Companies must have insurance and file tax returns correctly. They may also need to apply for licenses from the state, city, or federal governments.
A business license is an official document governing your company’s business in the state. It is a document that certifies that your company meets state requirements for conducting business. This license allows you to operate in the state legally.
It is difficult to obtain a Colorado business license. There are many steps at both the state and local levels. This can be confusing for entrepreneurs who are not familiar with the process. This guide will show you how to obtain a Colorado business license in just a few simple steps.
Is a Business License Required for a Colorado LLC?
Colorado does not require nor issue a generic statewide business operating license. However, some state regulatory agencies may issue licenses specific to certain types of professions or businesses.
Businesses in all industries subject to sales tax must comply with the only state licensing requirement, sometimes called a “sales tax permit.”
What are the requirements for a Colorado business license?
Colorado counties and cities will require businesses to obtain general business operating licenses. However, each city may have its own rules and restrictions. The city of Aurora requires all businesses within its limits to obtain a business license.
However, Colorado Springs, a former libertarian paradise requires only a limited number of businesses to be licensed, including concrete contractors, bike-sharing, tree services and food trucks, as well as any “sexually oriented” businesses.
To ensure compliance with all laws, we encourage business owners and managers to review the license regulations in each city. Each location must have the correct business licensing, even though they may be in different cities or counties.
Types of business licenses
Practically every Colorado business will require at least one license or permit to legally operate in the state. It can be difficult to determine which licenses you need to operate in your locality or industry.
You will need the appropriate licenses for your business type. You will need to consult your county clerk or city hall for any statewide licenses.
Colorado Business Licenses
A general business operating license is the most important type of license. This license may also be known as a “business license” or “general license”. In Colorado, these licenses are sometimes called “City Sales and Use Tax licenses.”
While some cities and counties require all businesses to have a business license, others only require specific businesses, such as those that deal in alcohol, beer, or marijuana. Contact your local county clerk for a complete list.
Although many cities and counties offer lists online, it is possible to find more information by digging.
Additional local permits
When starting a business in Colorado, additional permits and licenses may be required at the county or city level. You may require an occupancy permit depending on where your business is located. Home-based businesses may also need a home occupation permit.
If there is any construction or renovation, the county planning department might require a building permit. Signage permits may also be required by some municipalities before you can add signs to your business.
Your local health department might have additional requirements if you are providing accommodation or food service. This could be in addition to the statewide license you need for public accommodation or food service.
These permits may not be the same as a business license. Before you start your business, it is advisable to research which permits you might need.
Colorado Statewide Licenses
If you are a Colorado business and plan to sell or lease tangible property, all Colorado businesses must obtain a Colorado sales tax license. Sometimes called a seller’s permits, this license is required. You must register your Colorado-based business to obtain a sales tax license.
The Department of Revenue will need to be contacted if your business is selling liquor or buying wholesale.
If you are regulated by the Department of Regulatory Agencies, you will need a license. DORA’s website will provide more information about the regulations that it regulates. You can also identify if your company must have a license through them.
Federal Permits and Licenses
Most small businesses won’t need any federal permits or licenses. However, if your business is involved in activities that are regulated at the federal level, you might need a federal license. The following are common federal licensing areas for businesses:
- Agriculture
- Serving, distribution, or importing alcohol
- Aviation
- Explosives, ammunition, and firearms
- Wildlife and fish
- Commercial fisheries
- Transport maritime
- Drilling and mining
- Nuclear energy
- Broadcasting on radio and television
- Transport
Steps to Obtaining Your Colorado Business License
Step 1.
The first step to applying for a Colorado company license is to start one. You can find help with starting your business in one of our business guides like starting a business, setting up an LLC, or, if you prefer, a list containing the best LLC service. After establishing your business, ensure you get all your paperwork in order.
- Name of the business
- If you are sole proprietor, an EIN (Employer Identification number) or SSN (Single Owner Number) is required.
- Type of business entity (LLC, partnership or corporation)
- An address for your business and a phone number
- A business plan which includes expected revenue and expenses
- Certificate of insurance (COI), for your business insurance policy
Step 2. Apply for your Colorado business license
After establishing your business and collecting the required information, you will need to apply for any operating licenses that your county or city requires. Some Colorado counties and cities do not require general business licenses. Fill out the forms on the website for your city, or if you reside in an unincorporated area, the county clerk.
Step 3.
To determine if additional licenses are needed for your business, you should also check with the county clerk. Denver, for example, does not require general business licenses but has many specific licenses that can be used by all types of professions and businesses.
Step 4.
If you rent or sell tangible goods in Colorado, your business will need to apply for a sales tax license. To determine if your state-regulated license is required, visit the Department of Regulatory Agencies website.
Step 5.
The federal government does not issue general business operating licenses. However, licenses may be required from specific agencies depending upon your industry. Many industries, such as aviation, agriculture, fishing and alcohol sales, may require permits from federal government.
What is the cost of a Colorado business license?
The cost of a Colorado business operating license is subject to change from one city to the next. Some cities exempt small businesses from paying fees. On the low end, the cost is $15-30 and on the high end, it can be several hundred. Depending on where you live, the renewal fee for a business license must also be paid.
Alternative to a flat fee, you may choose to pay based on your annual income and the number of employees.
Colorado Business License Renewal
Colorado has many agencies that handle business licensing. However, most require licenses to continue to be renewed every two years or annually. If you are unsure, contact the agency that issued your license.
Insights for Successful Business Entities in Colorado
Starting an LLC in Colorado involves several key steps, with the first being a Colorado entity name search to ensure your proposed business name isn’t already taken. Upon securing a unique name, you’ll then create a Colorado LLC operating agreement, outlining the internal operations of the company.
If you’re keen on privacy and you’re prepared to meet legal requirements, you can even be your own registered agent in Colorado. Though the length of time to get an LLC in Colorado varies, typically it takes a few weeks.
Once the LLC is formed, you will need to understand how to obtain an EIN, or Employer Identification Number, from the IRS for tax purposes.
There are several top LLC formation services in Colorado to guide you through this process if necessary. To further streamline the process, the best registered agent services in Colorado are available to handle legal notifications on your behalf.
Next, you’ll need to get a business license in Colorado, which can be obtained from the Secretary of State’s office. The cost to start an LLC in Colorado is relatively affordable, involving a small filing fee.
As time goes by, you may need to know how to close and dissolve a Colorado LLC, this procedures that can be handled by a Colorado registered agent.
Most Frequently Asked Questions
Are LLCs required to get Colorado business licenses?
Although Colorado doesn’t require every business to obtain a license at the state level, many types of businesses need a license. Regardless of the work performed, legal entities such as LLCs still need the proper business licenses. An LLC is not considered a business license.
What is the cost of a Colorado business license?
A Colorado business license may be required by your county or city. It can cost from $15 to several hundred dollars. The fee will vary depending on where you live and what type of business it is.
What types of business licenses are available?
Although the term “business license” may be used to describe an operating license, it is also used to describe permits. These are the most popular types of business licenses:
- A business operating license, sometimes referred to as a business license
- A sales tax license allows businesses to sell products and services.
- If your business sells, distributes, or trades in alcohol, you will need a liquor license
- Licenses for specialties, such as plumbing, accounting, massage therapy or legal counsel, are available.
To sell online, do I need a Colorado business license?
The government sees it as a physical business even though your online operations are conducted from a physical location. Colorado business licenses still apply if your business is located in Colorado. Your business is still being regulated and managed by the county or city where you are located.
What is a sales-tax license?
Any business that rents or sells tangible goods in Colorado must have a sales tax license. This license allows businesses the ability to sell goods and services in-store or online, and collect the applicable sales tax on any taxable items. Although often called a business license or a sales tax license, it can also be used separately from other types licenses.
Most Frequently Asked Questions
Are LLCs required to get California business licenses?
Although California doesn’t require all businesses to have a business license in the state, many types of businesses must be licensed at the local level. An LLC is a type or legal entity. However, depending on the work performed, they will need to be licensed. An LLC is not a license for business.
What is the cost of a California business license?
California business licenses can be expensive, costing anywhere from $15 to several hundred dollars. You may also have to pay a percentage of your annual income. The fee can vary widely depending on where you live and what type of business it is.
What types of business licenses are available?
While a business license can only be used for a single operating license, it is also often used to refer t o a variety of permits. These are the most popular types of business licenses:
- A business operating license, sometimes referred to as a business license
- A seller’s permit allows businesses to sell products and services.
- A Doing Business As (DBA), allows your business to be operated under a different name than what it was legally registered.
- If your business sells, distributes, or trades in alcohol, you will need a liquor license
- Licenses for specialties, such as plumbing, accounting, massage therapy or legal counsel, are available.
To sell online, do I need a California business license?
Your business can be conducted online, but it still needs to exist in a physical place. If you are operating your business in California, you will need to obtain the required California business licenses.
Is it possible to run a business in the absence of registering it?
Instead of creating a corporation or LLC, you can operate a business as a sole proprietorship or general partnership. Sole proprietorships or partnerships will still need to register DBAs with government agencies and get business licenses.
