Colorado Business and Limited Liability Company Rules

Find out if a Colorado Limited Liability Company is the business entity for you.

A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute. Colorado forms hundreds of new Limited Liability Companies in a single month.

LLC Basics

 LLCs are popular because, similar to a corporation, Colorado owners have limited personal liability for the debts and actions of the LLC. Other features of LLCs are more like a partnership, providing management flexibility and the benefit of pass-through taxation. 

Owners of an LLC are called members. Since most states do not restrict ownership, members may include individuals, corporations, other LLCs and foreign entities.  There is no maximum number of members. Most states, including Colorado also permit “single member” LLCs, those having only one owner. 

A few types of businesses generally cannot be LLCs, such as banks and insurance companies. Check the Colorado Secretary of State Web site for more information or contact a Denver, Colorado Small Business Lawyer about the requirements and your accountant for the federal tax regulations for further information. There are special rules for foreign LLCs. If you are an out of state business, you have to be registered in the state of Colorado as a foreign entity.

Must I hire an Attorney to Form a Limited Liability Company?

 Generally, you do not need to retain a lawyer to form an LLC. However, although states allow business owners to form their own LLC by filing articles of organization. In most states, the information you must provide for the articles of organization is very basic -- typically, you have to supply the name of the LLC, the location of its principal office, the names and addresses of the LLC's owners, and the name and address of the LLC's registered agent (a person or company that agrees to accept legal papers on behalf of the LLC). 

However, as a prudent business owner, you know that the cheapest way is not always the best way. There is a lot more to forming an LLC in Colorado than online forms.

A business lawyer can further advise you on such things as personal liability, how to comply with the Colorado LLC statute or even help you with other business forms such as subcontracts, contract for services and more. 

Be aware of online- forms because you still have the obligation to ensue proper business formation in Colorado. 

Contact our office if you need to retain an attorney at (720) 941 7200

Buying Agreements and Contracts From the Store

Cutting an pasting online contracts? Is this  safe to do?

Contract Law Basics

When you enter into a contract, you are legally binding yourself to do something or not to do something. You should always get your contracts in wiritng. The problem is that most of clients come to us when the problem is far gone. For example, during a breach of contract interview, we may find that you've decided to stop performing your end of the agreement because you think it is justified because the other party stopped performing.  An attorney that understands contract law would never tell you to do this.

If you look at the problem closely, you have breached the contract also. Contract law allows certain legal justifications to non-performance of a contract. The above reason is simply not one of them.

Should I use a forms program to draft my contract?

The simple answer is that you can obviously take this short cut. However, read the fine print when you buy it. Most contract forms programs have a disclaimer that says you should consult an attorney. This creates a problem. Can you now go after the program seller? Maybe not.

You must seriously consider the risk you a seeking to protect. Most people don't quite understand contract law and simply take chances. In the event of a breach, Colorado law allows certain legal remedies that you may not understand. The lesson is not to take unnecessary chances.

Contract clauses are something you should not guess on. Any contract should contain clauses for attorney fees and the controlling state law. At a minimum, you should write a contract that clearly explains the obligation of each party and what is expected if there is a breach.

A Colorado court generally will not rewrite a contract for you if the terms are clear.  Verbal contracts, although enforced and not prefered. Even if you need to quickly jot something down on paper, it beats nothing.

When in doubt, get a contract law attorney to draft your contracts for you. Never guess or take short cuts. The cost in the long run can be very expensive. If you think you need help drafting or reviewing your contract contact our firm for immediate help or call 720.941.7200

Many new business start-ups choose the limited liability company. However, the approach should be to first look at how the business is organized. In you have silent partners then a limited partnerhsip would be the entity to consider. Colorado business find themselves in hot water when the actual business operation and management go astray from the the business types allow.

The typical problem occurs when you have a business partner who makes day to day decisions about the business when he or she is not supposed to. This can bring about personal liability. If you are a new start-up business, you may want to seek advice from an attorney. More often than not, new business owners simply don't understand that in addition to forming a new business in Colorado, that there are strict rules that must be adhered to.

Do decide the right business entity you must also know the tax implications for each. S corps and C corps are the issues to consider, they all have different tax implications. It is also wise to consult with an account to get up to speed on crtical tax information before starting up your new business