Colorado Guidelines on Starting a Small Business

Business Structure

The State of Colorado allows all popular business structures, including sole proprietorships, corporations, nonprofit organizations, partnerships, limited liability companies and their derivatives. Colorado differs slightly from many other states in that sole proprietors must also register with the Secretary of State along with all other business entities. Normally, sole proprietors are only required to register with their town and state tax office.

Each city and town in Colorado has specific license and permit requirements for small businesses. A call or visit to your area's county, city or town office or website will yield the necessary information, paperwork and applicable fees for your business requirements. You may also be required to obtain additional local occupancy, zoning, environmental and safety permits pertinent to your operation, location, and type and scope of business.

Colorado does not require a state license or permit to conduct general business, but does have specific license requirements for particular professions and business types. To see if your business or profession is covered by the licensing statutes, check the Colorado Department of Regulatory Agencies website (see Resource section). Also called DORA, this regulatory office handles the necessary paperwork and issues licenses for applicable businesses and professions. Regardless of license, you must register your business with the state tax office, apply for a sales tax certificate and obtain an EIN (employer identification number) from the IRS.

Colorado has specific insurance requirements for small businesses. Although offering health insurance is not required, there are rules as to the type of coverage you must offer if you do offer it. Other insurance that may be required will depend on the type of business you plan to start, but will generally include insurance for vehicles, business liability, workers' compensation, errors and omissions, property insurance and surety bonding. The Colorado Department of Regulatory Agencies' insurance division regulates insurance requirements for particular business types.