We demonstrate that suspended spherical colloidal particles can be effectively modeled as single dissipative particle dynamics (DPD) particles provided that the conservative repulsive force is appropriately chosen. The suspension model is further improved with a new formulation, which augments standard DPD with noncentral dissipative shear forces between particles while preserving angular momentum. Using the new DPD formulation we investigate the rheology, microstructure and shear-induced migration of a monodisperse suspension of colloidal particles in plane shear flows (Couette and Poiseuille). Specifically, to achieve a well-dispersed suspension we employ exponential conservative forces for the colloid-colloid and colloid-solvent interactions but keep the conventional linear force for the solvent-solvent interactions. Our Simulations yield relative Viscosity Versus volume fraction predictions ill good agreement with both experimental data and empirical correlations. We also Compute the shear-dependent viscosity and the first and second normal-stress differences and coefficients in both Couette and Poiseuille flow. Simulations near the close packing volume-fraction (64%) at low shear rates demonstrate a transition to flow-induced string-like structures of colloidal particles simultaneously with a transition to a nonlinear Couette velocity profile in agreement with experimental observations. After a sufficient increase of the shear rate the ordered structure melts into disorder with restoration of the linear velocity profile. Migration effects simulated in Poiseuille now compare well with experiments and model predictions. The important role of angular momentum and torque in nondilute suspensions is also demonstrated when compared with simulations by the standard DPD, which omits the angular degrees of freedom. Overall, the new method agrees very well with the Stokesian Dynamics method but it seems to have lower computational complexity and is applicable to general complex fluids systems.