Set up your business
Step 2: Set up your business
Most Colorado breweries companies will organize as either an LLC or a corporation. We typically do not recommend that companies start a business as a sole proprietorship or general partnership, as these types of entities vest personal liability for the company’s debts and obligations in the name of the owners. LLCs and corporations, on the other hand, often help the owners avoid personal liability.
Whether your business forms as a corporation or an LLC is likely decided by the fundraising decisions that are made in step 1 above. For instance, if a founder or investor wishes to invest 401k funds into the business, it may be advisable to be structured as a C-Corporation. Also, corporations tend to require less disclosure to the Tax and Trade Bureau (TTB) down the road. LLC’s on the other hand, tend to be less structured than corporations and may be an effective way lessen the overall tax burden of the company and/or its owners. It may be helpful to consult with an attorney and/or tax professional about which type of business structure will fit your needs.
Starting a Colorado brewery involves filing documents with the Secretary of State. Colorado has developed a fairly sophisticated system for filing such documents online.
It is often advisable or even required that a company write up a comprehensive document that outlines the rights and responsibilities of the members and appoints the initial officers and/or managers of the company. For an LLC, this document is called the “Operating Agreement.” For a corporation, this document is called the “Bylaws.”
You will need to provide your company’s organizational documents (articles and operating agreement/bylaws) to both the TTB and Colorado in order to apply for your brewer’s notice and manufacturer’s license, so keep them handy.