How to Register a Business in Denver, Colorado?
First decide on your business structure and then submit a registration application in the form prescribed for the category your business falls under.4 min read
Are you wondering how to register a business in Denver, Colorado? To do so, first decide on your business structure and then submit a registration application in the form prescribed for the category your business falls under.
Registering a Business in Colorado
Anyone doing business in the city of Denver must obtain a business license from the city's Department of Licenses and Excise. There are about 90 different forms for applying for a business license in Denver. You must choose a specific form that applies to your business category (tattoo parlor, transportation service, etc.) and provide the required information accordingly.
You can contact the Excise and License Department over the phone or visit the department's office personally if you need any help in choosing the appropriate form for your business. You can download the license application from the City of Denver website or collect it personally from the licensing department's office.
If you are planning to visit the licensing department in person, make sure you take your Colorado driver's license for faster processing. Also, visiting the office between 7:30 and 11:00 a.m. will help you avoid longer queues.
Although different license application forms have different information requirements, most of them collect the following common information about the business and the owner:
- Type of business structure (whether it's a proprietorship, partnership, LLC, LLP, or a corporation.)
- The name and address of your business including mailing and physical addresses.
- Contact numbers of your business.
- Contact information of the owner including their date of birth, home address, and residential phone number.
- A signature verifying that the information provided is true and complete.
Costs of obtaining a business license in Denver depends upon the type of business license you are applying for. In some cases, you may be also required to pay for fingerprinting and background checks.
Steps Involved in Planning a Business in Colorado
Before you start your business in Colorado, you should prepare a business plan.
A good business plan should include the following information, among others:
- A one-page pitch or summary of your business idea, especially from the viewpoint of marketing and funding your venture.
- A USP or a unique selling proposition in the form of a phrase or a short sentence defining your core business mission.
- The target market for your product or service.
- A marketing plan to set out your strategy to reach your target market.
- Your future plan for a certain period of time. For instance, this may state where you plan to take your business in another six months or two years down the road.
Steps in Forming a Business in Colorado
- You must register your business as an official entity if you wish to separate and protect your personal assets from your business.
- Most people form a limited liability company (LLC) in order to receive the benefits of a corporation without being subjected to double taxation or having to deal with cumbersome formalities and compliance associated with a traditional corporation.
- Those looking for a more formal type of structure may opt for an S-corp. This allows you to have a maximum of 100 shareholders and requires forming a board of directors while still letting you include business profits in your personal tax returns.
- C-corps can be formed just like S-corps, but you won't be subjected to the cap of 100 shareholders. However, you'll have to file and pay taxes at the corporate level, thus making the distributed business income subject to double taxation.
- Sole proprietorship is the business structure with the least compliance and formalities. If you do not have any business partners and haven't registered your business, you will be classified as a sole proprietor by default. You need not file any formation document, but at the same time, you will not get any liability protection either. However, you may benefit to some extent by filing a fictitious name or Doing Business As (DBA).
Licensing and Taxation Requirements in Colorado
- Generally, businesses do not require a license in Colorado, but in certain circumstances, you may have to obtain permits, licenses, and tax registrations at local and federal levels.
- You may want to refer to the Internal Revenue Service (IRS) and Small Business Association websites for federal licensing and taxation requirements.
- The Colorado Department of Regulatory Agencies (DORA) provides a list of professions for which you need to obtain state-level licenses. It also directs the readers to the corresponding application page and relevant resources.
- You should contact your local chamber of commerce for local or municipal-level licensing requirements.
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