State guide · Colorado
Starting a Medical Practice in Colorado
What physicians need to know about Colorado's regulatory environment, entity requirements, and practice-specific rules.
Entity required
Professional Corporation or LLC (with professional limitations)
LLC permitted
Yes
CPOM enforcement
Limited
Top income tax
4.4%
Min. franchise tax
None
Med board registration
Not required
The information on this page is provided for general reference only and may not reflect recent regulatory or legislative changes. Entity formation requirements, tax rates, and CPOM rules vary by state and change frequently. Always verify requirements with your state's official agencies, a qualified healthcare attorney, or a CPA with medical practice experience before making business formation decisions. Nothing on this page constitutes legal or financial advice.
Entity Requirements
Colorado allows physicians to practice through a standard LLC, a Professional Corporation, or a Professional LLC. Colorado does not have a strict separate professional-entity statute; instead, the Colorado Corporations and Associations Act permits LLCs to render professional services as long as ownership and operations comply with applicable licensure laws.
Filing is with the Colorado Secretary of State, which has a fully online filing system.
Worth knowing
Colorado is one of the few states that permits a standard LLC for physician practices, simplifying formation. However, ownership must still be limited to licensed Colorado physicians for any entity practicing medicine.
- •Standard LLC, Professional Corporation, or Professional LLC permitted for medical practice
- •All members/shareholders practicing medicine must be licensed Colorado physicians
- •File Articles of Incorporation or Articles of Organization with the CO Secretary of State
- •File a Periodic Report annually with the Secretary of State
- •Obtain Colorado sales tax license if selling tangible goods
Corporate Practice of Medicine
Colorado has a limited Corporate Practice of Medicine doctrine. The Colorado Medical Practice Act prohibits the unauthorized practice of medicine, but Colorado has not adopted a broad statutory CPOM ban like California or Texas. Hospitals can employ physicians, and general business entities have more flexibility.
Fee-splitting with non-physicians remains prohibited. MSO arrangements are widely used and generally permissible.
Tax Considerations
Colorado imposes a flat 4.4% personal and corporate income tax (the rate is set by referendum and has been declining). There is no franchise tax. Colorado offers a SALT-cap workaround through the Pass-Through Entity Tax (SALT Parity Act) election.
Local sales-tax compliance can be complex due to home-rule cities with separate taxing jurisdictions.
- •Flat 4.4% personal and corporate income tax
- •No franchise tax
- •Pass-Through Entity Tax (SALT Parity Act) election available
- •Home-rule cities have separate sales tax administration
- •Colorado Family and Medical Leave Insurance (FAMLI) employer/employee premium
Colorado Medical Board
Colorado does not require entity registration with the Colorado Medical Board for general physician practices. Individual physicians are licensed by the board, which sits within the Department of Regulatory Agencies (DORA).
- •No general entity registration with the Medical Board required
- •All practicing physicians must hold an active CO medical license
- •Office-based surgery and pain-management clinics have additional requirements
Employment Law Considerations
Colorado has been adding employee protections. Healthy Families and Workplaces Act requires paid sick leave (up to 48 hours/year); FAMLI provides paid family and medical leave (effective 2024). Non-compete agreements are largely banned for most workers as of 2022 under HB 22-1317, with narrow exceptions.
- •Paid sick leave under Healthy Families and Workplaces Act (up to 48 hours/year)
- •Colorado FAMLI paid family and medical leave (premiums began 2023, benefits 2024)
- •Non-competes banned for most workers (HB 22-1317) — narrow exceptions for highly compensated workers and trade secrets
- •Colorado Equal Pay for Equal Work Act — pay transparency required on all postings
- •Colorado minimum wage adjusts annually with inflation (above federal)
Heads up
Colorado's Equal Pay for Equal Work Act requires pay-range disclosure on every job posting. Non-compliance carries per-violation penalties and audit risk.
Official resources
Bookmark these official agency portals for Colorado entity formation, tax registration, and medical board information.
Looking for Colorado licensing and credentialing information?
State medical license requirements, controlled-substance registration, and Medicaid enrollment specifics for Colorado.
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