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STARTING AND OPERATING A BUSINESS IN COLORADO Copyright © 2000, Michael D. Jenkins
CONTENTS OF THIS SECTION:
I. INTRODUCTION I. INTRODUCTION Colorado has a fairly typical tax and legal structure under which businesses must operate. It is also notable for a very pro-business climate in which entrepreneurs can and do thrive. For example, the state of Colorado has set up a one-stop Business Assistance Center (a joint effort of the Office of Business Development, the Office of Regulatory Reform, and the Department of Revenue) where your new or small business can get information and help in getting licenses, permits, and complying with various state tax and regulatory requirements. Like most states, Colorado imposes income taxes on both individuals and corporations, a sales and use tax, and various excise taxes, with property taxes imposed at the local level. There is no corporate franchise tax. The state has also adopted a limited liability company (LLC) law and a limited liability partnership (LLP) law, so that businesses operating in Colorado in LLC or LLP form may obtain the advantages of limited liability, without incorporating or becoming subject to corporate taxation, generally. At present, the state's economy is very robust and growing rapidly, in terms of the level of unemployment and other economic measures. For example, in January, 2000, the state's unemployment rate was only 2.6%, down from 3.2% one year earlier, and considerably lower than the national unemployment rate of 4.0%. To view the latest federal Bureau of Labor Statistics unemployment rate data for Colorado or any other state, visit the BLS website. II. LEGAL ENTITIES -- FILING FEES AND REPORTING REQUIREMENTS. (a) In General. A business that operates in Colorado can operate as a sole proprietorship, a general or limited partnership, a corporation, or a limited liability company. In addition, like the federal tax law, the state income tax law also recognizes S corporations, for income tax purposes, and generally allows the income or losses of an S corporation to "flow through" and be taxed or deducted at the shareholder level, rather than taxing the corporation itself as an entity. Colorado also provides for limited liability partnerships (LLPs), in which no partner is liable for debts of the partnership, in general, as in the case of a corporation or LLC, but with fewer legal formalities than are required for either a corporation or an LLC. Any general or limited partnership can become a "registered limited liability partnership" or a "registered limited liability limited partnership" by simply filing a registration form with the secretary of state. Note that the LLP law gives much less protection to partners in an LLP than state law grants to stockholders of a corporation, or members of an LLC. An LLP shields a partner in an LLP from tort liability from claims brought against another partner in the LLP or employee of the LLP for malpractice or other such wrongdoing, but it does not offer a partner any liability protection from his or her own acts or omissions, or those of an employee or other partner who is acting under his or her direction. Each of the above entities is discussed below, along with the basic requirements for forming such an entity and any general ongoing (non-tax) reporting requirements that are applicable to it. The tax treatment of each form of legal entity is discussed in Section IV below. (b) Sole Proprietorships. In general, sole proprietorships in Colorado can be formed with no formalities. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, as well. You may also want to pay a visit to the Small Business Assistance Center, which provides one-stop services and federal, state and local licensing information. See Section VI(a) for the address of the Small Business Assistance Center. No separate tax form filing is required, generally, for a sole proprietorship, under the Colorado income tax law. Instead, as with the Schedule C on your federal Form 1040, you simply report the net income or loss from your sole proprietorship on your state personal income tax return. See Section IV(c) for information on the Colorado income tax and filing requirements for individuals. As a sole proprietor, if you have no employees, you are not required to pay any unemployment taxes, withhold any federal or state income tax from wages, nor obtain workers' compensation coverage for yourself. (c) Partnerships. As a rule, general partnerships in Colorado can be formed with no formalities, although it is highly advisable to have a written partnership agreement. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, for any type of partnership, including general or limited partnerships, or limited liability partnerships. A limited partnership, in which there is at least one general partner (who is liable for partnership debts) and at least one limited partner (who is not liable for partnership debts), may also be formed under Colorado law. Unlike a general partnership, a limited partnership must generally have a written partnership agreement, and must file a certificate of limited partnership with the secretary of state's office, along with a filing fee of $50. For information on limited partnership filing requirements, see the contact information for the offices of the Colorado Secretary of State, listed in Section VI(a). Limited liability partnerships (LLPs) are a new form of partnership permitted under the laws of Colorado. Like an LLC, an LLP provides limited liability for its owners, while retaining the tax advantages of a partnership for federal and Colorado state income tax purposes. However, unlike an LLC, an LLP typically operates like a regular partnership, and is not required to file articles of organization. To form an LLP in Colorado, you must file a registration form with the secretary of state, electing to become an LLP, and pay the applicable filing fee of $50. Foreign LLPs, those created under the laws of another state, must register with the secretary of state and pay a $75 filing fee. Every LLP doing business in Colorado, including both domestic and foreign LLPs, must file a biennial report and pay a fee within 60 days after the secretary of state mails the report form to it. The filing fee is $25 for domestic LLPs or $100 for a foreign LLP. Effective on and after July 1, 2000, annual reports are required. For more information on LLP registration and reporting requirements, see the contact information for the offices of the Colorado Secretary of State, listed in Section VI(a). Note that one potential drawback of LLPs, if you will do business in other states besides Colorado, is that some states, like California and New York, only recognize certain types of professional partnerships as LLPs. If yours is not a professional partnership, such other states may simply treat your LLP like an ordinary general partnership, with no limitation of liability. A partnership agreement, for any type of partnership, should spell out in considerable detail such matters as the following:
Partnerships, as entities, are not subject to state income tax in Colorado. Instead, the income or losses of the partnership, as allocated among the partners, must be reported on the personal income tax returns of the individual partners (or on the corporate tax returns of any corporate partners). Partnerships are required to file an annual tax information return with the state. For details on Colorado partnership tax return filing requirements, see Section IV(c). (d) Corporations. To form a corporation in Colorado, you must file articles of incorporation in duplicate with the Colorado Secretary of State and pay a fee of $50. A foreign corporation (one formed under the laws of another state or a foreign country), must obtain a certificate of authority before it may legally conduct business in Colorado, by filing an application for a certificate of authority and paying a filing fee of $75. For more information on filing articles of incorporation or applying for a certificate of authority to do business in Colorado, see the contact information for the offices of the secretary of state, listed in Section VI(a). In addition, once your corporation is formed, it will be required to file biennial reports and pay a filing fee of $25 for a domestic corporation or $100 for a foreign corporation for each such 2-year period. Failure to file this report on a timely basis could result in suspension or revocation of your corporation's charter. In addition to paying federal income taxes on its income, a corporation that does business in Colorado must also file corporate income tax returns with the state. See Section IV(c) for a discussion of state corporate income tax rates and tax return filing requirements. For tax forms and more information on corporate income taxes in Colorado, see the contact information for the offices of the Colorado Department of Revenue, listed in Section VI(a). (e) S Corporations. An S corporation is simply a regular corporation that has elected, for federal or state income tax purposes, or for both, to be taxed somewhat like a partnership, with its income, losses and tax credits flowing through to its owners, who report such income, losses, or credits on their individual tax returns. Colorado recognizes S corporations for income tax purposes, and treats them in a manner similar to the federal tax treatment. (f) Limited Liability Companies. Colorado, like every other state, has adopted a limited liability company (LLC) law. Thus, in addition to the traditional choices of a sole proprietorship, partnership, or corporation, a business that operates in Colorado may also choose to operate in the form of an LLC. In most states, LLCs are very attractive entities for many small businesses, in that they offer the same protection as a corporation from creditors for debts of the business, while offering much of the flexibility plus the flow-through tax treatment of a partnership for federal tax purposes. See Section IV(c) for a discussion of the income tax treatment of LLCs under Colorado tax laws. To form an LLC under the laws of Colorado, one or more persons must file articles of organization with the secretary of state, which must be accompanied by a $50 filing fee. Foreign LLCs, those formed under the laws of another state, must obtain a certificate of authority to do business in Colorado, by filing an application for a certificate of authority with the secretary of state and paying a filing fee of $75. (Filing fees are set by the secretary of state's office.) In addition to initial filing fees, an LLC formed in Colorado must subsequently file biennial reports within 60 days after the secretary of state mails the report form to the LLC, and must also pay a biennial report filing fee of $25 with each such report. A foreign LLC is also required to file a biennial report and pay a filing fee of $100. Effective on and after July 1, 2000, annual reports are required. For more information on filing articles of organization for an LLC, see the contact information for the offices of the Colorado Department of State, listed in Section VI(a). III. BUSINESS ACQUISITIONS (a) In General. When acquiring an existing business, there are a number of state legal and tax issues you or, preferably, your business attorney, should attend to before closing the purchase. These include matters such as doing a title search for any real property that is being acquired, checking for any recorded security interests on personal property items, and thoroughly researching county, state, and federal records for any judgment liens, tax liens, or other liens, before property is acquired. You will also benefit from consulting a tax advisor before the agreement of sale is negotiated, in order to seek a structuring of the agreement so that the purchase price is allocated among the assets in a way that favors you. You may be able to obtain considerable tax savings if the purchase price is allocated in a way that gives you the best possible tax results under federal and state income tax laws, and other state tax laws, such as sales/use tax or property tax laws. Depending upon the state (or states) in which the seller's assets are located, you may also have to comply with state bulk sale or bulk transfer laws. You should also obtain tax releases from various state taxing agencies, as discussed below. (b) Bulk Sale Laws. Typical bulk sale laws require either publication of legal notices to all creditors in advance of the sale and recording of such notices in some cases, or maintenance of detailed lists of the property to be transferred, for inspection by the public. Colorado is one of the states that has repealed its bulk sale laws, so you no longer have to be concerned with this requirement when buying a business in Colorado. (c) Tax Releases. When you acquire an existing business, you will want to make sure that you do not unwittingly become liable for any unpaid taxes owed by the seller. Typically, to protect yourself, you will need to receive a tax release or releases from various state taxing agencies, for such taxes as sales and use tax, income tax withholding, and state unemployment taxes, in each state in which the seller does business. If you fail to obtain such a release or written statement from the tax agency that the seller is not delinquent on any tax payments, you will be held responsible for such tax if it is not withheld from the purchase price proceeds and paid to the state at the time the sale of the business transpires. In Colorado, you should obtain a sales tax release by writing to the Department of Revenue and requesting a tax clearance and to find out if the seller has an outstanding sales tax liability. Also, require the seller to obtain an unemployment tax release from the Unemployment Insurance Tax Section of the Colorado Department of Labor and Employment. (d) Unemployment Tax Rating of Seller. In addition to obtaining tax releases, you may find it advantageous to succeed to the seller's unemployment tax experience rating, if the seller has a tax rate lower than you would otherwise obtain as a new business. To obtain the seller's favorable experience rating as a successor employer, you will need to apply on a timely basis to the Colorado Department of Labor and Employment (Unemployment Insurance Tax section), requesting that you be treated as a successor employer. (e) Withholding Tax on Real Estate Purchases. Colorado law requires that a buyer withhold income tax equal to 2% of the sales price (or the net proceeds, if less) of certain Colorado realty. The tax withheld is treated as an estimated tax payment on behalf of the seller. Withholding is generally required on any real estate sale exceeding $100,000 where the seller is a non-resident individual, estate or trust, or a corporation without a permanent place of business in the state. There are various exceptions, such as where the property is claimed to be the seller's principal residence, for example. Persons required to withhold must file state Form DR1083 (information return) and a Form DR 1079 with the tax payment, within 30 days after closing of the transaction. IV. COLORADO TAXES AND OTHER GENERAL REQUIREMENTS. (b) State and Local Licensing. Nearly any business, operated anywhere in the United States, will have to have at least one government license of some kind. In most cases, this will be a local license, issued by your city or county. Before you open your business, contact your local city or county hall and find out if your particular business needs one or more local licenses. Most kinds of local business licenses are granted upon payment of a fee, with no further requirements, except possibly for annual or other periodic renewal fees. However, if you are engaging in any kind of food business, you will usually need to also obtain a health department permit and show that you are in compliance with health department food-handling requirements. In addition, be sure to check with an attorney or local government zoning or planning department officials to determine if your business will be in compliance with all local zoning and planning restrictions. If you own or rent any type of facility, you will generally need fire department permits, showing that you meet fire safety codes and any construction or improvements to an existing structure will usually require a building permit. If you intend to simply operate your business from your home, you may be in violation of local zoning requirements, but this is less likely to be a concern if you don't have clients, customers, suppliers, or employees coming to your house on business, on a regular basis. State governments have also traditionally required special licenses for many kinds of professionals, such as physicians, dentists, lawyers, and accountants. To further protect consumers, Colorado has expanded the list of occupations that must be licensed by the state to include many other occupations. Most state licenses not only require payment of fees, but are only issued for a given profession or occupation upon showing that you have completed certain educational or experience requirements, or passed certain tests, or some combination of the foregoing. For information on state licensing and business registration requirements in Colorado, see the contact information for the Business Assistance Center, as listed in Section VI(a). It provides a "one-stop" center for starting or relocating a business in Colorado. You should obtain and complete a copy of the Colorado business registration form, Form CR100, from either the Business Assistance Center or the Colorado Department of Revenue. (c) Income and Franchise Taxes. Colorado has both an individual income tax and a corporate income tax. The Colorado individual income tax is imposed at a flat tax rate of 4.63%. This rate is reduced from 4.75% in 1999, and 5% before 1999. Individual taxpayers generally pay state income tax on their business earnings from a sole proprietorship, or on their share of the earnings of a pass-through entity, such as a partnership, S corporation, or LLC. The Colorado personal income tax return must be filed with the Colorado Department of Revenue. Partnerships, or entities taxable as partnerships for federal income tax purposes, such as LLPs or LLCs, are not subject to state income taxation in Colorado. Instead, they must file an information return with the Department of Revenue each year, showing each partner's share of taxable income, losses, and credits, on Form 106. Individual taxpayers doing business as sole proprietors, or who are partners in partnerships, or members of LLCs, are required to make payments of estimated Colorado individual income taxes, on Form 104-ES, if their net tax liability (not covered by withholding) exceeds $1,000. Estimated tax payments are due in four installments, on the 15th day of the 4th, 6th, and 9th months of the taxable year, and the 15th day of the first month of the following year. To avoid penalty, you must either pay in 70% of the current year's tax, or 100% (110% for certain high-income taxpayers) of the previous year's tax. The Colorado corporate income tax rate, on corporations other than S corporations, is a flat tax of 4.63% of the corporate taxable income. The state corporation income tax return is Form 112, which must be filed with the Department of Revenue by the 15th day of the fourth month following the end of the taxable year, or by April 15th in the case of a corporation whose taxable year is the calendar year. Corporations are required to make estimated tax payments of their state corporate income tax in advance, if their tax liability for the year plus estimated credits exceeds $5,000. Estimated tax payments are due in advance, in four equal installments, on the 15th day of the 4th, 6th, 9th, and 12th months of the taxable year. The total estimated tax that must be paid in is usually an amount equal to the current year's tax rates applied to the previous year's facts, or 70% of the current year's tax. However, if the preceding year was a full year of 12 months, the current year payments need only be equal to 100% of the prior year's tax liability, if that is less. No penaly applies if the total tax for the year is less than $5,000. Penalties will be imposed for failure to make the required estimated tax payments on a timely basis. As under federal tax law, S corporations are generally not subject to Colorado corporate income taxes. In Colorado, a limited liability company (LLC) formed under Colorado law will be treated as a partnership. A foreign LLC, will be taxed in the same manner as for federal income tax purposes. LLCs that are treated as partnerships avoid the possible double taxation of income that can occur with a corporation. Colorado law allows for the formation of one-owner LLCs, which can now qualify for treatment as sole proprietorships for federal tax purposes. (d) Sales and Use Tax. Colorado imposes a general sales tax on retail sales of tangible personal property at the low statewide rate of 3%, reduced to 2.91%, as of January 1, 2001. In addition, local governments are allowed to adopt local sales taxes, at varying tax rates, up to a maximum total state and local rate of 6.91%. Most services are exempt from sales and use taxes. However, there is a special Tourism Promotion Tax that applies to short-term lodging, auto rentals, admissions to tourist attractions, ski lift tickets, and similar tourist-based activities. Sellers are required to obtain a seller's permit and to collect and pay over the state and local sales and use taxes to the Colorado Department of Revenue. There is a $16 license fee, for a two-year period, and a $50 refundable deposit is required. A considerable number of cities, including Denver, require you to separately register for sales tax and make payments directly to the city. Most other cities and local governments allow the state to collect their local sales and use taxes along with the statewide tax. There are numerous exemptions from the sales tax, the most important of which is the resale exemption. If you are a wholesaler or retailer who purchases goods that you will resell, your purchase of such goods may qualify as an exempt sale for resale. Similarly, if you sell goods to wholesalers or retailers for resale by them, your sale may also qualify as an exempt sale for resale. In any such transaction, the exemption is ordinarily available only if the purchaser gives the seller a valid resale certificate, certifying that the items are being purchased for resale, and not for use or consumption by the buyer. A parallel tax, the use tax, is also imposed at the same rate as the sales tax. It is primarily intended to tax property that is acquired from sources outside of the state, in transactions not subject to sales tax, when such property is used or consumed within Colorado. Use tax may also apply to items purchased on an exempt basis, such as for resale, if such items end up being used or consumed, instead of being resold. Colorado allows vendors who collect and pay over sales and use taxes to retain a percentage of the tax as a sales and use tax service fee. The normal percentage rate you may retain is 3.33%, but is reduced to 2.33% from July 1, 2003 until June 30, 2005. This temporary reduction in the service fee applies only to the state portion of sales or use taxes collected, not to the service fees for collection of local or transit district taxes or other special district sales and use taxes. Before making any taxable sales, you will need to register with the Department of Revenue on Form CR100, which can also serve as a trade name registration and registration as an employer, and for the tourism promotion tax. For more information on Colorado sales and use tax registration and compliance, see contact information for the offices of the Department of Revenue in Section VI(a). (e) Real and Personal Property Taxes. In Colorado, as in every other state, any business real estate you own will be subject to real property taxes. In general, there is little that you must do, unless you wish to challenge your assessed valuation, since the assessor will bill you for each year's property taxes as they come due. Colorado also imposes personal property taxes on tangible personal property. However, certain business personal property, such as business inventories, are exempt from personal property tax in Colorado. If your business owns personal property, you are required to file a personal property declaration with the county tax assessor each year, by April 15th. For information on property taxes, there are two publications you may want to obtain from your county assessor, or from the Division of Property Taxation:
See contact information for the Division of Property Taxation in Section VI(a). While Colorado generally taxes tangible personal property, it does not impose a property tax on computer software or other intangible personal property, such as stocks, bonds, promissory notes, and other such paper assets. (f) Other Business Taxes. Colorado imposes a number of other taxes on businesses, including:
(g) Trade Names. A trade name, also known as a fictitious or assumed name, is any name used in the course of business that does not include the actual legal names of all the owners of the business. Thus, if your business goes by any name other than your own real name, it is operating under a trade name. The same is true of a corporation, if it operates under a name other than its legal name. A trade name might also be one that suggests the existence of additional owners, by using such words as "company," "associates," or "group." In most states where you do business, it will be necessary to register a trade, fictitious, or assumed name, so that people who do business with you can find out who the actual owners of your business are. You may also want to register any such trade name, as a means of protecting against other companies usurping that particular trade name. In Colorado, if your sole proprietorship or partnership uses such a fictitious name, you are required to register the name, either onForm DR592, Trade Name Registration, which can be used by sole proprietorships or general partnerships that only need to register a trade name, or on the general business registration form, Form CR100, Colorado Business Registration Form, which can also cover registration for state taxes, withholding and unemployment tax. Similarly, a corporation that does business under a name other than the true name as shown on its articles of incorporation must file a name registration with the secretary of state, as must a limited partnership, LLP, or LLC. V. EMPLOYER REQUIREMENTS IF YOU HAVE EMPLOYEES (a) Employer Registration and Withholding. If you have any employees, you will already be withholding federal income tax and FICA taxes from their wages. In addition, since Colorado imposes a state income tax on the income of individuals, you will need to also withhold Colorado income tax from the wages of your employees. Before you begin to pay wages, you must register as an employer with the Department of Revenue on Form CR100, Colorado Business Registration. For more information on Colorado income tax withholding and registration requirements for employers, see the contact information for the offices of the Department of Revenue, listed in Section VI(a). (b) Unemployment and Other State Payroll Taxes. If your business employs one or more individuals in each of 20 weeks during any calendar year or if your payroll amounts to $1,500 in one calendar quarter, you, as an employer will be required to pay state unemployment tax based on the amount of such wages paid. Employers subject to the Colorado unemployment tax are required to register with the state on Form CR100, Colorado Business Registration. This form is used to register as an employer and for other tax purposes, as well as to register a trade name. After you open an employer account, you will be contacted by the Unemployment Insurance Tax section of the Division of Employment and Training, Colorado Department of Labor and Employment. New employers are required to pay tax at a rate of 1,92% in 2000 on the first $10,000 of wages paid to each employee (1.7% base rate plus 0.22% surtax). After you have had employees for a while, you will develop an unemployment tax experience rating. This rating is based on the number of employees you terminate who then claim unemployment benefits and the amount of such benefits paid to those former employees, under complex formulas. The state will inform you when they have assigned you an individual tax rate based on your firm's experience rating. That rate may be higher or, if you have had relatively few benefit claims charged to your account, lower than the standard new employer tax rate you initially were paying. All state unemployment taxes are imposed upon you as the employer, and, under Colorado law, cannot be charged to your employees or withheld from their wages. For more information on your Colorado unemployment tax obligations as an employer, see the contact information for the offices of the Division of Employment and Training, listed in Section VI(a). (c) Workers' Compensation. Workers' compensation insurance is a state-mandated insurance requirement for most employers, in almost every state. In Colorado, virtually all businesses with one or more employees are required by law to have workers' compensation insurance, except those able to self-insure. Note, however, that a sole proprietor or a partner in a partnership is generally not considered an employee. Similarly, certain officers of a corporation may reject coverage, if they so choose. Workers' compensation provides wage loss and medical benefits to employees injured on the job and it protects you, as an employer, from legal action for damages for injuries or job-related illnesses suffered by your employees. In effect, it is a "no-fault" insurance system for work-related injuries or illnesses. Thus, if you fail to obtain required workers' compensation insurance, and an employee is injured on the job, you will have opened yourself to unlimited liability and severe legal consequences, so it is very important to obtain workers' compensation insurance for your employees. Your workers' compensation insurance carrier will provide you with posters that you are required to post in your workplace, notifying employees of their workers' compensation coverage. Be aware that neither general liability nor health and accident insurance can properly substitute for workers' compensation insurance. For more detailed information regarding your obligations as an employer under the Colorado workers' compensation laws, contact your insurance carrier or see the contact information for the offices of the Division of Workers' Compensation, listed in Section VI(a). (d) State Wage and Hour Laws. Some employees of certain small firms not engaged in interstate commerce are not covered by the federal minimum wage and overtime laws. However, even if few or none of your employees are covered by the federal wage-hour laws, because your firm does less than $500,000 a year in gross sales and the employees in question are not deemed to "...engage in (interstate) commerce...," they may still be subject to the Colorado wage-hour laws, which provide for a state minimum hourly wage that is currently $5.15 an hour. State law also provides that employers must pay time-and-a-half for overtime, which is defined as any hours worked in excess of 40 a week, 12 hours in a day, or 12 consecutive hours. Besides the federal wage-hour posters that you must display in the workplace, you must also display a state wage-hour poster, which you can obtain from the Colorado Division of Labor -- Labor Standards Unit. In addition to wage-hour laws, most businesses are subject to federal child labor laws, which put numerous restrictions on the working hours and kinds of work in which minors under the age of 18 may engage. Your business must also be cognizant of similar state child labor laws, in Colorado. (e) State Occupational Safety and Health Laws. Approximately half of the states have their own OSHA-like agency, charged with administering the state's own occupational safety and health laws. The remaining states have no such enforcement agency, and thus rely instead on the federal Occupational Safety and Health Administration (OSHA) to administer the federal job safety rules within such states. Colorado is one of the states that does not have its own local equivalent of OSHA. Note that while you may obtain a free safety consultation from federal OSHA experts, they must and will cite you for any violations they discover at your workplace. This is not the case in states with their own OSHA programs, where, if you request a safety consultation from the state agency and they detect violations, they will not cite you if you promptly correct the unsafe conditions. For information, required posters, and possible on-site safety consultations, see the contact information for the Denver offices of OSHA (federal), listed in Section VI(a). (f) Other Miscellaneous State Labor Laws. Other Colorado labor laws you need to be aware of, as an employer, include the following: (1) Wage payments to terminated employees. If you, as an employer, terminate an employee, you must pay him or her any unpaid wages that are owed immediately, in general. If the employee is terminated at a time when the bookkeeping unit is closed, the employer has SIX HOURS from the time it reopens to issue the check. The employee may pick up the check at the regular site or have it mailed to a specific address. If an employee quits, you need not pay him or her until the next regular payday. (2) Right-to-work laws. About half the states have enacted "right-to-work" laws, which guarantee that no person may be denied employment for refusing to join a union or for not paying union dues, thus banning either "union shop" or "agency shop" agreements, or both. In a union shop, an employee not belonging to a union may be hired but then must join the union, usually within 30 days. In an agency shop, an employee need not join the union but, to remain employed, must pay union dues. Colorado does not have such a right-to-work law and allows union shop or agency shop contracts between an employer and a union. (3) State anti-discrimination laws. In addition to complying with federal anti-discrimination laws, employers must also be aware of and comply with state civil rights laws in Colorado, and display a poster informing employees of their rights. You can obtain this poster from the Civil Rights Division, at the address listed in Section VI(a). (4) Reporting new hires. Under federal welfare reform laws, employers in all states now have to report newly-hired (or rehired) employees to a designated state agency (the Colorado State Directory of New Hires for Colorado employers) within 20 days after the date of hire. See the contact information for the Colorado State Directory of New Hires listed in Section VI(a). VI. STATE SOURCES OF HELP AND INFORMATION (a) Key State Agencies Contact Information. Colorado, as many states have done in recent years, has set up a "one-stop" center to help your new or existing businesses to obtain all necessary state licenses and permits from a single office, without your having to go from agency to agency to meet all the legal and regulatory licensing requirements. The Colorado Business Assistance Center is a cooperative effort between the Colorado Office of Economic Development and the Colorado Department of Revenue. You can register your business with the state on a single form, Form CR100, Colorado Employer Registration, which is a multi-purpose form that you can use to register as an employer for state withholding tax and state unemployment tax, obtain a sales and use tax license, and to register a trade name. You should also request a copy of their Colorado Business Resource Guide, which contains all necessary federal, state, and local forms necessary for starting a business in Colorado. The Business Assistance Center is the initial referral point to the state's network of Small Business Development Centers, any of which can provide individualized consulting services to your new or small business. BUSINESS STARTUP INFORMATION. To obtain business registration forms and information on starting or relocating your business in Colorado, contact the Business Assistance Center at:
Addresses and other contact information for other key Colorado state government agencies mentioned in this book are listed below for your convenience. SECRETARY OF STATE. Contact the Department of State for information on:
STATE SALES TAX. Obtain your sales and use tax license or permit and information on the Colorado sales and use tax law, from the Department of Revenue, at the address listed above for that agency, by registering on Form CR100. PROPERTY TAXES. To obtain helpful booklets on local property taxation in Colorado, call or write your county assessor or:
NEW HIRES. Report newly hired or rehired employees within 20 days of hiring to the following state agency:
WORKERS' COMPENSATION INSURANCE. If you employ workers for whom you must supply workers' compensation coverage, contact the following agency for further information:
STATE OSHA PROGRAM. There is no state OSHA program in Colorado. The federal government provides federal OSHA enforcement instead. For required posters and information on federal occupational safety and health laws that affect you as an employer in Colorado, contact:
(b) Small Business Development Centers. A number of Small Business Development Centers (SBDCs) are located throughout Colorado to assist you. These centers, usually located on college campuses, provide a wealth of start-up information and sponsor frequent business-oriented seminars. Contact the lead office below for information, or for the location of other SBDCs nearer to you.
(c) Internet Sites. If you have access to the Internet, there is a wealth of state and even local business information provided by state and local governments. All states now have a state government Web page, and most major state agencies also have sites on the Internet where you can obtain useful small business information on matters such as state taxes, financing sources, or the addresses and phone numbers (or e-mail addresses) of various state and federal agencies' offices in Colorado. Since new sites are appearing constantly, you might also want to search for other Colorado government Web sites by using one of the popular Internet search engines, such as Excite! or Yahoo. To start your Internet search for Colorado government information, you may want to begin with the following Internet sites: State of Colorado Home Page: Links to all Colorado state agencies: Colorado Business Assistance Center: Colorado Secretary of State Home page:(d) Financing Sources. For information and help on locating financing for your small business, contact the nearest U.S. Small Business Administration office in Colorado, or contact the following state agency:
(Provides direct loans to businesses that create jobs for low- and moderate-income people, in communities of 50,000 population or smaller.) |
Copyright © 2000 Michael D. Jenkins
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