Starting a Business in Colorado: LLCs, Corporations, DBAs
Starting a business in Colorado with MyCompanyWorks is fast and simple. Since 2001, thousands of entrepreneurs have formed companies with us. Follow our 12-step checklist to register a business in Colorado.
- Step 1: Choose Your Entity Type – LLC, Corporation, or DBA
- Step 2: Choose a Great Business Name
- Step 3: Register Your Business in Colorado
- Step 4: Colorado Employers Must Apply for a Federal Tax ID
- Step 5: Open Business Bank Accounts and Apply for Credit
- Step 6: Establish Your Accounting and Filing Systems
- Step 7: Apply for Colorado Business Licenses and Permits
- Step 8: Interview and Hire Qualified Employees (optional)
- Step 9: Apply for Business Insurance Policies
- Step 10: Organize and Systemize Business Processes
- Step 11: Brand Your Business and Start a Marketing Plan
- Step 12: Recurring Business Requirements
Things to Know Before You Start a Business in Colorado
The Colorado Economy is Favorable for Small Business
According to the SBA, Colorado was home to 611,495 small businesses in 2018. That’s 99.5% of all Colorado businesses! Half the state’s working-class is employed by small businesses.
U.S. News & World Report ranked Colorado as the 4th best business environment across the United States in 2019. Low corporate tax and a high GDP make the Centennial State a great place to start a business.
Major Companies in Colorado
Zippia.com reports that some of the largest Colorado companies are Macy’s, Re-Max, JBS USA, and DaVita, just to name a few.
Colorado is one of the top states for business investments
In 2017, Colorado ranked fourth in the nation for the amount invested in local companies. Denver’s maturing tech scene continues to boom, and cost of living in Colorado is generally lower than other states. Additionally, Boulder and Denver offer considerable startup resources, and the opportunity to raise a great deal of capital.
Step 1: Choose Your Entity Type – LLC, Corporation, or DBA
There are three basic options for registering a business: a DBA, corporation, or LLC. Read our guide on business entities for more information.
- Colorado LLC: the most popular option for entrepreneurs. The LLC is a separate entity. It has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.
- Colorado Corporation: is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors, and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
- DBA or “Doing Business As”: also known as a “Fictitious Business Name” or FBN. The purpose of a DBA is to be able to separate business and personal matters with a distinct business name. If you already have an LLC or Corporation, you can use a DBA to start a new division without having to start a new company. However, the DBA does not provide liability protection like the LLC and Corporation. Even if you want to use a DBA, we still recommend forming either an LLC or Corporation for liability and tax benefits.
Step 2: Choose a Great Business Name
A business name is one of the most important decisions you’ll make when starting a company. To avoid costly name changes in the future, it’s best to pick one that’s original and publicly available, not trademarked by someone else.
Business Name Best Practices
A great business name is easy to remember, pronounce, and stands the test of time. If you’re starting with one product or service, make sure to consider future additions and include them in your business name. Say your potential names out loud and try them on your relatives and friends. Think about how your names sound from a customer’s point of view. Do they describe your products and services? Is it unique and easy to remember? Will it grow with your business? Taking the time to choose an effective business name will save tons of money and the hassle involved with a name change.
IMPORTANT: Nationwide and international companies must use a unique business name to avoid confusion on legal and tax documents.
Scan the Internet and Colorado State Sites
Perform a quick search on the web for your proposed name to see if there are any conflicts. Quick searches on major search engines (Google, Bing, DuckDuckGo) will help you determine if other businesses are using your proposed name. This should cover many cases where a company name is being used but not officially trademarked (see next tip). To be sure your company name is available, use the Colorado Business Entity Database and search the State of Colorado site for your name.
NOTE: Make sure to look for alternative spellings, plurals, and misspellings to make sure the name you are registering is not too similar to an existing one. The state will reject your registration if your business name is close enough to an existing company’s name. Familiarize yourself with the Colorado naming guidelines. To register an LLC, the name of your company must include the words Limited Liability Company or the abbreviation LLC. Colorado also has certain naming restrictions.
Search the US Patent and Trademark Office (USPTO) for name trademarks
Do you have a name for your business or product? To avoid spending a lot of money on trademark professionals, which often come at a hefty price, try looking up your potential trademarks on Google. You may find that they’ve already been registered and you don’t need to do the search to confirm this.
TIP: Search for plural names, various spellings, and even misspellings to make sure you’re considering a unique business name.
Starting a business in Colorado? MyCompanyWorks can start your Colorado LLC, Corporation, or DBA order in as little as one business day. Start now!
Step 3: Register Your Business in Colorado
How to form an LLC in Colorado
- File your LLC Articles of Organization with the Colorado Secretary of State.
- Appoint yourself or hire a professional Registered Agent.
- Even if you’re a 1 person LLC, you’ll need to hold an organizational meeting to record contributions, decide which members will manage the business, issue certificates to members, and form your operating agreement.
OPTIONAL: You can file IRS Form 2553 to become an S-Corp. Speak with your tax advisor before doing so as it can add complexity to your company’s taxes.
How to incorporate in Colorado
- File your Articles of Incorporation with the Colorado Secretary of State.
- Hold an Organizational Meeting to organize the business, collect shareholder contributions and issue stock certificates, vote on directors and officers, adopt your company’s bylaws, and more.
- Appoint yourself or hire a professional Registered Agent.
OPTIONAL: Corporations can elect the small business, or S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
Considerations when starting a business in Colorado
- The Colorado Secretary of State could take anywhere from 2-3 business days for online filings and 3-5 days for mail-in filings. Turnaround times usually increase during peak periods.
TIP: Check our order form to see current Colorado filing turnaround times. - A Registered Agent is required for every Colorado LLC and Corporation. A registered agent must have a physical street address in Colorado. A Professional Registered Agent can help you save a lot of time and hassle when it comes to addressing important documents. As an example, they can forward any letters they receive and make sure your address is always up-to-date.
How to file a DBA in Colorado
- Check the availability of your desired business name by calling your county recorder or visiting their website. You can search for “YOURCOUNTY county recorder” to find your county recorder.
- Request forms from your county or file online if the option is available.
- File forms with your local county.
NOTE: In Colorado, businesses have 30 to 60 days during which it can use a DBA without registering with the Secretary of State. After this period, they must register the name or stop using it. Your county may require you to have forms notarized and published.
Order notaries now from OnlineNotary.net.
Ready to Register Your Business in Colorado? Let Us Do The Work
MyCompanyWorks offers business formation packages including:
- Online business filing for fast processing
- 100% Satisfaction Guarantee
- FAQs, helpful articles, and a friendly support team to help you through the process
Step 4: Colorado Employers Must Apply for a Federal Tax ID
Whether you form an LLC, Corporation, the IRS requires companies to obtain a tax ID, also called the Employer Identification Number, or EIN. DBAs are only required to apply for an EIN if you’re going to hire employees. If you file a DBA but don’t have an EIN, you’ll be required to enter your personal social security number on all legal documents and tax filings. An EIN can reduce the risk of identity theft, so we recommend applying for one, even if you don’t have employees. You can apply online with the IRS or complete and fax or mail form IRS Form SS-4.
NOTE: International business owners must apply for an EIN by phone if you’re submitting your application. We can also apply for your EIN when you order any of our Colorado startup packages.
Step 5: Open Business Bank Accounts and Apply for Credit
In order to keep business and personal expenses separate, you should open a separate bank account for your business. Additionally, getting credit cards specifically geared towards businesses is a great way to begin building company credit. Even if you start with cash, you may want to borrow money in the future to grow your business. You can start by checking with your personal bank to find out about business options. If they don’t offer business products, search online to find local and online business banks. Most banks require the following documents:
- Filed business articles
- Employer Identification Number (EIN)
- Business resolution to authorize opening a business bank account or applying for credit signed by the owners, members, officers or directors, etc.
Top business banks in Colorado:
- Bank of Colorado
- Chase
- Colorado Business Bank
- Community Banks of Colorado
- U.S. Bank
Our recommended banking partners can help you with business banking and credit options.
Step 6: Establish Your Accounting and Filing Systems
As a Colorado business, you’re required to file annual reports and tax filings. You can read about the taxes your new company must pay here. Starting a system to manage finances and paperwork at the start of the business will prevent administrative headaches in the future.
Company documents must be kept for 3 years at a minimum, including information about all the owners and their addresses, copies of all of the formation documents, financial statements, annual reports, amendments, or changes to the company. All tax and corporate filings should be kept for at least 7 years from the date of the last filing and accessible at all times, so set up online storage or use a paper filing cabinet to keep records organized.
If you’re doing your own accounting, there are many free and low-cost tools and programs to help you track expenses and process invoices. You can also turn your finances and record-keeping over to accounting professionals and virtual assistants if you can afford to pay someone to do the work for you.
Our Vendor Network has a list of recommended accountants, accounting software, and bookkeepers to help you organize books and financial records.
TIP: our guide to accounting and financial management offers help to set up an accounting system and buy affordable accounting software.
Step 7: Apply for Colorado Business Licenses and Permits
Now that you’ve registered as a business in Colorado, you’ll need to apply for city – and possibly county licenses. Colorado does not issue state business licenses, but you may be required to apply for a state sales tax license. Each business has different licensing requirements, but here is a list of common Colorado business licenses and permits.
- City or County business license
- Sales and use tax license
- Beer and wine permit
- Plumbing permit
- Bingo and raffle license
- Alarm permit
- Building permit
- Health permit
- Signage permit
- Zoning permit
TIP: You can order a complete business license package from our trusted partners.
Step 8: Interview and Hire Qualified Employees (optional)
If you’re going to hire help, the Colorado Department of Labor and Employment can help you organize yourself as an employer. You’ll find information about service providers, free recruiter services, and tools to help you manage your small business. Our guide to hiring and paying employees also offers helpful tips to start the hiring process.
Find qualified Payroll Providers in our Vendor Network.
Step 9: Apply for Business Insurance Policies
There are a few types of business insurance but they often come in packages like General Business Insurance or a Business Owner’s Policy. An insurance policy can protect your company in case of an accident or theft. The average cost for coverage is around $300 per year and it’s worth it for the additional level of protection.
Need insurance? Apply today with one of our recommended business insurance providers.
Step 10: Organize and Systemize Business Processes
Ensure the continued functioning of your business in case someone else needs to take over and manage it. Make sure that person can handle all aspects of running the business, like processing orders and paying bills. This basically means you want to automate the processes of your business so you can focus on growing it. Here are a few tips to get started.
Learn how to organize and automate your business with our Manage Your Company resources.
Step 11: Brand Your Business and Start a Marketing Plan
You’ve set up your company for success, and now it’s time to develop a logo, website, and marketing plan. Research your target customer for the products or services you offer, then learn how to develop a startup marketing plan here.
Our Marketing & Sales guide has lots of useful tips and links to helpful resources.
Step 12: Recurring Business Requirements
DBA: Your Fictitious Business Name is valid for 5 years and you can renew it at any time.
LLC: Colorado LLCs are required to file a Periodic Report with the Colorado Secretary of State each year, in addition to tax filings. If you want to know more about your business’ taxes, click here. Periodic reports must be filed before the last day of the second month following the anniversary date when your LLC was formed. The cost is $10 to file. You’ll also need to make sure licenses and permits are renewed as required.
Corporation: Colorado Corporations must file a Periodic Report with the state each year, on or before the last day of the second month following the anniversary of the date you were incorporated. The cost is $10 to file your Periodic Report.
Corporations are also required to keep business licenses and permits current.
Manage most compliance matters automatically with MyCompanyWorks Premium™
Ready to start a business in Colorado?
Our Colorado filing services will help you get started as quickly as possible. Click here to start your Colorado business now.
Important Colorado Contacts
1700 Broadway Suite 200 Denver, CO 80290 303-894-2200
Colorado Job Link Employer Portal
Colorado State Taxation Departments and Resources
Colorado Department of Licensing and Regulatory Affairs
Colorado State Labor and Employment Departments
Colorado Department of Labor and Economic Opportunity
Tax Information For Colorado Businesses
Colorado Startup Resources
1. Colorado Small Business Administration
Small Business Administration (SBA) Colorado State District Office
2. SCORE Mentors
Active and retired entrepreneurs volunteer at SCORE to support small business startups. Learn from the experts and connect with a local mentor.
3. Colorado State Legal Statutes
- Colorado Business Corporation Act
- Colorado State Limited Liability Companies – state laws and regulations for Colorado LLCs.
- Colorado State Businesses and Professions – includes regulations on topics such as business and professions codes.
4. Colorado State Chambers of Commerce
5. Colorado Angel Investors
6. Colorado Business News
7. Colorado State Small Business Development Center
8. Colorado Green Business Initiative
