22/02/2024

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How to Start a Business in Colorado

How to Start a Business in Colorado

If you’d like to start a business in Colorado, the process may seem confusing. You can find information on a variety of state websites, including MyBizColorado and the Secretary of State’s website. You can also find a comprehensive guide in the Colorado Business Resource book.

Ultimately, starting a new business in Colorado takes nine steps:

  1. Start with a business plan
  2. Select a business entity
  3. Choose a business name.
  4. Sign up for MyBizColorado.
  5. Choose a registered agent.
  6. Register your business.
  7. Apply for an employer identification number (EIN).
  8. Apply for a business license.
  9. Open a business bank account.

9 steps to register your business in Colorado

1. Start with a business plan

In order to formulate a successful business plan, you’ll likely want to start with market research. Market research enables you to determine if there is demand for your business, what your ideal customer may look like, how many potential customers you may have and how many competitors you already have on the market.

Understanding these dynamics can help you plan for whatever your business may need to overcome, including correctly setting the price you’ll charge.The U.S. Small Business Administration (SBA) offers a wealth of information on market research if you’d like to learn more.

You may also want to conduct some competitive research. This will help you identify what needs your business can meet that competitors don’t currently. For instance, you may find that you need fewer customers if you offer a better, higher quality product than your competitors. Alternately, you may find that your competitor can’t reach certain customers, making them your ideal customer profile.

Once you’ve completed your relevant market and competitive research, you’re ready to begin your business plan. A strong business plan should walk you through starting your business but should also identify how you’ll manage each stage your business enters.

As part of your planning process, also consider the tools you will need to launch and maintain your business. These may include tools such as:

2. Select a business entity

Like many states, Colorado recognizes a variety of business entities. This includes:

3. Choose a business name

In Colorado, business names must be distinguishable from other businesses. This means they can be easily differentiated from other businesses. Colorado offers a business name FAQ page to determine if your name is distinguishable from other businesses.

 Colorado also has several business naming guidelines:

  • The state limits the types of acceptable characters that your business can use in its name. Typically, those characters are found on a QWERTY keyboard and include letters, numbers and a limited set of symbols. Find which characters are acceptable in a Colorado business name.
  • The abbreviation for the type of business you register as must be included in your business name. For instance, if you register as a limited liability company, you’ll need to include LLC at the end of your business name.

You can find out whether your business name is currently available by searching the Colorado Secretary of State’s website. Under Colorado’s business center, you will find its search business database, which will allow you to search to see if your business name is currently in use.

Once you’ve found a business name that is unique, you may reserve that business name for up to 120 days by filing a statement or reservation of name on the Colorado Secretary of State website and submitting with a $25 filing fee.

For more information on how to choose a marketable business name and ensure it is not nationally protected from infringement, read our business naming guide.

4. Sign up for MyBizColorado

MyBizColorado is a website dedicated to businesses registered in the state of Colorado. Set up an account here to manage future steps. Most, if not all, of the tasks related to your ongoing business, can be managed through the MyBizColorado website.

5. Choose your registered agent

Businesses in Colorado are required to have a named registered agent. A registered agent is the primary person or entity responsible for receiving and managing service of process. A registered agent must have a physical location in the state of Colorado and be able to receive any relevant business documents during normal business hours.

If you’re not sure who to choose as a registered agent, you may find our list of the best registered agent services valuable.

6. Register your business

Once you have completed the above, you can register your business in Colorado. Keep in mind that sole proprietorships do not have to register with the state. For entity types that must register, visit the Colorado Secretary of State’s website and choose which type of business you’d like to start.

Before filing, you can review various documents Colorado provides, like this LLC checklist, to be sure you have all the information you need. You’ll also want to have your business plan available to be sure that no information has changed before filing. You can find registration forms (including online forms) by entity type on Colorado Secretary of State’s business forms list.

7. Apply for an EIN

To start running your business in Colorado, you’ll need an employer identification number (EIN). An EIN is a tax identification number issued by the IRS. Your EIN is used for all tax administration purposes.

It’s required for tax filing at the federal, state and local levels and as part of employee payroll processing. In addition, most banks require an EIN to open a bank account or extend lines of credit, so you’ll need to complete this step before opening a bank account for your business.

All businesses can apply for an EIN through the IRS website for free.

8. Apply for a business license

All businesses in Colorado are not required to have a business license to operate. The Colorado Department of Regulatory Agencies (DORA) outlines over 50 regulatory agencies that require licenses in Colorado and how to obtain them.

As a general rule, if your business influences public health, education or finances, you are likely to need a license in Colorado. This includes accounting firms, health professionals and even bus drivers. Be sure to review the full regulatory table on DORA to see if your business requires any applicable business licenses.

9. Open a business bank account

In order to get a bank account for your business in Colorado, you’ll need to have:

  • A business name.
  • An EIN.
  • The information of your registered agent. 
  • Other relevant business documents, like your articles of incorporation or operating agreement.
  • Your business license(s) (if applicable).

Opening a business bank account provides you with additional legal and tax protection by keeping your business and personal bank accounts separate. It also provides a level of professionalism that your customers expect. You may wish to open a business credit card as well so that your business expenses and liabilities can be managed entirely separately from any personal accounts.

Find the best company formation services for Colorado: Best LLC services of 2023

Our top recommended company formation service for Colorado

Frequently asked questions (FAQs)

In the state of Colorado, you’ll pay $25 to reserve the name of your business and an additional $50 when you file your articles of incorporation. Should you need to change your business name or dissolve the business, you can find all fees outlined in the Colorado business fees page.

If you submit paperwork online, it is filed in real-time, so it will be processed immediately after you pay the necessary fees. If you are filling out paperwork that can’t be done online, it will be processed by the Colorado Secretary of State’s office anywhere from seven to 10 days after the paperwork is received.

Colorado requires that you have a location in Colorado where you can receive legal and tax documents on your business’s behalf. This location can be your registered agent’s physical location or a physical location your business operates out of in Colorado.