Doing Business in Colorado

When you have put a plan in place to launch your idea, product, or service, there are several aspects to consider that can be related to business formation and operations. Doing business in Colorado according to state laws and within your desired budget can be quite a tough proposition. This is where Colorado small business incentives can provide the necessary cushion. These incentive plans or programs administered by different government bodies, are targeted mostly at small businesses. Some of the other factors to consider when conducting business in the state include choosing a desirable location e.g., Denver and Fort Collins have been described by Forbes as the most conducive locations for small businesses in the state. Apart from this, you also need to check the various options for funding or financing available in the state like loans, grants, and private investors.

Why do businesses prefer doing business in Colorado?

If you plan on doing business in Colorado then you will be happy to know that the state provides strong infrastructural support for small business and large enterprises. If you are forming a startup in this state then you can take advantage of the various Colorado small business grants that strengthen the initial financial requirements of starting and operating your business. Let us take a look at some of the advantages of conducting business in this state.

• Strong and Committed workforce – The state of Colorado has one of the best workforces in the country. The current talent pool has just the right motivation, skills, and knowledge that gears them to provide solutions to intricate problems and complex issues in various aspects of the different industries and sectors. According to various reports by US News & World, CNBC, and Forbes, the state leads in terms of STEM (science, technology, engineering and mathematics) growth and orientation. This goes a long way in ensuring that companies in the state enjoy an uninterrupted supply of talent and as a result, doing business in Colorado is easier.
• Advanced and diverse industries – The economy of the state of Colorado is highly growth oriented and this is driven by the diverse and dynamic portfolio of industries. There are the traditional sectors as well as the more advanced technology driven sectors. You can form a business in any of these sectors and also apply for Colorado small business incentives even in the evolving and dense cluster of high-tech sectors. Some of the top industries include aerospace, advanced manufacturing, electronics, bioscience, infrastructure engineering, energy, and information technology.
• Access to National and Global market – The state of Colorado enjoys a central location and one of the three states in the USA with straight lines of latitude and longitude. The state shares its borders with Wyoming, Nebraska, Kansas, New Mexico, and Oklahoma. Colorado is currently ranked 32 out of 50 states in terms of exports and has Foreign Trade Zone (FTZ) and FTZ’s offer several benefits for small businesses. Since Colorado follows the Mountain Time Zone, this enables same-day communication with both East Asia and Western Europe during the normal work hours. It is also home to the Denver International Airport (DIA) that is counted amongst the top five U.S. airports and makes doing business in Colorado effortless especially for export and import.

Enjoy Colorado state benefits by registering your company today!

Small Business Incentive Programs and Grants in Colorado

When you form a new LLC or a corporation in Colorado, there are multiple benefits that you can leverage right from Colorado small business grants to tax credits and incentive programs. These programs have been created specifically for helping small businesses and medium enterprises so that they can spend more time focusing on business operations. Here is a list of some of the most popular Colorado small business funding and incentive programs in the state.

Small Business Grants in Colorado

A small-business grant can be termed as a financial award that is provided by state governments, foundations, and other private entities to a small business or startup. The primary objective of these Colorado small business grants is to incentivize performance or facilitate achievement of business goals. Normally, a Colorado grant is considered a gift and hence doesn’t require companies to pay back. Let’s look at some of the most popular grant programs that can provide you with the necessary Colorado small business funding.

Advanced Industries Collaborative Infrastructure Grant

The Advanced Industries Collaborative Infrastructure Grant funds are one of the top Colorado small business grants that focuses on the advanced industries in the state. This grant program is considered to be an integral part of the Advanced Industries Accelerator (AIA) Program and is governed and administered by the Office of Economic Development and International Trade (OEDIT). The amount of Colorado small business funding that you can receive through this grant varies from $50,000 to $500,000 per project. The application period for this grant is between February and April each year.

Business Foundations Technical Assistance Program

The Business Foundations Technical Assistance Program has been created primarily to provide technical assistance as well as small grants to companies doing business in Colorado. This program is a little different from any other grant program as it includes 3 types of training paths that businesses are required to complete followed by a certification. Once this training is completed, businesses will be eligible to apply for grants of up to $1,200.

Employee Ownership Grant

This is one of the newest Colorado small business grants programs that has been launched by the Colorado Employee Ownership Office (EOO). This grant will be available to all small businesses headquartered in Colorado. Its primary objective is to reimburse professional technical services that are often required for the employee-ownership transition. The eligible professional services include legal services, accounting services, and business valuation services. This Colorado grant can also be used by companies for repayment of their Colorado Employee Ownership Loan.

Small Business Accelerated Growth

The small business accelerated growth program is being administered by the Colorado office of economic development (OED). The program entails the awarding of 326 grants distributing an amount of $1,785,000 in Colorado small business funding to companies across the state. The objective of this program is to provide business development support to those companies that have 19 or fewer employees.

State Trade Expansion Program Grant

The State Trade Expansion Program (STEP) Grant has been created specifically to help startups and small businesses in expanding internationally. This Colorado small business grants program provides funding necessary for activities related to international business development. The main purpose of this Colorado grant is to offset the cost of international expansion. The maximum amount of Colorado small business funding that a company can receive is $10,000 in a year. Some of the activities that can be funded through this program include:

• Holding business meetings internationally
• Compliance testing
• Attending international trade shows
• Researching of new markets globally
• Updating marketing materials for newer markets

Other Small Business Incentives and Programs in Colorado

Apart from grant programs, companies in the state can also apply for the wide variety of Colorado small business incentives offered by government bodies and private institutions. These programs can play a key role in helping you minimize the initial cost of doing business in Colorado. Let’s look at some of the popular programs.

Advanced Industry Investment Tax Credit

The top Colorado small business incentives program is the Colorado Advanced Industry Investment Tax Credit (AITC) program. The primary purpose of this program is to help those companies that are operating within the Colorado advanced industry sector. This program enables such companies to receive capital from diverse investors in the state. The legislation responsible for the creation of this program is House Bill 14-1012 and the qualifying industry sectors include Advanced Manufacturing, Infrastructure Engineering, Bioscience, Information Tech, Energy/Natural Resources/Cleantech, Electronics, and Aerospace. Investors and advanced industry businesses can benefit from a tax credit of 25 to 35 percent for every investment of $100,000.

Enterprise Zone Program

Enterprise zones (EZs) are geographically marked areas in each state including Colorado. If a company is located within such a zone then they can qualify for different types of subsidies and Colorado small business incentives. The purpose of the Colorado Enterprise Zone (EZ) program is to encourage small businesses to stay, locate, or expand in such zones to revitalize local communities. Companies can benefit from income tax credits, property tax abatements, as well as other tax incentives for locating in this zone. There are 16 designated enterprise zones in the state and if you locate in any of the designated zones then you can be eligible for sales and use tax exemptions as well as state income tax credits for specific investments.

Rural Jump-Start Program

There are different types of incentive programs available for doing business in Colorado and one such program is the Rural Jump-Start Program. This program is a collaborative effort between the local and state governments, economic development organizations (EDO), and Institutes of Higher Education (IHE). The purpose is to incentivize new businesses for starting a business in or moving their company to rural and economically distressed counties within Colorado. This is a tax credit and grant program under which companies can derive relief from:

• State income taxes for new businesses
• County personal property tax
• State sales and use tax
• State income tax for qualified new hires
• Municipal personal property tax

Colorado Opportunity Zone Program

Opportunity Zones have been created under the Tax Cuts and Jobs Act of 2017. They have been created on the lines of promoting economic development through investment by businesses in distressed areas of the state. This will not only spur economic growth but also lead to job creation in Colorado low-income communities while ensuring investors or companies enjoy Colorado small business incentives and other tax benefits. Colorado is home to 126 designated Opportunity Zones and if you operate your business in such a zone then you will benefit from elimination and deferral of federal and state capital gains taxes.

Venture Capital Authority

The Venture Capital Authority (VCA) has been created to provide the much needed access to venture capital for startups and entrepreneurs in the state. The VCA program is a Colorado small business funding program that specializes in providing funding for early-stage or seed startups. The funding distribution available is 50 percent for statewide businesses; 25 percent for rural businesses and 25 percent to startups situated in distressed urban communities. The maximum amount of investment available can vary from $50,000 to $3.25 million.

Ready to Start a Business in Colorado?

Whether you are a small business or a startup planning to locate within a distressed zone in Colorado, the state offers several types of financial assistance. You can choose from Colorado small business incentives to applying for grants and other forms of funding. Some areas like opportunity zones also offer tax credit programs. If you are thinking of starting a new business and post registration or incorporation in this state, you will be able to take advantage of these Colorado small business funding opportunities and programs.

Colorado Business Tax

Individuals in Colorado or any other state may be required to file federal as well as state income taxes but it is not the same case with business owners. If you form an entity in Colorado then you may have to file different forms of taxes depending on the entity structure and the state of formation. These may include income taxes, corporate taxes, franchise taxes, self-employment taxes, sales taxes and even local city or county taxes. It is important to understand that just like in any other state, state taxes like Colorado business tax is an integral part of the annual maintenance requirements. Hence all entity structures whether domestic or foreign will be required to file business taxes as applicable using a Colorado business tax Calculator and according to the tax rate in this state.

What taxes do businesses pay in Colorado?

As an entrepreneur, you will be required to take several decisions when starting a new business including identifying the tax structure and choosing a state that has a conducive tax environment. It is important to derive a clear understanding of the Colorado business tax landscape as this will impact your overall cash flow, profitability, and competitiveness in the said market. The 2024 State Business Tax Climate Index Report states that Colorado has a better tax climate as compared to several other states like New Jersey (11.5 percent), Illinois (9.50 percent), and Pennsylvania (8.99 percent). Whether you form a limited-liability company, C Corporation, a sole proprietorship, or a general partnership, the overall tax burden will be certainly lower due to the various tax credit programs offered by the state. Let’s try to understand the different types of Colorado LLC taxes or corporate taxes applicable to new and existing businesses in this state.

Colorado income tax

If you have decided to start your company in the state of Colorado then you will be pleased to know that this type of Colorado business tax is lower as compared to several other states and the state also has several tax credit programs to support small companies and large enterprises. There are two types of state income taxes, so let’s take a look at them.

• Individual Income Tax – The individual income tax in the state has a flat rate of 4.40 percent. It is important to note that the state income tax is different from that of the federal income tax. There are certain types of entities that are required to file this type of tax. You will need to use a Colorado business tax calculator to help you file the correct return within the due date, which is April 15, 2024.
• Corporate Income Tax – This is also known as the Colorado Corporation taxes and is levied on both foreign and domestic entities. Any business entity that has chosen to be taxed as a corporation, will be required to file this return. The three elements taken into consideration for determining the Colorado corporate income tax are property, payroll, and sales. There is also a threshold for establishing a substantial nexus in this state.

Sales and use tax

The Sales and Use Tax in the state is considered to be an important form of Colorado business tax and is applicable for a variety of entities. The state imposes sales tax on the retail sales of tangible personal property and is not applicable on services, except those that are specifically taxed by state law. The Colorado Department of Revenue administers this type of Colorado LLC taxes and it will also be applicable to restaurants, cafes, lunch counters, etc., or on the sale of food and drink being served at dining establishments and places of business. The state sales tax rate is a flat 2.9%.

Example: If your business is located in the city of Ault (Weld County) then the City Sales Tax Rate will be 3 percent and the use tax rate would also be the same. The city of Fleming in Logan County has a sales tax rate of 2% but there is no use tax. Similarly, the city of Superior in Boulder County has a sales tax of 3.46% and use tax rate of 3.3 percent.

Employer taxes

If you hire employees after starting a company in Colorado then you may be required to file employer taxes. They are also known as Colorado Wage Withholding Tax. This type of Colorado business tax requires a business to register with the Colorado Department of Revenue. As an employer, you will be required to withhold Colorado income tax from the wages of your employees. The filing of the returns is possible on a monthly, quarterly, and weekly basis depending on the total annual Colorado wage withholding liability of the employer. Every qualified employer will have to prepare the W-2 form for each of their employees for reporting this form of Colorado LLC taxes.

Local Colorado taxes

The company or the owner of a business in the state of Colorado may be subjected to several types of local taxes. This type of Colorado corporate income tax or business tax will vary from one city or county to another. Some of the most commonly applicable taxes include:

• Property Taxes
• Occupational Taxes
• Use tax
• Construction Use Tax
• Public Accommodations and Short-Term Rental Tax

Are you thinking of starting a small business in Colorado?

How are Colorado Businesses Taxed?

Once you form a business entity in the state of Colorado, it will be necessary to maintain compliance with all annual state requirements. One such annual requirement is that of filing federal and state taxes. Colorado business tax type and rate will vary according to the type of entity structure, business activity and even the local jurisdiction. Your company may be required to file multiple state or local business taxes. Let us look at the different types of entities and their tax obligations in this state.

Taxes for an LLC

If you are planning to register a limited liability company in Colorado then one of the important annual requirements will be filing of federal taxes as well as Colorado LLC taxes. A limited-liability company is known as a pass-through entity. This refers to the fact that the owner will have to file state income tax on all their profits, minus any deductions or state allowances. Colorado has a flat individual income tax rate of 4.4%. This form of Colorado business tax is due on April 15 each year and you can always leverage the state’s automatic six-month tax extension.

Taxes for a C Corporation

If you are planning to organize a C Corporation then you will be required to file different types of Colorado corporation taxes as a part of the state’s annual maintenance requirements. The most important amongst these is the Colorado corporate income tax. This tax is levied on all corporations, domestic and foreign. The current tax rate is a flat 4.40 percent. It is important to note that if the net Colorado tax liability for the tax year exceeds $5,000 then such a C corporation will have to file Colorado estimated tax payments.

• Property – $50,000
• Payroll – $50,000
• Sales – $500,000

Taxes for S Corporation

If you have started a C Corporation or a limited-liability company then you can always elect S Corporation status. This is nothing but a type of tax status or tax designation that is issued by the Internal Revenue Service (IRS). You will first have to form an LLC or a corporation and then file Form 2553 for the said entity to be treated as an S-Corp. If looked from the Colorado corporate income tax perspective, the state will treat your S corporation in the same way as the federal government would, which is that instead of the company, the owners have to file state income taxes.

Taxes for a Sole Proprietorship

If you are thinking of forming a sole proprietorship in Colorado then the most important form of Colorado business tax will be the income tax. As the name suggests, a sole proprietorship is a single owner run company and hence the owner will have to file an individual income tax return. You will be required to file the Form 1040.

Taxes for Partnerships

A partnership like a limited-liability company is also considered to be a pass-through entity. As a result, the owners of such an entity will have to file Colorado LLC taxes like the individual income tax. The income tax requirements are quite similar to that of a sole proprietorship as well as single-member LLC’s. The individual income tax returns that have to be filed using Form 1040. Partnerships will also be filed alongside Colorado K-1 (DR 0106K) as part of their return for each of their partners. This has to be filed with the Colorado Department of Revenue and the due date is April 15, each year. Another type of Colorado business tax that may be applicable is the sales tax and the use tax depending on the business activity of such a company. A partnership may also be required to file withholding tax if it has employees on wages.

Ready to incorporate your Colorado Company?

Colorado is one of the top states when it comes to providing just the right business environment. The state boasts of a pro-business environment and this includes low taxes and several forms of tax credit programs. You can choose to form a C corporation, partnership firm, sole proprietorship, Limited Liability Company, and even elect for S Corporation tax status. Once you form a new business in this state, it is important to maintain compliance with all annual requirements including filing Colorado corporate income tax returns. IncParadise can provide information and assistance pertaining to filing of state taxes.

Doing Business As or DBA in Colorado

Colorado is home to over 600,000 small businesses and this includes startups, small and medium enterprises (SME’s), home-based firms, general partnerships, sole proprietorships, large corporations, and LLCs among others. Some of these companies are operating using a business name while some apply for a Colorado DBA online to operate. There are several top brands operating from this state with several companies headquartered in Denver. The list of top companies in the state is quite long and a few names include Arrow Electronics, DISH Network, DCP Midstream, Ball, Qurate Retail, DaVita, and Ovintiv among others. If you are planning to start a new company in this state then you can choose to use the legal name of the owners, use a business name (e.g., Aspen Tours), or file a Colorado DBA online application.

What is DBA in Colorado?

If you are thinking of starting a small business then you will need to first choose a company name. The DBA name would more often than not be the first thing your customers will see, and it will further set the tone for every interaction you have going forward with the customers. The type of name to be chosen will also vary according to the type of entity. For example, a corporation name may be different from that of a sole proprietorship, limited liability company, or a partnership. Business names are normally classified in the following ways:

• Name of the business owner like Paul Faith LLC.
• Traditional business name like Colorado Springs Treks
• File a trade name in Colorado like Jason’s Plumbing

When do you need a DBA?

If you are thinking of filing a DBA in Colorado then you will be able to file it irrespective of your company structure. Of course there are certain state regulations for trade names that you will need to be compliant with. There are numerous situations or circumstances in which any company may need to choose a trade name and this is essentially the first step towards looking up a DBA in Colorado! Let’s look at some of the important factors:

• Expansion of business – If you are already operating a business and want to explore a new area in the same or another industry then this is where a DBA name can be quite effective. When you file a trade name in Colorado for this new aspect, which could be a new product or service, then your customers would be able to differentiate the two based on the business name and the trade name. Let us look at an example to get a clear picture:

  Example: You currently own a robotics company that specializes in designing, construction, and operation of robots. The name of this company is El Paso Robotics Corp. Now, you want to diversify into Artificial Intelligence (AI). Now, robotics and artificial intelligence are different areas due to their objectives and application. In such a scenario, you can conduct a Colorado trade name search and register a DBA name for the division that is focusing on AI.

• Banking Requirements – If you are planning to conduct business in any name other than your legal name, especially a sole proprietorship, then most banks require you to submit a DBA or trade name certificate for opening a business banking account.
• Operate Multiple Businesses – You need to apply for a Colorado DBA online if you plan to operate multiple businesses in the same industry or different sectors. The benefit is that when you apply for a trade name or file an assumed name, you can operate several businesses without creating or registering separate legal entities for each type of business.

Filing DBA in Colorado for LLC and Corporation

Every business being formed in Colorado will have some form of a legal name. This may be dependent on the entity structure and can be the name of the owner. It can even be a traditional company name, which appears in the new business registration documents. You can also choose to operate your company under a DBA also known as a trade name in Colorado. There is a specific process to follow when it comes to choosing a trade name. You will also be required to conduct a Colorado trade name search prior to registering the name. The rules and regulation, the process as well as registration fee will be different from that of business name reservation.

Doing Colorado Trade Name Search

If you have chosen a trade name for your Colorado Company then the first step would be to ensure that the chosen name is compliant with state trade name laws, which are governed by 2022 Colorado Code, Title 7 – Corporations and Associations, Article 71 – Trade Names. According to the laws, Colorado trade name search is one of essential processes that every business owner needs to go through as it will help you identify whether your chosen name is available or not. This is because your trade name might not be unique and several other businesses may be using the same name. If the name is available or not in use then you can go ahead and file a trade name in Colorado.

Basic business database search

The process of Colorado trade name search is similar to that of the business name search. You can conduct the business database search using business name, ID, trade name, trademark, or document number. This search will allow new businesses, both domestic and foreign entities to check if their chosen DBA name is available. Let’s look at an example to under this:

Register Your Colorado DBA

The process of entity search is the answer to the query of how do I look up a DBA in Colorado? which is one of the most common questions that business owners have. If your chosen name is available then filing a DBA in Colorado is necessary. You will be required to complete and file the Statement of Trade Name pursuant to CO Code § 7-71-101 (2022). This application has to be filed online along with a fee of $20. You have an option wherein you can request the filing to take effect immediately or you can delay it for a maximum period of 90 days. Alternatively, we can help you to register a trade name or DBA in Colorado through a process which is easier and faster.

Do you want to file a trade name in Colorado?

Managing Colorado DBA

Once you file a Colorado DBA online application, you can choose when the trade name becomes active. Once it is active, you will be able to use this as the entity name for conducting business within this state. There are certain rules and regulations pertaining to a Colorado trade name or DBA including that of renewal of a DBA, changing, or canceling of the trade name in the jurisdiction where the business is operating from. Let’s look at the various processes applicable to managing a trade name.

How to renew a Colorado DBA?

Once you file a trade name in Colorado, you will have to renew it annually to ensure it remains effective. According to the Colorado Secretary of State, trade name of a non-reporting entity, dissolved or delinquent entity as well as an individual will be effective for a period of one year pursuant to CO Code § 7-71-105 (2022). Similarly, the trade name for a reporting entity (corporation or LLC) will remain effective as long as the said company files its annual reports on time or maintains a registered agent in the state.

How to change Colorado DBA?

After filing a DBA in Colorado, if you want to change the trade name at any given point in time, is it possible? Yes, it is possible. You will be required to file the Trade Name Change or Business Entity Name Change Form as applicable in the city or county that your business is operating from.

Example: If your company is based in Boulder, Colorado then you will need to file “Permit Application and Report of Changes” form, which has a dedicated section for Change of Trade Name or Corporation Name.

How to cancel Colorado DBA?

Once you have filed a Colorado DBA online application, if you decide after some time that you want to cancel the said trade name then is it possible? Yes, it is possible and you will be required to submit a Statement of Withdrawal of Trade Name with the secretary of state pursuant to CO Code § 7-71-106 (2022). There is a fee of $10 for this.

Need Any Assistance in Filing Colorado DBA?

The process to apply for a Colorado DBA online will require you to provide accurate information pertaining to your business and also ensure total compliance with state trade name rules and regulations as well as federal trademark laws. The process of conducting a Colorado trade name search and adhering to all DBA guidelines can be quite a challenging exercise. IncParadise can gladly assist you with this process. We have expertise and knowledge regarding the Colorado state DBA laws and Federal Trademark regulations.

Sole Proprietorship in Colorado

A report by the Small Business Administration (SBA) reveals that Colorado is home to more than 600,000 small businesses and a large number of these entities are sole proprietorships. This is because a first time business owner finds a sole proprietorship in Colorado as a comfortable to operate entity because it lacks the extensive paperwork of a corporation or the multiple decision makers in a limited liability company. If you search for a sole proprietorship in Colorado, you will find this type of entity exists and operates in almost all industries right from home based bakeries to larger food establishments and tour operators. Sole proprietorships can be easily formed and operated within some of the top industries in the state including scientific, construction, retail trade, and technical services industry.

What is a sole proprietorship in Colorado?

It is important to inform oneself on how to start a sole proprietorship in Colorado before you actually start investing in your startup. This type of business entity constitutes several areas that most first time business owners are unaware of. A sole proprietorship is known as an unincorporated entity, which is owned as well as operated by a single person. This type of entity is also known as a sole tradership or individual entrepreneurship. Some of the examples of such an entity are graphic designers, software designers, programmers, photographers, travel journalists, bakery, dental clinic, and pharmacy among others. It is easy to form a sole proprietorship in Colorado as this type of entity has salient advantages over various other types of entities with respect to formation, finances, taxes, and documentation.

Important features of sole proprietorship in Colorado

If you are planning to start a sole proprietorship in Colorado then this is the most basic of all types of entity structures. It is also the oldest type of entity formed and operated in the world and is owned, managed, as well as controlled by an individual or a single person. When you search sole proprietorship in Colorado, you will gain insight on the fact that this type of entity has several remarkable features. Let’s look at some of them

• Ease of formation and Closure – One of the most important features of a sole proprietorship is that it is easy to form. All you have to do is file a Colorado trade name and obtain the necessary licenses. You are not even required to register this type of entity with the State of Colorado. Similarly, it is easy to close a sole tradership business. If you want to dissolve your business at any point in time then unlike corporations and LLC’s, you will not be required to file any articles of dissolution or closure.
• Liability – When you form a sole proprietorship in Colorado, you will be responsible for all debts. Whether you have taken a loan for the business or a personal loan, either ways, you will be responsible for paying off the loan. This can be an advantage as well as a disadvantage.
• Profit or loss – One of the key aspects of a sole proprietorship business is that profit and loss will not be shared. If your company earns a profit then that will belong to the owner and the same rule stands for losses incurred by the company.

Do you want to start a sole proprietorship in Colorado?

Steps to Start Sole Proprietorship in Colorado

If you are wondering how to start a sole proprietorship in Colorado then there are several processes that you need to focus on. These processes are associated with the formation of a new business as well as making it operational. This also includes fulfilling state annual maintenance requirements, which every new company in the state has to be compliant with. Let’s look at the various important processes and steps involved.

1. Prepare a business plan

Whether you start a small business or a large company, one of the very first requirements is that of a comprehensive business plan. It needs to be a carefully thought-out plan as it will lay the foundation for how to start a sole proprietorship in Colorado while ensuring key business objectives are also well laid out. A good business plan will incorporate strategic actions regarding current and future goals while creating a roadmap. It will also take into account various factors that play a key role towards making your sole proprietorship growth oriented and profitable.

• Executive Summary
• Company Description
• Long and short-term Objectives
• Competition Analysis
• Market analysis
• Product and Services
• Target audience
• Operating plan
• Marketing Plan
• Financial Plan

2. Choose a Colorado business name

If you want to form a sole proprietorship in Colorado then it is one of the simplest business structures. However, you will not be able to establish a company without a proper business name. You can always start by using your legal name as the business name or trade name. The importance of the name not only lies with forming a company but also plays a key role in other aspects like sales, marketing, branding, domain name for website, and opening a bank account among others.

• Try to choose a name that is easy to spell and remember
• Identify a name that is not similar to that of your competition
• Follow the Colorado naming rules and guidelines
• Take help from online business name generators like Namelix, BrandCrowd etc.
• You can use your legal name (e.g. – Susan White Cafe)
• You can choose to file a Colorado trade name
• Try to secure trademark protection for your chosen business name

3. File a trade name

If you have taken a decision to not use your legal name then the option is to file a Colorado trade name. A trade name is also known as a fictitious name or a DBA (doing business as) name. It is any name other than the legal name of the owner. When you choose such a name, you are not required to include any additional words, phrases, or abbreviations like corporation, LLC etc. Let’s look at an example to understand this.

4. Get an EIN

If you are wondering how to start a sole proprietorship in Colorado then one of the important steps would be to apply for and obtain a proper tax ID. Tax ID’s are mostly required by new and existing businesses for filing of federal and state taxes. Generally, a sole proprietorship in Colorado can file individual income taxes using the Social Security Number (SSN) of the owner. You may need to apply for an Employer Identification Number (EIN) with the IRS (Internal Revenue Service) by filing form SS-4, if you meet any of the following requirements:

• If your company starts hiring employees
• If you open a business bank account
• When the owner has a Keogh plan
• The state of formation requires filing of excise tax returns
• When you change the entity structure from a sole proprietorship to a limited-liability company
• Filing of Chapter 7 (liquidation) or Chapter 11 (reorganization) bankruptcy

5. Obtain the necessary licenses and permits

If you are wondering how to start a sole proprietorship in Colorado then one of the key areas related to operating your company is the type of licenses that you may need. The licensing regulations for a sole proprietorship business will be quite similar to that of any other form of entity including corporations and LLCs. The type of license required when you start a sole proprietorship in Colorado will vary according to the profession, location, and the business activity. The most common licenses applicable would be:

• Professional or occupational License
• Sales tax license
• Regulatory licenses
• Municipal or county licenses
• Zoning permits

6. Open a bank account for your Colorado business

If you form a sole proprietorship in Colorado then it becomes necessary to separate your personal income from the income you derive from your business. This is where opening a business bank account can be quite beneficial. One of the top advantages of a separate bank account for the company is that it will help create a distinction between personal and business-related expenses especially when it comes to filing taxes. It will aid accurate bookkeeping and analytics while boosting your business credibility.

7. Report and pay taxes

When you search a sole proprietorship in Colorado for taxes, the most important would be the individual income tax. Since, this type of entity is a single owner entity, all profits and losses for the company will be included in the individual tax return of the owner. The state individual income tax rate is a flat 4.40 percent in Colorado. Apart from this, you may be required to file sales and use tax depending on the primary business activity. If you hire employees then you will have to file withholding taxes as well.

Ready to Start a Sole Proprietorship Business in Colorado

If you have already decided to form a sole proprietorship in Colorado then there are several advantages of this type of entity. You can enjoy numerous state benefits including participating in income tax credit programs. You will not be required to register your company with the Secretary of State unlike for LLCs and corporations. However, you will be required to maintain compliance as far as state annual requirements are concerned as this will help you to enjoy a good standing with the state.

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.

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.

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.

• 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.

• 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.

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.

Colorado Business Entity Search

A business name is considered as the cornerstone of any brand and if you want your startup to stand apart from others, then you need to choose the right name. There are examples of several big brands who created their names from a concept e.g., Adidas focused on the concept of quality and innovation and created a tagline – impossible is nothing. You can imagine the sheer power behind such a brand. But the important question is where do you really start?

• You need to avoid names that will be hard to spell for any customer. A simple and straightforward name like Orange Inc., or Stone LLC., would be perfect
• It is also important to follow the Colorado business name rules and guidelines
• Always try and choose a business name that will not limit your company. For example, books4kids can be limiting as you may want to diversify into adult books or comics in the near future
• Ensure that the chosen company name is consistent with the brand image
• Ensure your chosen name is not similar to that of a competitor
• Always conduct a Colorado business name search prior to reserving or registering the name with the state
• Pick an entity name that will be web-friendly as this will ensure domain name is available for such a name
• Lastly, you can also get some good company name ideas by using online business name generators

What is a Colorado business name search?

Once you have chosen the type of structure like an LLC or a C Corporation, the next step would be to identify a company name based on Colorado business name rules. Once a name has been chosen, you will need to check if you can actually use such a name in the state of Colorado. This is possible by conducting a Colorado business name search. This is a type of entity search that is available in all states of the USA although the process of searching and facilitating authority will be different. The governing authority for an entity name search is facilitated by the office of the Colorado Secretary of State.

• Business Database Search – This will enable you to search for a business name, trademark, trade name, ID or document number
• Business Entity Search – This will enable you to search for businesses active and uses Organization name or Organizational ID# to facilitate the process.

Naming your Colorado LLC

If you have taken a decision to form a limited liability company then one of the foremost processes is to name your company. A business name will provide a face to your LLC and it can be used for reaching out to your prospective customers. An effective business name is a name that conveys information about the values of the company as well as the quality of its offerings like specialized services. The name of your LLC will also have an impact on your overall business strategy. So, let’s take a look at the important areas to focus on including conducting a Colorado LLC name search.

General LLC naming rules

Naming your limited liability company can be a short process or a long process. When choosing a LLC name, it is important to follow the Colorado business name rules and guidelines as regulated by 2022 Colorado Code, Title 7 – Corporations and Associations, Article 90 – Colorado Corporations and Associations Act, Part 6 – Entity Names. You will also need to conduct a Colorado LLC name search after choosing a name compliant with governing laws. The general rules for an LLC name are:

• Your company name should have words like Limited Liability Company or limited liability co.
• The business name can have abbreviations like LLC or L.L.C. pursuant to CO Code § 7-90-601 (2022)
• The business name should be distinguishable from any other name in the database of the Colorado Secretary of State like JB LLC is not the same as JB Limited Liability Company
• The law states that a business cannot use a name that implies or is similar to that of a government agency or unit
• It is important to note that the reservation of names containing certain words are prohibited like “bank” or “trust.”

Search LLC name availability on the Colorado Secretary of State’s website

Once you have identified a name for your limited-liability company, it is necessary to conduct a Colorado business name availability search. The office of the Secretary of State offers an online portal that will enable a name search for your LLC. This search brings up any similar names after searching through the entire state database also known as a business entity database. There are different ways to conduct the search and they are:

• Advanced Search using registered agent name or Trade name
• Entity search using organization name or Organizational ID #
• Business survey information search
• Trademark advanced search

Are you planning to form an LLC in Colorado?

Naming your Colorado Corporation

A Colorado Corporation is considered as one of the best forms of business to operate. It is also known as a traditional corporation or a C Corp and once you form this type of company, you can always elect S Corp tax status. If you have taken the decision to incorporate in this state or move your existing business from another state then it becomes necessary to first identify a corporate name. If your company is a foreign entity then you can conduct a Colorado Corporation name search for the existing name. If it is a new domestic entity then you need to choose a name while ensuring the name is compliant with all Colorado business name rules and regulations. Let’s look at some of the important aspects to consider when naming your business corporation.

General Corporation naming rules

When choosing a corporate name, there are several aspects that should be considered like:

• The purpose of your company,
• The products or services being offered,
• The need to create a distinctive impression,
• The idea that is being delivered to the consumer should be relevant

• The company name should contain words like “corporation”, “company”, “incorporated”, or “limited”
• The company name may contain abbreviations as well like “corp.”, “co.”, “inc.”, or “ltd.”
• The chosen name should not imply that the said corporation has been organized for any purpose other than what has been outlined in the articles of incorporation.
• The law states that the application for reservation of name will be rejected if it contains certain words will like Bank, Banking, Engineer, etc
• The chosen name should be distinguishable from those already existing in the state entity database e.g., LKC Inc is the same as L.K.C. Inc.

Search Corporation name availability on the Colorado Secretary of State’s website

The Colorado business name availability search is the most important step towards name reservation in the state. If your company name is not reserved then you will not be able to incorporate in this state. The Colorado Corporation name search is facilitated by the online portal of the Colorado Secretary of State. There are different ways by which you can conduct this search and they are:

• Advanced Search using registered agent name or Trade name
• Entity search using organization name or Organizational ID #
• Business survey information search
• Trademark advanced search

Are you thinking of Incorporating in Colorado?

Need any Assistance in a Colorado Business Name Search?

A corporate name or an LLC name is the most important aspect of any business as it helps in creating an identity for your company. An impactful name will make your business stand out and this is good from the perspective of marketing, sales, and competition. Hence, choosing the right name is not the only important step but it should be followed by conducting a Colorado business name search. This process will ensure your chosen name can be used in this state.