Starting a business in Colorado takes time and there are many steps involved. You need to have a lot of patience, because you’ll have to go through numerous steps before you can fully launch your Colorado startup.
Incorporating in Colorado, is the first step to ensure that you and your business are protected from liabilities. If your business is about to complete the incorporation process, or your business is already incorporated, there are 5 more important things that you need to do before you should start operating.
One of the most important requirements that you include in your top list of things to comply is the Employer Identification Number. Contrary to the belief that you only need to have an EIN when you hire employees, it is actually a highly essential requirement that can affect your business’ numerous transactions.
Without an EIN, your business will not be able to open a business bank account, file for tax returns and hire employees. The Internal Revenue Service imposes strict penalties for businesses who continue to operate without obtaining an EIN. It is essential to have one, because it is the only way the IRS can track your business activities and state taxes.
After you’ve obtained an EIN, you can proceed by opening a business bank account. There are three reasons why you need to have one: to build your business as an independent and separate entity before the state of Colorado, receive checks and payments under your official business name and to separate your personal and business finances for your own good.
While you’re in the process of opening a bank account for your business, you may want to think of applying for a credit card so you can build your company’s credit history.
In order to legally operate your small business, you have to get necessary permits and licenses. There are a variety of licenses and permits that you need to obtain depending on the type of business you’re running. It would be best to visit your local county office or city hall and seek counsel.
If you are not able to apply for licenses and permits, you will not be allowed to launch your business – you may even be fined or sanctioned heavily. To avoid this, inquire ahead of time and slowly process this requirement.
To give you a clear perspective and help you understand tax regulations and laws better, it would be best if you meet and consult with a tax advisor. Choose a tax consultant that has many years of experience in the industry, someone who has handled the kind of business you’re running and someone who has an impressive record of giving the best advices.
In this way, you’re aware of your responsibilities as a business owner. You might also want to ask for assistance during tax period, it’s one of the most crucial times of the year.
Forming a Colorado startup doesn’t just end with the above stated requirements, complying and applying for more requirements and pertinent documents and submitting reports is part of doing business for as long as your company is existing.
It’s very important that you stay compliant if you want to maintain your business’s good standing and keep your liability protection.
I’m sure that learning how to incorporate in Colorado and going through the process was a bit complicated if you have never done them before. However, the above requirements are fairly easy to obtain, you can even learn and do them yourself. These requirements are governed by different agencies and departments in your local county or city hall, all you need to do is ask for assistance from the appropriate offices and they’ll be more than willing to help you.
Once you are able to complete all these requirements, you are now ready to start your business operations, don’t forget to comply with annual requirements and reports so that your business doesn’t get in trouble. Please also note that this article is in no way legal advice. Good luck!