How to Get a Business License in Colorado?

Starting a business or moving a business from one state to another requires entrepreneurs and owners to follow rules, laws, and guidelines and fulfill various requirements of the state in which they plan to operate. One such important requirement is that of a business license. If you form a startup in Colorado then you will need to apply for a Colorado business license, which is basically a document issued by the state or local government bodies and agencies stating that the said business is safe for the public. Business licensing is a complex process. Thus, we have created this guide to provide you with all information related to licenses and permits. You will be better informed after reading this article as it talks about regulatory agencies or licenses, types of licenses or permits required, and how you can obtain Colorado business licenses and permits.

Obtain a business License in Colorado

Registration of a company in Colorado doesn’t necessarily mean that your business has become operational. In order to operate your company and transact in this state, you will need to apply for and obtain a Colorado business license. Some businesses including home-based small startups may not require any formal license like selling T-shirts for a non-profit event. However, if you want to open a food cart or a temporary food establishment, then you have to ensure compliance with the local food-safety codes and apply for relevant licenses and zoning permits. This is because a T-shirt poses less risk for the public as opposed to a food establishment and hence the latter will have to apply for relevant Colorado business licenses and permits.

Who needs a Colorado business license?

Starting a new company and running it efficiently is definitely a daunting task. One of the documents required or which is mandatory to operate your business efficiently is a business license. Now, there are several different types of licenses and permits in the state and choosing the one for your business may be an intricate process. Hence, it is always advisable to conduct a Colorado business license search. A license or permit is basically an approval that is often considered an integral part of the regulatory requirements of the state.

Different states have different licensing laws and regulations, so it is important to check these regulations prior to starting your business. If you conduct business without a license, the state may penalize you. It is not necessary that each and every business requires a license although some businesses may need multiple licenses. The type of license required by you will vary according to the primary business activity. A proper Colorado business license search is needed. Some licenses will be issued to entities with specific activity like selling technology or based on a particular profession like dentists. Whether you start a domestic entity or register a foreign business, you will need to obtain a Colorado business license.

What business license do I need in Colorado?

Some US states have a general license for all businesses but Colorado does not have any statewide general license. Instead, there are certain state regulatory agencies that may issue specific licenses for certain types of businesses or professions. One of the most important Colorado business licenses is the one associated with selling of products or services. So, if your company activity is classified under regulated industries selling a specific product then you may need to apply for regulatory licenses as well as seller’s license.

It is important to conduct a search for licenses and permits based on the industry, business activity, and location. This will help you to identify the permits or licenses specific to your business in this state. There is a thin line of difference between Colorado business licenses and permits. A business license is issued by different state agencies or the state itself for different professions, occupations, or business activities. A permit is normally issued by local municipal agencies or county clerks and is considered to be a type of license, which helps regulate public safety.

Colorado Business Licenses for Specific Occupations and Professions

If you are planning to start a corporation or an LLC in Colorado then you would need to apply for different licenses and permits as without them you will not be able to transact in the state. One of the most important in this state is the Colorado business license for specific occupations and professions. Basically, the type of license required, the fee, and the issuing authority will depend on the profession or your occupation. Let’s look at an example to understand how this works.

Example: You are planning to start a new business in Colorado with the primary activity being accountancy. Your business is a ‘Public Accounting Firm’ and has to be run by Certified Public Accountants (CPA’s). Then proper licenses for an accounting firm will be issued by the National Association of State Boards of Accountancy (NASBA) while information on CPA license will be provided by the Colorado State Board of Accountancy. On the other hand, if you want to start an Architecture Firm then you are not required to obtain a Colorado business license at the state level if they are in compliance with CO Stat. § 12-25-304.

A professional license is a type of permit or registration that can be issued to firms as well as individuals. It is also known to be a non-transferrable authorization, which is mandatory for carrying out specific activities as mentioned by the state. You will need to conduct a Colorado business license search to identify the license required by your business.

Some of the professions or occupations that will require you to apply for and obtain a Colorado business license in the state are:

Accountancy
Acupuncturist
Addiction Counselors
Architects, Engineers and Land Surveyors
Athletic Trainers
Audiology and Hearing Aid Provider
Barber/Cosmetology
Boxing Official, participant, or promoter
Chiropractic
Dental (e.g.,Academic Dentist, Dental Hygienist etc)
Electrical
Funeral Home and Crematory
Marriage and Family Therapists
Massage Therapy
Naturopathic Doctors
Nursing Home Administrators
Occupational Therapy
Passenger Tramway
Pharmacy
Private Investigators
Professional Counselors
Veterinary

Other Colorado Business Licenses

Whether you organize a startup, small business, large enterprise, or even a home-based entity, the licensing requirements in Colorado will vary according to the primary activity as well as the location of your company. Apart from the Colorado business license and permits for professions and occupation, you may still require other types of licenses. These may include sales tax licenses and local or municipal licenses. Let’s look at the other various forms of Colorado business licenses and permits required by any company operating in this state.

Sales Tax License

The most common type of business license required by companies in this state is the sales tax license. Of course, the primary activity of your company should be selling a product or specific tangible personal property. The Colorado sales tax license is also known by other names like a vendor’s license, reseller’s license, or even a resale certificate. It is also important to note that in the state of Colorado, services are not subjected to this sales tax. This type of Colorado business license is applicable only within the state as well as state-collected tax jurisdictions.

If your company is classified as an “in-state business” then there are different types of sales tax license applicable. They are:

Standard Retail License (Sales Tax License) – Your Company may need to obtain a Colorado business license if you are involved in retail sales in the state. If your company is involved in both retail and wholesale sales then this single license will allow you to conduct both activities.
Wholesale License – If your company plans to purchase items for reselling without paying sales tax then you will need to complete the CR 0100 form for obtaining a Colorado sales tax account/license. The CR 0100 is known as the ‘ Colorado Sales Tax and Withholding Account Application’. This will allow you to collect sales tax when you resell various items.
Single Special Event License – This type of Colorado business license and permits is meant for a temporary location, which is different from your regular business location. This license is also valid for only one event.
Multiple Special Event License – If your company plans on attending several special events then this Colorado business license will be applicable. This license is valid for 2 years.
Mobile Vendors – Mobile vendors are those who sell out of a truck or any other vehicle. If you are thinking of becoming a mobile vendor then you need to have a sales tax license for your main office location.

Local Colorado business licensing and permits

Colorado business license search is important because you will get to know about the different licensing requirements in the state as well as local municipal areas also known as city or county licenses. Most cities and counties in the state of Colorado have their local laws pertaining to licensing and permits and the laws as well as requirements which vary from one city or county to another. Let’s look at an example to understand how it works.

Example: If you plan to start a business in the City of Thornton then apart from the Sales and Use Tax Business License (if required), your company may be subjected to additional requirements like certificate of occupancy, initial use tax, and zoning approval depending on the nature of business activity. The city does not have any annual renewal requirement for Colorado business licenses and permits. Similarly, if you start a business in the City of Littleton then you will need to contact the Zoning Division prior to engaging in any business. Certain businesses like sellers of beer or wine will be required to obtain a liquor license from the Office of the City Clerk.

Colorado home-based business license

Colorado is home to a good business climate and availability of workforce and talent makes it attractive for home-based businesses and startups. In fact, the startup growth has been at a rate of 74.1% since 2017 and several of them initially established themselves as home businesses. Women entrepreneurs have also been growing in numbers and leading the way for home-based startups especially in metro areas like Boulder and Denver. The question is would you require a Colorado business license for a home-based small business? And the answer is yes.

If you are planning to sell taxable services or tangible personal property then you will be required to obtain a Colorado business license also known as reseller’s license or Colorado sales tax license. This is irrespective of whether you are selling from your home or from a warehouse.

Apart from this, you will require licenses based on the business activity, the city or county you are operating from, and even the zone in which your home business is located. You will also need to study the zonal laws and regulations related to businesses from home. Let’s look at an example:

Example: You start a home-based business in the City of Colorado Springs. You start a Contract Security Agency in the city. A Colorado business license search will reveal that you will need to obtain a business license issued by the Office of the City Clerk. There is a license fee of $110 and you will need a ‘Lawful Presence Affidavit’ if you are operating as a sole proprietor. Apart from this, you will need to provide the following for obtaining a license pursuant to City Code 2.3.2 for Security Agency License:

Proof of age over 18 (eighteen)

Color image of vehicles and uniforms

Trade Name Certificate

Certificate of Good Standing

Certificate of Commercial General Liability

Alternatively, you can opt for IncParadise “Business License Research Report” service. This is a research report, which contains a list of filing instructions, supporting document requirements, and fees for all Colorado business licenses and permits as applicable.

Need any Assistance in Obtaining Your Colorado Business License?

If you are planning to start a small business from home or a medium enterprise from a commercial space in the state of Colorado then one of the most important compliance is that of a business license. A Colorado business license will ensure your company is able to transact in the state. You will need to apply for state as well as local Colorado business licenses and permits depending on the nature of business activity and location of your company. The license application, fees, and renewal processes will vary according to the type of permit and municipality in which your company is located.

We, at IncParadise can guide you towards obtaining the necessary business licenses and permits in this state. We also provide additional services to new and existing Colorado businesses like EIN Tax ID and Foreign Qualification among others.