How To Register a Business in Colorado: Legal Essentials for Entrepreneurs

Note: This article is intended for educational purposes only and to be used as legal advice.

Did you know Colorado routinely ranks high in lists showcasing states with more entrepreneurs than others?

Since the Centennial State has so many entrepreneurs, it shouldn’t surprise you that it also has more small businesses than many other states. Colorado is home to almost 180,000 businesses, and over 60% are small businesses. Denver’s experienced business attorneys help them flourish.

Are you interested in discovering how to register a business in Colorado so you can fully express your entrepreneurial spirit? Keep reading to learn how.

Why You Should Register a Business in Colorado

Before we discuss how to register a business in Colorado, let’s briefly touch on why it’s important to do so in the first place. Registering a business in Colorful Colorado provides the following benefits:

  • Legitimizes your business
  • Gives your business credibility
  • Delivers legal protection to your business
  • Offers access to Colorado’s business incentives

A Step-by-Step Guide on How To Register a Business in Colorado

While you should always register a business in Colorado when starting one, you should also understand you can’t work your way through the process of doing it overnight. It’ll take months, in many cases, to build a new business in Colorado from the ground up. Below, let’s walk through the steps associated with doing it.

1. Choose a Business Structure

Selecting the right business structure is one of the first things you should do when figuring out how to register a business in Colorado. You can pick from a handful of different business structures, including the following:

  • Sole Proprietorship: Fails to provide personal liability protection but is an ideal solution for solo entrepreneurs
  • Partnership: Caters to companies with more than one owner and can be set up as a general partnership, a limited partnership, or a limited liability partnership
  • Limited Liability Company: Works well for small business owners who want personal liability protection as well as tax benefits
  • Corporation: Offers advantages for larger companies and provides C-corporation or S-corporation options
  • Nonprofit: Extends an option to those starting charitable companies along with educational and religious companies

2. Create a Business Name and Establish a Business Plan

As you determine how to register a business in Colorado, you can begin to make it feel real by coming up with a name for it. Try to create a business name that’s catchy and memorable, and don’t forget to check out the Colorado Secretary of State’s website to make sure a name you love isn’t already in use.
In addition to choosing a business name, you’ll need to establish a well-thought-out business plan. This is one of the more time-consuming parts of the process.

Your business plan should include key elements like:

  • Executive summary
  • Company description
  • Market analysis
  • Marketing and sales strategies
  • Financial projections
  • You’ll present a business plan to potential lenders to secure business funding. Make it as detailed and thorough as possible so everyone knows what they are investing in.

3. Register With the Colorado Secretary of State

When you visit the Colorado Secretary of State’s website to see whether a business name you like is already being used, bookmark it since you’ll need to return to it early and often. You will, for example, need to register your business with the Colorado Secretary of State to make it legitimate.

The only exception to this rule is if you’re starting a business in Colorado as a Sole Proprietorship. You won’t need to register it in this case, though you must file a name for it.

Otherwise, those starting Colorado businesses with other structures must register them with the Colorado Secretary of State and take the right approach. If, for instance, you’re registering a corporation, prepare to file articles of incorporation and pick a registered agent when determining how to register a business in Colorado.

4. Apply For an Employer Identification Number

Most registered business in Colorado or any other state for that matter must apply for an Employer Identification Number (EIN) through the Internal Revenue Service. You can do it online, by mail, or via fax.

Keep in mind, not all businesses are required to apply for an EIN. Having an EIN will allow you to open a bank account specifically for your business and file business taxes with the IRS.

5. Register With the Colorado Department of Revenue

The IRS isn’t the only entity you’ll need to pay taxes to when you start growing your business in Colorado. You must also file state taxes through the Colorado Department of Revenue.

Before you can begin paying state taxes, register with the Colorado Department of Revenue. Research the state’s business tax rules and regulations, so you know which tax responsibilities will await you.

6. Beneficial Ownership Information Reporting

In 2021, the United States Congress passed a law that required certain types of corporations, limited liability companies, and similar entities registered in the United States to report information about their beneficial owners.

You will need to report this information online shortly after creating or registering your company.

7. Secure the Necessary Business Licenses, Certifications, and Permits

Depending on which type of business you plan to start, you’ll likely need to secure a business license along with different certifications and permits that allow you to provide products and/or services to those in your community. Work to earn the right business licenses, certifications, and permits early in the process to prevent delays.

8. Learn About Federal and State Employment Laws

One of the last things you’ll need to do while finding out how to register a business in Colorado is educate yourself on the federal and state employment laws that will apply to your business. Discover the ins and outs of:

  • Workers’ Compensation Insurance
  • Employment Eligibility Verification
  • Unemployment Insurance Tax
  • Having a solid understanding of the labor statutes in Colorado can help you avoid making any crucial mistakes as you start building your business and flexing your entrepreneurial muscles.

Need Help Registering a Business in Colorado? Contact a Colorado Business Lawyer

Knowing how to register a business in Colorado and actually doing it are two entirely different things. Thomas N. Scheffel & Associates, P.C., can provide you with a Colorado business lawyer to help turn your business ideas into realities. Call us at 303-759-5937 to discuss topics like starting a new business or business succession to get (and stay) on the right track moving forward.