Colo. Rev. Stat. » Title 7

Colo. Rev. Stat. § 7-80-107

Application of corporation case law to set aside limited liability

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(1) In any case in which a party seeks to hold the members of a limited liability company personally responsible for the alleged improper actions of the limited liability company, the court shall apply the case law which interprets the conditions and circumstances under which the corporate veil of a corporation may be pierced under Colorado law. (2) For purposes of this section, the failure of a limited liability company to observe the formalities or requirements relating to the management of its business and affairs is not in itself a ground for imposing personal liability on the members for liabilities of the limited liability company. (3) A limited liability company's status for federal tax purposes does not affect its status as a distinct entity organized and existing under this article.

Source: L. 90: Entire article added, p. 416, § 1, effective April 18. L. 94: Entire section amended, p. 710, § 4, effective July 1. L. 2016: (3) added, (HB 16-1329), ch. 242, p. 988, § 2, effective August 10.

7-80-108. Effect of operating agreement - nonwaivable provisions - statute of frauds. (1) (a) The operating agreement may contain any provisions for the affairs of the limited liability company and the conduct of its business to the extent such provisions are consistent with law. Except as otherwise provided in subsection (1.5), (2), or (3) of this section, an operating agreement governs the rights, duties, limitations, qualifications, and relations among the managers, the members, the members' assignees and transferees, and the limited liability company. Such provisions shall control over any provision of this article to the contrary except as set forth in subsection (1.5), (2), or (3) of this section. To the extent the operating agreement does not otherwise provide, this article shall control. (b) A limited liability company is bound by any operating agreement of its members. (c) An operating agreement may be entered into before, after, or at the time of filing of articles of organization and, whether entered into before, after, or at the time of such filing, may be made effective as of the formation of the limited liability company or as of the time or date provided in the operating agreement. (1.5) To the extent that a member or manager or other person that is a party to, or is otherwise bound by, the operating agreement has duties, including, but not limited to, fiduciary duties, to a limited liability company or to another member, manager, or other person that is a party to or is otherwise bound by an operating agreement, the duties of such member, manager, or other person may be restricted or eliminated by provisions in the operating agreement, as long as any such provision is not manifestly unreasonable. (2) An operating agreement may not: (a) (Deleted by amendment, L. 2006, p. 855, § 20, effective July 1, 2006.) (b) Unreasonably restrict the rights of members and managers under section 7-80-408; (c) (Deleted by amendment, L. 2006, p. 855, § 20, effective July 1, 2006.) (d) Eliminate the obligation of good faith and fair dealing under section 7-80-404 (3); except that the operating agreement may prescribe the standards by which the performance of the obligation is to be measured, if such standards are not unreasonable; (d.5) Eliminate or modify the provisions of section 7-80-801 (1)(c)(I), except to extend the time set forth therein to a time not later than the first anniversary of the date of the termination of the membership of the last remaining member; or (e) Restrict rights of, or impose duties on, persons other than the members, their assignees and transferees, and the limited liability company without the consent of such persons. (2.5) (a) An operating agreement may contain one or more provisions concerning the enforcement, interpretation, construction, application, severability of provisions, integration, effect of parole evidence, and other matters with respect to the operating agreement or any of its provisions. (b) Unless otherwise provided in the operating agreement, if any provision of an operating agreement or application thereof to any person or circumstance is unenforceable or otherwise invalid under subsection (1.5) or (2) of this section or otherwise, the provision shall be limited, construed, and applied in a manner that is valid and enforceable, and, in any event, the remaining provisions of the operating agreement shall be given effect without the invalid provision or application. (c) Unless otherwise provided in the operating agreement with respect to the unenforceability, invalidity, or application of any provision of the operating agreement under subsection (1.5) or (2) of this section, when it is claimed or appears to the court that any provision of the operating agreement may violate subsection (1.5) or (2) of this section, the parties shall be afforded a reasonable opportunity to present evidence as to its commercial setting, purpose, and effect, to aid the court in making the determination. (3) Unless contained in a written operating agreement or other writing approved in accordance with a written operating agreement, no operating agreement may: (a) (Deleted by amendment, L. 2004, p. 936, § 3, effective July 1, 2004.) (b) (Deleted by amendment, L. 97, p. 1503, § 12, effective June 3, 1997.) (c) (Deleted by amendment, L. 2004, p. 936, § 3, effective July 1, 2004.) (d) Vary any requirement under this article that a particular action or provision be reflected in a writing. (4) It is the intent of this article to give the maximum effect to the principle of freedom of contract and to the enforceability of operating agreements. (5) An operating agreement is not subject to any statute of frauds, including section 38- 10-112, C.R.S., regarding void agreements, but not including any requirement under this article that a particular action or provision be reflected in a writing.

Source: L. 94: Entire section added, p. 711, § 5, effective July 1. L. 97: IP(3) and (3)(b) amended, p. 1503, § 12, effective June 3. L. 2003: (2)(d) amended, p. 2265, § 177, effective July 1, 2004. L. 2004: (2) and (3) amended and (4) added, p. 936, § 3, effective July 1. L. 2005: (2)(d) amended, p. 1203, § 2, effective October 1. L. 2006: (1) and (2) amended and (1.5) and (2.5) added, p. 855, § 20, effective July 1. L. 2016: (5) added, (HB 16-1329), ch. 242, p. 988, § 3, effective August 10.

Notes of Decisions
Cited in 15 cases (2 in the last 5 years), 1998–2025 · leading case: Sheffield Services Co. v. Trowbridge
Sort: Relevance Newest Treatment
Sheffield Services Co. v. Trowbridge (2009) coloctapp · cites it 25× “) Section 7-80-107 is the only section of the Act that addresses applying the common law principle of piercing the corporate veil in the LLC context.”
Stockdale v. Ellsworth (2017) colo · cites it 2× “” (quoting § 7-80-107, C.R.S. (2017)). Ellsworth went on to address the “[c]ommon.”
Weinstein v. Colborne Foodbotics, LLC (2013) colo · cites it 9× “" 8 § 7-80-107(1). {12 With this background in mind, we turn to the plaintiff's unlawful distribution and fiduciary duty elaims.”
Griffith v. SSC Pueblo Belmont Operating Co. (2016) colo · cites it 4× “; § 7-80-107, C.R.S. (2016). 2 This is “an extraordinary remedy” and only limited circumstances justify disregarding the entity’s form to impose liability,on LLC members.”
Props. Dev. Corp. v. Hinds (2019) coloctapp · cites it 5× “§ 7-80-107(1), C.R.S. 2018 (providing that members of LLCs can be held liable based on piercing the corporate veil jurisprudence, but not addressing managers); § 7-80-705, C.”
Dill v. Rembrandt Group, Inc (2020) coloctapp · cites it 3× “Remaining Contentions ¶ 59 Because we reverse the court’s alter ego and rightful claim findings, we need not address RGI’s or PPA’s remaining contentions about the admissibility of the Dill notes or about the scope and application of section 7-80-107(1), C.R.S. 2019. We also…”
Mantle v. N. Star Energy & Constr. LLC (2019) wyo “%20%C2%A7%207-80-107"> Colo. Rev. Stat. § 7-80-107 (1) ).”
Water, Waste & Land, Inc. v. Lanham (1998) colo · cites it 4× “By way of further support for our conclusion, section 7-80-107, 2 C.R.S. (1997), provides two bases of individual liability for members: (1) for “alleged improper actions,” and (2) “the failure of a limited liability company to observe the formalities or requirements relating to…”
National Farmers Union Property & Casualty Co. v. Garfinkel (2012) coloctapp · cites it 2× “Although Colorado law recognizes situations in which the corporate veil may be pierced and applies that concept to LLCs, see § 7-80-107(1), C.R.S.2011; Sheffield Services Co.”
NAT. FARMERS UNION PROPERTY v. Garfinkel (2012) coloctapp · cites it 2× “[3] Although Colorado law recognizes situations in which the corporate veil may be pierced and applies that concept to LLCs, see § 7-80-107(1), C.R.S.2011; Sheffield Services Co.”
Young v. Bush (2012) coloctapp · cites it 4× “See § 7-80-107(1), C.R.S.2011 (directing courts to apply case law on piercing corporate veil to cases where party seeks to hold LLC member personally responsible for LLC's improper actions); Sheffield, <a href="/opinion/2562980/sheffield-services-co-v-trowbridge/#720"…”
GARDNER VS. DIST. CT. (HENDERSON WATER PARK, LLC) (2017) nev · cites it 2× “"); Colo. Rev. Stat. § 7-80-107 (1) (2017) (applying caselaw that interprets the conditions and circumstances under which the corporate veil of a corporation may be pierced under Colorado law to LLCs).”
Show all 15 citing cases →
— Colo. Rev. Stat. § 7-80-107(1) — 8 cases
Sheffield Services Co. v. Trowbridge (2009) coloctapp “) Section 7-80-107 is the only section of the Act that addresses applying the common law principle of piercing the corporate veil in the LLC context.”
Weinstein v. Colborne Foodbotics, LLC (2013) colo “" 8 § 7-80-107(1). {12 With this background in mind, we turn to the plaintiff's unlawful distribution and fiduciary duty elaims.”
Dill v. Rembrandt Group, Inc (2020) coloctapp “Remaining Contentions ¶ 59 Because we reverse the court’s alter ego and rightful claim findings, we need not address RGI’s or PPA’s remaining contentions about the admissibility of the Dill notes or about the scope and application of section 7-80-107(1), C.R.S. 2019. We also…”
Props. Dev. Corp. v. Hinds (2019) coloctapp “§ 7-80-107(1), C.R.S. 2018 (providing that members of LLCs can be held liable based on piercing the corporate veil jurisprudence, but not addressing managers); § 7-80-705, C.”
National Farmers Union Property & Casualty Co. v. Garfinkel (2012) coloctapp “Although Colorado law recognizes situations in which the corporate veil may be pierced and applies that concept to LLCs, see § 7-80-107(1), C.R.S.2011; Sheffield Services Co.”
— Colo. Rev. Stat. § 7-80-107(2) — 2 cases
Props. Dev. Corp. v. Hinds (2019) coloctapp “§ 7-80-107(1), C.R.S. 2018 (providing that members of LLCs can be held liable based on piercing the corporate veil jurisprudence, but not addressing managers); § 7-80-705, C.”
Love's Oven v. Walters (2025) coloctapp
— Colo. Rev. Stat. § 7-80-107(3) — 1 case
Props. Dev. Corp. v. Hinds (2019) coloctapp “§ 7-80-107(1), C.R.S. 2018 (providing that members of LLCs can be held liable based on piercing the corporate veil jurisprudence, but not addressing managers); § 7-80-705, C.”
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