How to Get a Colorado Business License

Do you need a business license in Colorado?

There’s a lot of paperwork to sort through as you’re forming your company, and some of it can be conflicting. If you’re here, you’re likely wondering, “Do I need a business license in Colorado?” Well, that depends on the kind of business you operate and in which county or city. Here’s a breakdown of the potential licenses required at the local, state, and federal levels.

Colorado state

Colorado does not require a general business license at the state level. Instead, the state defers to local jurisdictions, which may or may not require a general license to operate in that county or city.

However, there are some industries and types of companies that are regulated at the state level—and these often require specific licenses or permits to operate anywhere in Colorado.

The Colorado Department of Regulatory Agencies (DORA) oversees registration and licensing for multiple businesses and professions in the state. Examples of the types of companies or professionals that might need to obtain a state license include real estate brokers, healthcare service providers, life care institutions, electrical engineers, banks and other financial institutions, cosmetologists, and more.

DORA does not oversee the marijuana industry, however. All dispensary businesses must apply for a state business license through the Colorado Department of Revenue’s Marijuana Enforcement Division as well as a local license through the jurisdiction in which they’d like to operate.

In addition to industry-specific licenses, some Colorado businesses may need to obtain permits. For instance, if you own a moving company or an off-road vehicle tourism company, you’ll likely have to get a permit through the Colorado Public Utilities Commission, or if you want to open a bar, you’ll have to get a liquor license through the Colorado Department of Revenue.

Local

Aside from any state-level occupational licenses required by your industry, the primary factor in determining what type of business license you need is the local area where you conduct business in Colorado. That’s because counties and cities set their own rules regarding licenses and permits. 

Contact your local city or county government agency for more information about licenses and permits that may be required before operating your business. For example, if you plan on running a small company from home, you may need a home occupation permit. Or if you want to open a dispensary, you’ll need to first make sure that your local jurisdiction is accepting new medical or retail marijuana licenses, then obtain a license from the relevant agency. 

Many agencies, such as Denver’s business licensing center, offer online license directories to make the license requirements search easy.

Federal

Not all Colorado companies will need to apply for a federal license, but those that do may include companies in the agricultural, aviation, fish and wildlife, mining and drilling, and firearms industries (among others). 

How to get a business license in Colorado in 5 steps

Follow these steps to get your business ready for operations:

Step 1: Form your business

First things first: You’ll need to form your business before applying for a license. Here is the general process for forming a company: 

• Write a business plan. A business plan is useful for defining your goals, identifying issues early on, and getting all stakeholders on the same page.
• Choose a name for your company. Try using LegalZoom’s free business name generator for inspiration.
• Decide how to structure your business. You might choose a sole proprietorship, limited liability company (LLC), corporation, or partnership.
• Register your new business. The business registration process involves filing the necessary documents online with the Colorado Secretary of State. You can also file using LegalZoom’s business formation services.

Step 2: Obtain an EIN

If you’re planning on hiring employees or are structuring your company as a corporation or a partnership, you must get an employer identification number (EIN). Additionally, some business licenses might ask for an EIN on application paperwork, so it might be in your best interest to one one regardless of your business structure.

You can apply for an EIN online through the Internal Revenue Service’s website, or let LegalZoom file the application for you with our EIN service.

Step 3: Apply for a state license

Remember that there is no statewide general business license requirement for Colorado; all state licenses and permits are based on the nature of your company or the industry. That means that you’ll apply for a license through the applicable agency’s online portal, whether that’s DORA, the Colorado Department of Health and Environment, the Colorado Public Utilities Commission, or other various state agencies.

Conduct an internet search for your profession or industry to understand if you’ll need an occupational-based license to do business in Colorado. For help with your Colorado business license search, DORA has a database that lists professions and provides links to apply, verify, or renew licenses. 

Step 4: Get any necessary local licenses or permits

Once you have secured an industry-specific business license, check with your local city and county regulatory agencies to determine if you need any local licenses or permits. Conducting business in multiple jurisdictions will likely require multiple licenses or permits, so make sure to contact all relevant agencies for information about which licenses may be needed, what forms to submit, and the fees involved.

Step 5: Request a federal license or permit

Finally, visit the U.S. Small Business Administration’s federal business license and permit directory to determine if the nature of your company or the industry in which it operates requires a federal license or permit. For instance, if your company imports or exports certain agricultural products across Colorado state lines, you’ll need to apply for a permit with the U.S. Department of Agriculture. The Small Business Administration’s directory provides links to the relevant federal regulatory agencies.

After getting your Colorado business license

There are a few things you still need to do to help ensure that you’re compliant with local, state, and federal regulations. 

First, check if your business license needs to be displayed where the company operates. Many types of licenses and permits—like liquor licenses, medical professional licenses, and more—are required to be displayed in a conspicuous location.

Second, keep your new venture in compliance by renewing your license at the appropriate time. This time frame may vary by industry, profession, and jurisdiction, but generally, a business license is up for renewal annually and typically incurs a renewal fee. Additionally, if your company’s location, name, or other important details change, make sure to update that information on your license, which can typically be done through the relevant agency’s online portal.

Getting a CO business license the easy way

If you’re still stuck on where to start when it comes to business licenses, why not use a comprehensive service that does the hard work for you? With LegalZoom’s business license service, you’ll receive a detailed report on all of the necessary federal, state, or local licenses your company needs in Colorado, plus direct access to applications. This reliable option not only removes stress but also fast-tracks the business license process—so you can start operating your company in no time.

FAQs

What should I do before getting a business license?

Before getting a business license in Colorado, you’ll need to register your company with the Colorado Secretary of State. And before registration, you’ll need a unique, distinguishable business name. Refer to our guide on how to conduct a Colorado business search to ensure that your desired name isn’t already taken by other companies registered in the state.

How much is a business license in Colorado?

The cost of a business license in Colorado depends on the type of license, the industry, and the jurisdiction. Some fees may be as low as $25, while others, like liquor licenses, could be $1,000 or more. 

How long does it take to get a business license in Colorado?

The time it takes to get a business license in Colorado, from application to issuance, varies depending on the type of license and the issuing agency. Some may take a few days, while others may take a few weeks. Many local and state agencies offer the ability to view the status of an application through an online licensing portal.

Is a CO business license the same as a sales tax license? 

While often confused with a business license, Colorado sales tax licenses are intended for companies that sell or lease retail products to consumers. So, whether you own an online e-commerce retailer, a small boutique in town, or an events rental company, you’ll need to apply for a state sales tax license through the Colorado Department of Revenue.

It’s also important to note that many cities and counties in Colorado are considered “home rule” jurisdictions, meaning that they can levy and collect local taxes directly from certain businesses. If you want to operate a company that sells or rents retail goods in a home-rule jurisdiction, you’ll need to contact the relevant local agency to obtain a sales tax license (in addition to the Colorado state-issued tax license). 

Does an LLC need a business license in Colorado? 

LLCs, or limited liability companies, don’t necessarily need a business license in Colorado because having one depends on the location of the company and the industry in which it operates. If you’ve registered an LLC in Colorado, check with your local government agencies and DORA to see if your business needs a license or permit.