How to Register a Colorado Home-Based Business

Forbes magazine ranked the state of Colorado the fourth best state to start a business, in its 2010 annual ranking. If you plan to run a home-based business in Colorado, you must do several things to get started, including obtaining a business license for your industry, if required, and registering the business name. Business licensing is done at the state level for certain industries, while registering the business name is done through the Colorado Secretary of State's office. In most cases you can complete both online, facilitating compliance.

Set up a business structure, whether sole proprietorship, limited liability company or corporation. Many home-based businesses choose sole proprietorship because it is easy to set up. A limited liability company is a viable option, offering the structure of a sole proprietorship or partnership, but with some of the protections of a corporation, such as limited liability. (A business owner only puts his business assets at risk.) Corporations are time-consuming and expensive to start, but if the intent is to eventually move your business to a permanent location, forming the corporation now is an option.

Research your desired business name. Your business name is your first contact with potential customers, so choose wisely. The name should reflect either the nature of the business, or if you are an expert in your field, tie in with your name. To ensure your desired business name is available in the state of Colorado, check the business name search engine on the Colorado Secretary of State's website. Choose a minimum of two names, just in case your first choice is already taken.

Register the business name with the Colorado Secretary of State's office and file any required documents. To form a partnership, LLC or corporation, click "File a Business Document" on the secretary of state's homepage. On the next page, select "Form a New" on the left-hand side of the page. On the next page, enter your business name, and include the suffix for the business such as "LLC," "Ltd." or "Inc." Click "Search" and provide the requested information, including any attachments. If you are starting a sole proprietorship, instead of filing a document, you reserve the business name. From the homepage, under the "Reserve a ..." heading, select "Name." At the next window, provide the business name, then click "Search." Enter the business information to reserve the name and allow the state to recognize the business entity.

Apply for the appropriate business license. Home-based businesses with less than $1,000 in sales do not need a sales license, but if the business is a full-time occupation, obtain a sales tax license from your local government office. Depending on the industry, an industry-specific license is required. Search the Occupational/Industry License Database on the secretary of state's website. Simply choose your industry from the drop-down menu. Required licenses and contact information for that industry's licensing agency are listed.

Tips & Warnings

Contact the local Small Business Development Center in your area for startup advice and assistance. SBDCs are usually located in community centers and college campuses.

To file Articles of Orgainzation for an LLC or Articles of Incorporation for a corporation, you must pay fees of $50 and $150, respectively, according to the secretary of state's office, as of December 2010.

If you are planning to start a business in the future, reserve your name early, especially if it is a common name. Otherwise, you risk losing your desired name.

Check with your local municipality for home-based business zoning regulations.