Colorado Business License: Everything You Need to Know
The state of Colorado does not have a generic or general license nor does it have a state business license.14 min read
How to find a good lawyer can be a pivotal safeguard in ensuring legal issues don’t spiral into legal problems. If you are engaged in virtually any type of business activity, whether doing so as an incorporated entity or as an independent professional, be proactive and anticipate the reality that sooner or later, legal matters and litigation may arise. You should already have a good legal advocate on your speed dial because, when a crisis strikes, that’s a bad time to be wasting valuable resources finding a good lawyer.
How to Find An Excellent Lawyer
Most attorneys are specialists in different realms of law. Some specialize in criminal law, some in land-use law, some in various aspects of business law. There are lawyers who exclusively deal with environmental regulations, probate law, divorce law, patent law. There are as many legal specialties as there are laws. So, first make sure you know what type of attorney will best serve your legal needs.
Where Should I Start to Look for a Lawyer?
Begin your search at your State Bar Association’s website. Search for attorneys who are practitioners in the specific realm of law that you need help in. Zero in on any who may be experts in the subcategory that most closely represents your issue. Conduct preliminary Internet searches on each of the potential candidates by ensuring they are in good standing with the state Bar and by reading into any contact they may have had in the media, just to get an idea of what he or she may be like.
Also, ask around. Get references from friends and associates. While every legal issue is different and there is no one-size-fits-all attorney for all everyone all the time, a lawyer with a track record of success, as well as the respect of local court officials and colleagues, could be a powerful advocate in mitigating your legal issue.
As with personal references, it could prove beneficial to query other businesses or independent professionals, particularly those in the same field as you, about advice on finding a good attorney best suited to remedy your legal issues or, better yet, a lawyer who could anticipate potential problems and deal with them before they arise.
You could also solicit input from businesses that your business does business with, such as accountants, Realtors, insurance agencies and your banking contacts. They may not know the specifics of your issues, but chances are they know who the best and most active attorneys and law firms are and can, at least, point you in the right direction.
Are Advertisements A Good Place To Look For A Lawyer?
Attorneys and law firms in the United States were not legally permitted to advertise their services until 40 years ago. The 1977 U.S. Supreme Court ruling in Bates v. State Bar of Arizona gave lawyers the right to advertise like any other professional, although each state Bar Association places ethics restrictions on how members in their state should advertise.
Ironically, among attorney groups that lobbied against allowing legal advertising were those representing personal injury lawyers, the same specialists who now aggressively advertise their services on television and roadside billboards.
Advertisements offer some benefit to those seeking legal help. Newspaper, phone listing, radio, TV, and website advertisements, including on Facebook and other social media, together with junk mail, could make you aware of the names of legal professionals who are soliciting business and would likely be responsive if you reach out to them.
But, overall, don’t trust advertisements because, as many attorneys will tell you, lawyers who do the most advertising need the most clients and why is that? The bottom line is the most discerning and effective attorneys rarely advertise because they don’t have to. The best attorneys provide legal services to constituencies that aren’t Google-searching or scanning the yellow pages for help in a legal crisis because, by already consulting or hiring an attorney, they don’t get embroiled in legal crises in the first place.
Legal Group Plans
An emerging option for small businesses and independent professions is what is called “Legal Group Plans,” a sort of “legal insurance” that is increasingly being offered by some franchise distributors, labor and credit unions, professional associations and trade groups. California, for instance, has a well-established Group Legal Services Insurance Plan.
These plans, like health insurance, lower costs when a large number of businesses and individuals opt into the service, paying relatively small amounts out-of-pocket contributions on a regular basis for access to free or subsidized legal services that include consultations, preparing standard legal documents, and litigation representation if necessary. They operate in a similar fashion as medical insurance plans which means your contributions are pooled into a fund that everyone can tap into when necessary.
There are also legal assistance programs that offer prorated or even free legal services to those in need. They can generally be found in the phone book listed under “legal advice,” “legal aid,” or “legal clinics.” These subsidized legal services generally come with specific requirements for eligibility, often based on residency, income and the nature of the legal issue.
Websites, such as UpCounsel.com, can provide information and access to local law firms and individual attorneys, as well as specialists on a state and national scale. Depending on where you live or do business, and what kind of legal issue you are concerned with, these online directories can be gateways in presenting your questions to multiple attorneys which, in turn, could lead to further engagement either via an email reply, a phone call, or by making an appointment for an in-office consultation.
Upcounsel.com provides a comprehensive directory of attorneys who are practitioners in distinct fields of business law, including such specialties as small business law in specific states and a local patent lawyer who is recognized by the United States Patent & Trade Office to represent prospective inventors.
The directory features profiles on individual attorneys that outline his or her experience, education backgrounds as well as a general outline of fees. UpCounsel has verified that any attorney listed on its site has been endorsed their state Bar associations with a “Good Standing” rating.
Identify Needs and Do Research
If you are employed by a company represented by a law firm or has an in-house attorney, it is certainly a good idea to query these legal advisers about their proficiencies in whatever issue you are concerned with. Keep in mind that they may not have these skills, so don’t settle for a general practitioner in corporate, business or labor laws because he or she is someone you may be familiar with and deal with on a range of other matters.
Preliminary Consultation Questions & Answers
After researching potential candidates to handle your case, hopefully you will have a listing of about four or five qualified. Call their offices. If they are taking new clients, make an appointment for an interview.
The standard advice in hiring any attorney is to view them the same as you would evaluate surgeons before an operation on a child or loved one. Your case is your baby, so to speak, and your attorney is going to be paid a lot of money to deliver it, or deliver you from it. Ensure as best you can that the prospective attorney has a good track record and has not been accused of failing to practice due diligence on behalf of clients.
Just remember that an attorney is like any other professional or trades practitioner that you hire to perform a service for you. Essentially, this is a job interview for them. For you, a preliminary interview or consultation is the real test of whether you have a case or someone else has a case against you.
If the attorney believes your allegations have enough merit to investigate, that in itself is a validation that you have a case. On the other hand, If the attorney determines that you or your business may, indeed, be in trouble with the government or a litigant, heed his or her advice and either hire them or quickly hire another lawyer.
If you don’t like what you hear from one attorney, try another. Always get at least a second opinion. If a lawyer declines to accept your case or you as a client, keep trying until one does. There are many reasons why an attorney will decline a case that have nothing to do with the validity of the claims or the nature of the client.
When coming to a preliminary consultation with an attorney, ensure you have all the relevant information regarding your prospective case so he or she can ask all the right questions about the legal issue you are concerned with.
You should also come prepared with a list of questions to ask the attorney. Among them: How many cases like yours have they handled? How long will it take to get the issue resolved? How, exactly, will the legal process start and what is next?
Ask how they will bill you. By the hour? By the job? It is important to clarify up front how billing works should the process appear to be a time-consuming affair or should circumstances change, requiring more time than initially envisioned.
Leave your initial interviews with each attorney with a preliminary bid on how much they will charge and how much they will do. Ensure they explain the boundaries of your prospective relationship and outline what the expectations for success are.
Solicit Referrals From Former Clients
Among the best ways to hire a good lawyer to represent you is to ask for a list of former clients before leaving your preliminary consultation. After all, there is no better referral than an endorsement for a former client.
Independent Attorney vs. Large Firm
There are benefits to working with an independent practitioner who, generally, views you and your case as a primary focus at reasonable fees. They tend to be more accessible and adaptable to changing circumstances. To many, representing clients is a personal commitment because, literally, their success is dependent on their clients’ success.
A large law firm also offers many benefits, namely its resources and stable of on-site expertise in a wide range of specialties. While a full-service law firm has more heft, they can be very expensive. And, as some independent patent lawyers will warn, there is a good chance you and your case will not be handled by a veteran attorney but by a new-hire learning the ropes.
You Are the Expert
Attorneys may be experts in their realm of law, but you are the expert in your business and it is your vision that is driving the entire engagement. If an attorney has agreed to work for you, he or she has “signed on” as believers in you, your business and in resolving the legal issue you have been confronted with.
So, it is important to understand that lawyers can only do their job if you do yours. They are only as good as the information you provide them. Make sure they understand your case and your business and ensure that you read, and understand, everything they have documented on your behalf.
Just as your attorney is obligated to become an expert in your business, it would benefit you to learn as much as possible about the case itself and all the applicable laws and regulations that are involved. By self-educating yourself on the process, you can ask your attorney the right questions, which can save him or her time, and you, money.
If you need help determining how to proceed in submitting a patent application, you can post your legal needs on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.n
What Is a Colorado Business License?
In Colorado, certain businesses must maintain a Colorado business license, which authorizes them to operate certain types of businesses in the state of Colorado.
Colorado Business: Colorado Tax Registration
If you're starting a new business in Colorado, you are required to register for taxes regarding your businesses products or services. Depending on the services your businesses provide, additional taxes may also be assessed, including the following: a liquor excise tax, a tax on cigarettes and tobacco, a severance tax, and a fuel excise tax.
Colorado Business: Business Licenses
Additionally, Colorado based businesses are required to obtain permits or licenses associated with the services offered. Obviously, the cost of the permit and the conditions involved in each individual permit or license are different, depending on the circumstances. Here are some examples of state permits and licenses: beer and wine licenses; plumbing permits; and bingo licenses and raffle licenses.
The state of Colorado does not have a generic or general license nor does it have a state business license. Instead licenses are occupation specific. One can apply for a license for different state agencies depending on the type of business, profession, or activity.
The relevant agency will monitor and regulate the appropriate license. Each agency has different requirements for their license or permit, specific to the needs and circumstances of the license. Sometimes the licensing is referred to as a sales or user tax license.
Colorado Business: Local Permits
Local governments, including cities and counties, may require additional specific perk permits and/or licenses. Each municipality may have their own unique regulations, specific to the location. Some of the most common licenses, but not the only licenses in Colorado, include the following:
- Alarm permit
- Building permit
- Health permits
- Business licenses
- Tax permits
- Occupational permits
- Signage permit
- Zoning permits
Colorado Business Resources: Incorporation Filing
Non-profits, partnerships, corporations, and limited liability companies are required to register with the Colorado Secretary of State. Sole proprietorships, on the other hand, are not required to register in the state of Colorado. This is because in sole proprietorships, all profits are considered the income of the proprietor of the business. However, owners of sole proprietorships are liable for the debts of the businesses.
Essential Business Records
Different states have different requirements for maintaining business records. In Colorado, employers are required to maintain and track the following employment records for a minimum of four years:
- Employee identification number
- Employees full name
- Employee contact information
- Employee Social Security number
- Copies of tax withholding allowance certificates
- Pension payments data
W-2 and W-4 Forms
Certain rules apply to employers in all states. Employers are required to ensure that employees return the completed form W-4, which is a withholding exemption certificate. Upon receipt, employers must mail the forms to the IRS to be officially filed. Additionally, employers in Colorado have to send Social Security Administration a form W-2. A W-2 form contains information about the withheld taxes as well as the wages that are paid to employees. These documents must be submitted by the end of February of each year.
Employee Eligibility Verification Form I-9
When employers hire new employees in the state of Colorado, the employer should have the employee complete a form I-9. This form must be completed and returned to the employer within three days of employment. The form I-9 establishes each employee is eligible to work. It is an employer's responsibility to maintain a copy of employees’ I-9 form to avoid complications in the future.
New Hire Reporting
Whether an employee is a new employee or is an employee returning to work, this new employment needs to be reported. Employers should contact the Colorado State Directory of New Hires. This report should be filed with the Colorado State Director New Hires within 20 days of the date of the employee is hired or rehired. This responsibility is borne by the employer, not the employee. Employers should include the employees’ name, address, Social Security number, the employers’ payroll address, and the employer’s federal identification number.
Employers that maintain employees must pay Colorado unemployment taxes. Employers are also required to pay into the workers compensation fund via a tax. In Colorado, unemployment insurance provides money to people who are unemployed through no fault of their own based on the circumstances. Worker’s compensation is designed to compensate workers for injuries suffered while on the job.
Applying for a Business License in the State of Colorado
As a preliminary matter, it is important to note that not every business requires a license. Instead in Colorado, as well as in certain cities within the state of Colorado, only specific businesses are required to maintain a license. Contractors who need a license should visit the Community Planning and Development website for city of Denver. Alternatively, they may visit the state of Colorado website for state business licensing requirements. A generic or non-specific business license is not required by the state of Colorado. Instead, different state agencies issue different types of licenses for businesses, professions, and certain activities. In addition to the occupational license database, the Department of Regulatory Agencies, DORA, provides links to information about an assortment of specialized licenses for various industries and professions. Limited liability corporations, nonprofit corporations, and for-profit corporations are also required to register the business structure with the Secretary of State in Colorado.
Starting a Business: Frequently Asked Questions
As a preliminary matter, the Colorado Business Resource book provides general information about starting a business in Colorado. The guide includes licensing information for individual businesses as well as specific forms that a new business may need to file.
- How Do I Know If My Planned Business Name Is Already Being Used?
You can check with the Secretary of State's website in the state of Colorado to determine whether someone else is already using a business name. Limited Liability Companies, corporations, general partnerships, and sole proprietorships all register the required documents with the Secretary of State. However, registering a tradename with the Secretary of State does not grant exclusive rights to that name. Tradenames are not legally protected in the state of Colorado. Consequently, you can use any business name you wish, even if another business is already using the same name. However, businesses are costing the wisdom of operating under the same name as a business.
- How Do I Apply for a State Tax Identification Number?
Businesses apply for a state tax identification number in the state of Colorado by using an online form. This online form is referred to as CR 100 - new employer registration.
- What Is the State Sales Tax in Colorado?
In Colorado, the rate for state sales tax is 2.9 percent. However, the precise rate will be determined by including both the base sales tax rate of 2.9 percent as well as various other rates that apply depending on the location where the sale is completed. There are 71 cities called "home rule cities." These cities require a portion of sales tax on all sales that occur within that jurisdiction.
- How Do I Purchase Worker’s Compensation Insurance?
Worker's Compensation insurance can be bought through private insurance companies within the state of Colorado. Colorado does not maintain a state fund for Worker's Compensation. Instead, the Colorado legislature has created Pinnacol Assurance, a nonprofit insurance carrier to sell Worker's Compensation insurance.
- Are There Grants for Small Businesses in the State of Colorado?
Yes. Small business innovative research grants are generally issued by federal agencies looking for research and development in narrow, precise areas. These areas include biotechnology, as well as military weapons development, and other high-tech fields. SBIR Colorado is a nonprofit organization that will assist you as an entrepreneur, scientist, or researcher, to identify SBIR grant opportunities.
- Where Can I Find Information About the Cost of Living and Quality of Life in the State of Colorado?
The Colorado office of economic development publishes something called the Colorado Data book. This book is basic information regarding the state of Colorado as a whole. There are more than 50 economic development offices in the state of Colorado. Colorado also boasts more than 150 chambers of commerce that provide information on specific locations.
- What General Questions Will Be Asked on the Business License Form?
When you're applying for a business license within the state of Colorado, you can reasonably expect to be asked the following questions:
- What type of business do you have?
- What is your business address?
- What is your business tax ID number or your Social Security number?
- How many employees will you have?
- What is the name of the owner?
- What is the owners address?
- What is the name of the business?
- Is this a home-based business?
The Colorado small business development center also call the SBDC network maintains the clearinghouse of local, state, federal, and educational resources. They also provide free confidential business consulting services. Finally, they offer low-cost and no-cost business training courses and workshops to help you develop your business.
The SBDC network publishes the Colorado business resource book. This complete guide for new businesses provides information on such topics as bookkeeping, legal structure, employer responsibilities, business planning, and taxation issues. SBDC operates an occupational license database. This database allows you to select your industry from a drop-down menu and then links you to an overview of any licensing requirements and contact information for the relevant state licensing agency.
If you need help with your Colorado business license, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.