How To Start & Grow Your Business

State Home Colorado

How to Start a Business in Colorado

Are you planning on starting a new business in the state of Colorado, but having some trouble getting started? Are the endless websites and paperwork trails making you feel overwhelmed? Look no further.

At , we have simplified the process of starting your business into simple steps, free software, and how-to content.

Sign up for free HERE

Let's Get Going

Frequently showing up on reputable “top 10” lists as one of the best states to start a business in, Colorado attracts more than the outdoor enthusiast. Outdoor sports and activities like skiing, hiking, rafting, and fishing draw millions of tourists to Colorado each year, and businesses thrive on it. Colorado adults have the second highest level of college attainment, and Colorado ranks fourth in the country for the number of new businesses born. The Rocky Mountain state is not only a naturally beautiful state to live in with a high quality of life, but a hotbed for new businesses, particularly high-tech ones.

Bonus

Discover bizHUMM's popular ebook

How to Start a Business

Starting a business can be both exhilarating and challenging. It requires your full attention and energy. It all begins with an idea, an observation that there is a problem and the belief that you have a new solution – or a better one. Allow us to walk you through the steps in this free guide: How to Start A Business.

General resources for starting a business in Colorado

up

Fun facts about starting a business in Colorado

Famous business founded in Colorado: Chipotle

Founded in Denver, Colorado, Chipotle is a chain of fast food restaurants in the United States, United Kingdom, Canada, France, and Germany, specializing in Mission burritos and tacos. Its name derives from chipotle, the Nahuatl name for a smoked and dried jalapeño chili pepper.

Famous entrepreneur born in Colorado: Ruth Handler, president of Mattel, Inc. and inventor of the Barbie doll.

Born in Denver, Colorado, Ruth Handler was the president of the toy manufacturer Mattel Inc., and is best remembered for inventing the Barbie doll.

[On the Barbie Doll she created]

“She became not just a doll. She became part of that child through those growing up years. Many of those children set their life’s dreams, their goals, through Barbie. Many of them said Barbie helped them achieve those dreams. That’s a pretty heavy thing, but it’s true.” — Ruth Handler

up

Which type of legal structure is best for my business in Colorado?

We strongly recommend you incorporate, but you must consider the tax, legal, and liability implications carefully before deciding on the best legal structure for your business.

Here are five steps to help you determine the best legal structure:

Click one of the buttons below to learn more about the different types of business legal structures and how to start them in the state of Colorado.
LLC (Limited Liability Company)
A limited liability company (LLC) is a unique business entity that combines the taxation benefits of a partnership or sole proprietorship with the limited liability status of corporations. The owners of an LLC are referred to as “members,” and can range from one to several.

Steps to starting an LLC in Colorado:

  • Step 1 — Choose a name for your LLC.
  • Step 2 — File an Articles of Organization with the Secretary of State.
  • Step 3 — Appoint a registered agent.
  • Step 4 — Prepare and sign an Operating Agreement.
  • Step 5 — Comply with necessary publication requirements.
  • Step 6 — Comply with other tax and regulatory requirements.
  • Step 7 — File Periodic Reports annually.
  • Step 8 — Register foreign LLCs doing business in Colorado.

For help forming your LLC in Colorado we recommend CorpNet (they have fees for their service). Alternatively, visit the Colorado Secretary of State website.

Other Colorado resources for LLCs:

Secretary of State Business Name Database: Search for your LLC name here.
Reserve your LLC name here.

Secretary of State Forms: File your Articles of Organization, and Periodic Report (which must be filed each year), here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) for your LLC. If your LLC has more than one member, even if it has no employees, you will need an EIN.

Colorado Department of Revenue: Register with this site if you will be selling goods or collecting sales tax, or if you have employees.

Sole Proprietorship
Popular among individual self contractors or business owners, a sole proprietorship is a business entity that is owned and run by one person, and in which there is no legal distinction between the owner and the business. The owner is in direct control of all elements and is legally accountable for all profits, debts, losses, and liabilities.

Steps to starting Sole Proprietorship in Colorado:

  • Step 1 — Name your sole proprietorship.
  • Step 2 — File a Statement of Trade Name of an Individual.
  • Step 3 — Obtain licenses, permits, and zoning clearance.
  • Step 4 — Get an Employer Identification Number (EIN).

For help forming your sole proprietorship in Colorado we recommend CorpNet (there are fees for their service). Alternatively, visit the Colorado Secretary of State website.

Other Colorado resources for Sole Proprietorship:

Secretary of State Business Name Database: Search for your business name here. It is a good idea to use a name that isn’t too similar to another registered business, because of federal law trademark protections.

U.S. Patent & Trademark Office: Federal site for your business name search. Click on the “TESS” link.

Statement of Trade Name of an Individual: File this form here, if your business name is different from your legal name. You must file this statement prior to your business start date!

Occupational License Database: A comprehensive list of every license and permit that might be required by your sole proprietorship.

IRS EIN Online: Apply for an Employer Identification Number (EIN) here. You will need this if you have employees.

Colorado Business Express: Register here if you have employees – you will be required to file a wage tax report with the Colorado Department of Revenue.

Partnership
In a partnership, two or more people share ownership. Each partner contributes to all aspects of the business, including money, property, labor, or skill. In return, each partner shares in the profits and losses of the business. There doesn’t have to be a written agreement to form the partnership.

Steps to starting Partnership in Colorado:

  • Step 1 — Choose a partnership name.
  • Step 2 — File a Statement of Trade Name.
  • Step 3 — Create a partnership agreement.
  • Step 4 — Obtain licenses, permits, and zoning clearance.
  • Step 5 — Obtain an Employer Identification Number (EIN).

For help forming your partnership in Colorado we recommend CorpNet (they have fees for their service). Or, visit the Colorado Secretary of State website.

Other Colorado resources for Partnership:

Secretary of State Business Name Database: Search for your business name here. A partnership can use the surnames of the individual partners, or a fictitious business name.

U.S. Patent & Trademark Office: Federal site for your business name search. Click on the “TESS” link.

Statement of Trade Name of an Individual: File this form here, if your business name is different from your legal name. You must file this statement prior to your business start date!

Occupational License Database: A comprehensive list of every license and permit that might be required by your partnership.

IRS EIN Online: Apply for an Employer Identification Number (EIN). You will need this if you will hire employees.

Colorado Business Express: Register here if you have employees – you will be required to file a wage tax report with the Colorado Department of Revenue.

S Corporation
An S corporation (sometimes referred to as an S Corp), is a special type of corporation created through an IRS tax election. A business electing to incorporate with S corporation status has its business income taxed only once, similar to how sole proprietorships and partnerships are taxed. By electing to become an S corporation, a small business can gain the legal advantages available to businesses with a corporate structure, as well as the tax advantages available to partnership firms.

Steps to starting S Corporation in Colorado:

  • Step 1 — Choose a corporate name.
  • Step 2 — Prepare and file Articles of Incorporation.
  • Step 3 — Find a registered agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — File Periodic Reports.
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Colorado.

For help forming your S corporation in Colorado we recommend CorpNet (they have fees for their service). Alternatively, you can visit the Colorado Secretary of State website.

Other Colorado resources for S Corporation:

Secretary of State Business Name Database: Search for the availability of your business at this site.
File a Statement of Reservation of name here.

U.S. Patent & Trademark Office: Federal site for your business name search. Click on the “TESS” link.

Colorado Secretary of State: File your Articles of Incorporation form here.
File your Periodic Report here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) here. You will need this if you have employees.

IRS S corporations: Specific instructions for your tax requirements as an S corp.

Colorado Business Express: Register here – you will be required to file a wage tax report with the Colorado Department of Revenue.

Occupational License Database: A comprehensive list of every license and permit that might be required by your corporation.

C Corporation
A C corporation (or C corp for short), under United States federal income tax law, refers to any corporation that is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. However, C corporations have greater tax planning flexibility and can shield shareholders from direct tax liability.

Steps to starting C Corporation in Colorado:

  • Step 1 — Name your corporation.
  • Step 2 — Prepare and file Articles of Incorporation.
  • Step 3 — Appoint a Registered Agent.
  • Step 4 — Set up a corporate records book.
  • Step 5 — Prepare corporate bylaws.
  • Step 6 — Appoint initial corporate directors.
  • Step 7 — Hold your first Board of Directors meeting.
  • Step 8 — Issue stock.
  • Step 9 — File Periodic Reports.
  • Step 10 — Comply with other tax and regulatory requirements.
  • Step 11 — Register foreign corporations doing business in Colorado.

For help forming your C corporation in Colorado we recommend CorpNet (there are fees for their service). Alternatively, you can visit the Colorado Secretary of State website.

Other Colorado resources for C Corporation:

Secretary of State Business Name Database: Search for the availability of your business at this site.
File a “Statement of Reservation of Name” here.

U.S. Patent & Trademark Office: Federal site for your business name search. Click on the “TESS” link.

Colorado Secretary of State: File your Articles of Incorporation form here.
File your Periodic Report here.

IRS EIN Online: Apply for an Employer Identification Number (EIN) here. You will need this if you have employees.

Colorado Business Express: Register here – you will be required to file a wage tax report with the Colorado Department of Revenue.

Occupational License Database: A comprehensive list of every license and permit that might be required by your corporation.

up

Why choose Colorado for my business?

  • 1

    Entrepreneur.com “The 10 Best States to Start a Small Business” (2015)
    Colorado ranks #5.

  • 2

    CNBC America’s Top States for Business (2015)
    Colorado ranks #4.

  • 3

    CBS Money Watch: “The 10 Best States for Entrepreneurs” (2015)
    Colorado ranks #4.
    “Having the highest rate of small business loans helped land Colorado the No. 4 spot on this list, with 98.3 loans per 1,000 small business employees. Besides accessible lending, Colorado has high numbers of established small businesses and people employed by small businesses. Colorado also boasts an above-average rate of business survival and lower business taxes.”

  • 4

    Colorado Business Incentives
    Tax credits and grants for new businesses.

  • 5

    Colorado Enterprise Fund
    “...Colorado's award-winning nonprofit lender with small business loans up to $500K for existing businesses and start-ups. We’ve loaned over $49 million since 1976 to over 1800 businesses to help create and retain more than 14,000 Colorado jobs.”

  • 6

    Startup Colorado Community Fund
    “The fund provides capital to community focused entrepreneurial organizations in Colorado to assist in amplifying the dialogue around entrepreneurship, innovation and high growth enterprises and enhance the development of startup communities in the State.”

  • 7

    Colorado SBDC
    “The Colorado Small Business Development Center network is dedicated to helping existing and new businessness grow and prosper through free, one-on-one consulting and no-or-low-cost business training programs.”

  • 8

    Colorado SBDC - Veterans Program
    “Since 2010, the Colorado SBDC Network has been awarded a Veteran's Grant from the U.S. Small Business Administration to provide one-on-one business consulting and specialized training and programs for Colorado veterans and their families. We are dedicated to helping veterans become successful.”

up