Start a Business in Colorado

STEPS TO STARTING A BUSINESS

While we recommend hiring a professional like us to incorporate your Colorado business, you can go it alone and file all the paperwork yourself. Whatever avenue you choose, there are a few key decisions to make and steps to take to turn your idea into a business.

1. Choose a Business Structure
   The three most popular business structures are the limited liability company (LLC), corporation, and sole proprietorship. Sole proprietorships are easy to set up, but they offer the owner zero liability protection, and as business formation gurus, we really don’t recommend them if you value protecting your assets from lawsuits and potential bankruptcies.
   Why start a Colorado LLC?
   LLCs tend to be easier and more straightforward to manage with fewer moving parts compared to a corporation. LLCs also offer pass-through taxation, which means the LLC owner or owners don’t get hit with dreaded double-taxation. LLCs are perfect for the small business owner who doesn’t need to raise capital through sales of stock.
   What are the benefits of a Colorado corporation?
   Corporations come with built-in prestige, the ease of raising capital, and a hundred years of legal precedents that inform corporate behavior. If you plan to grow your company into a behemoth, the corporate structure may just suit your needs.
2. Pick a Name for Your Business
   Picking a name for your business is a bit more involved than it sounds. You’re not naming a pet goldfish, but rather a legal entity. Your business name needs to include an identifier such as LLC for a limited liability company or Inc. if you’re forming a corporation (example: Lisa’s Pies & Fries, LLC, or for a corporation, Snowboards, Inc). You’ll also need to choose a name that isn’t already in use in Colorado. You can check your preferred business name at Colorado Secretary of State’s Name Availability Search.
3. Assign a Colorado Registered Agent
   Every business is required by state law to appoint and maintain a Colorado registered agent. If your business is ever sued, or if the Secretary of State has to send an official notification to your company, your registered agent will be contacted. If you hire us to act as your Colorado registered agent, we will accept all such documents on behalf of your business and upload those documents into your Client Portal the same day they arrive in our office. We notify you immediately that your documents are ready to view.
   Can I be my own registered agent in Colorado?
   Many business owners act as their own registered agents. If you choose that route you’ll be giving your private information, namely your address, to the state, which means anyone can find it. Unless you enjoy late night sales calls, junk mail, or people trying to scam you, we’d recommend hiring a professional registered agent like us. When you hire us we’ll gladly let you use our professional business address on all your state filings.
4. File Formation Documents with the Colorado Secretary of State
   To officially form your Colorado LLC or corporation, you’ll need to file formation documents with Colorado’s Secretary of State. You can only file online at the Secretary of State’s website. LLCs file Articles of Organization, and corporations file Articles of Incorporation. Both documents come with a $50 filing fee. Filing your Articles of Organization or Incorporation is what makes your business legal in the eyes of the state.
   Can you file my formation docs for me?
   Or course—that’s what we do. This step is very important, all your paperwork must be filled out properly, with the correct addresses and contact information. Want someone to help you out? We’ve got your back. Plus, when you hire Colorado Registered Agent to file your formation documents, you can use our address, and keep your address private. We help customers form businesses every day, so for us, this is like skiing the bunny slope.
5. Draft an Operating Agreement or Corporate Bylaws
   An LLC is governed by its Operating Agreement, while a corporation is governed by its Corporate Bylaws. Think of these documents as the constitution of your business that helps define your business going forward. While you don’t file your Operating Agreement or Corporate Bylaws with the state, it is important that these documents address who owns what, who does what, and what the overall goals and rules of the business will be. A business without a well defined constitution may find it difficult to mediate potential disputes that arise between management, ownership, or in the case of corporations, shareholders and the board of directors.
   How do I write bylaws or an operating agreement?
   At Colorado Registered Agent, we have a lot of experience when it comes to setting businesses up for success, and if you hire us, we’ll take the guess work out of writing your Operating Agreement or Corporate Bylaws. With service signup, we provide a free general operating agreement or bylaws, which you can modify to fit your business needs.
6. Obtain Your Federal Employer Identification Number (EIN)
   Once you’ve formally registered your business with Colorado, you’ll need to apply for a Federal Tax ID from the IRS. Known as an EIN or employer identification number, he IRS uses this number to identify your business for tax purposes. A majority of banks will want to see your EIN before you open a business bank account. You can apply for an EIN on the IRS website for free, or add EIN service for a one time $50 fee when you hire us to form your Colorado LLC or corporation.
7. Open a Company Bank Account
   Your bank account is important for a few reasons. The first reason is that for practical and legal reasons, you want to keep your money and assets separate from those of your business. Second, your business needs to be able to accept money from customers. A bank account allows you to directly link credit card or online payment options, and gives you a safe and secure place to deposit cash. Third, you need to pay yourself, employees, and suppliers. Having a business bank account allows you to do all three, and build a relationship with the bank, that may help your business in the long run if you choose to expand operations.
   How do I open a company bank account?
   Opening a business bank account is easy once you’ve picked your bank. Simply go online or to a local branch to begin the process. Most banks will want to see any number of legal documents proving you your business is who you say it is.
   Be prepared to offer up:
   Employer Identification Number
   Articles of Organization/Incorporation
   Operating Agreement or Corporate Bylaws
   Business license if applicableWe think it’s best to call around to local banks and ask them what documentation they require. Once you’ve set up your account, your business is ready to accept payments from customers.
8. Obtain Licenses and Permits for Your Business
   Not every Colorado business will need to get special licenses or permits in order to operate, but if you plan to ply a trade or craft that finds you interacting with customers, such as a barber shop, food truck, law office, yoga studio, physical therapist, and other pursuits, you’ll need to look into getting your paperwork in order. Businesses that fail to obtain proper licensing or permits can be subjected to fines or outright closure of the business, and nobody wants that. The best course of action is to contact your local city hall or county clerk’s office in order to get more information regarding necessary business licenses or permits.