Chapter 14 - § 14.1 • INTRODUCTION

• Jurisdiction: Colorado

§ 14.1 • INTRODUCTION

Since the Internal Revenue Service adopted the "check-the-box" regulations in December 1996,¹ the limited liability company (LLC) has been a very popular choice of entity for many types of business. Because of the combination of limited liability for all owners of the LLC, pass-through tax treatment, and ease and flexibility in customizing the relationships between the owners, the LLC is seen by many as providing the best of all worlds. Of course, there are specific disadvantages to using an LLC, and the specific facts of each matter must be analyzed before making a decision to move forward with organizing an LLC.

Continuing Legal Education in Colorado, Inc. has published a treatise on limited liability companies written by Herrick K. Lidstone, Jr. and Allen Sparkman entitled Limited Liability Companies and Partnerships in Colorado (Second Ed. 2017). This chapter is much abbreviated from that discussion.

One thing that must be appreciated, however, is that it is without question that LLCs are, in Colorado and elsewhere, the entity du jour. In Colorado, more LLCs are formed each year than any other entity, by a factor of almost 8:1 over corporations. In 2014 through 2017, according to the records of the Colorado Secretary of State:

• LLCs organized:

◦ 75,317 in 2014;
◦ 73,322 in 2015;
◦ 82,084 in

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