714 (Colo. App. 2009)
• Weinstein v. Colborne Foodbotics, LLC, 302 P.3d 263 (Colo. 2013)
• IRS Form 8832 (Entity Classification Election): https://www.irs.gov/forms-pubs/about-form-8832
• IRS Form 2553 (Election by a Small Business Corporation): https://www.irs.gov/forms-pubs/about-form-2553