It almost goes without saying that you need a lawyer for company registration and other startup matters in Colorado. Do you know the right questions to ask your attorney before starting a business? Failure to ask and answer the right questions could come back to haunt you later. Following is a list of some questions to ask a lawyer when starting a small business.
1. What Business Structure Should I Choose?
One of your very first decisions should be which business form to use. Several popular options exist.
- Sole proprietorship. In a sole proprietorship, you maintain complete control over your company. You don't need to share profits, but another party can hold you personally liable for business debts.
- General partnership. In a general partnership, you share profits and liability with at least one other partner. A third party can hold all partners liable for the debts of the business.
- Corporation. A corporation is a separate legal entity under Colorado law. Although other parties cannot hold you personally liable for corporate debts, corporations often require a lot of paperwork and expense.
- Limited liability company (LLC): Limited liability companies are the most popular business vehicle in Colorado. They combine the simplicity and flexibility of a partnership with the limited liability of a corporation.
- Limited liability partnership (LLP). A limited liability partnership is similar to an LLC under certain circumstances. Nevertheless, the differences between these two forms can be significant under certain circumstances.
Colorado recognizes certain other business vehicles as well. The commercial business attorneys at Sequoia Legal can help you decide which form is right for you.
2. What Do I Need to Know About Choosing a Name for My Business?
The name of your business can determine whether it succeeds or fails. You cannot choose a name that is already being used by someone else or a name that is confusingly similar to a business name already in use. Likewise, you cannot choose a business name that would violate someone else's trademark rights.
You can, however, do business under a unique “doing business as” name that differs from your company's legal name. You can perform a name availability search on the website of the Colorado Secretary of State.
3. How Do I Minimize My Risks as an Employer?
You open up a whole new world of potential liability the moment you hire your first employee (not to mention a lot of paperwork). A multitude of state and federal laws govern the behavior of employers towards their employees. Remember, ignorance of the law is no excuse for failure to comply with it. Such laws include (among many others):
- Health and safety regulations;
- Anti-discrimination laws;
- Wage and hour laws; and
- Immigration-related laws (if you employ people who are not US citizens or permanent residents).
A Denver lawyer for business startups can help you minimize your exposure to a multitude of legal risks that you might not even be aware of.
4. What Should Be In My Operating Agreement or Bylaws?
If you form an LLC, you need an operating agreement. If you form a corporation, you need bylaws. No matter what business form you choose, with the possible exception of a sole proprietorship, you need to establish an internal governance structure. What happens if someone leaves your partnership, for example? This helps you run your company more efficiently, and it might satisfy government auditors who stop by from time to time.
5. How Can I Protect My Intellectual Property?
Intellectual property (IP) is becoming a more and more important component of company assets. It represents the entire value of the assets of some companies virtually. These assets require protection, and IP laws provide the means to do so. Some of the ways to protect IP rights include:
- Patenting and licensing your unique technology;
- Registering your trademarks and using them in commerce;
- Registering your copyrights on works of authorship, including computer software code; and
- Creating non-disclosure and non-compete agreements.
Don’t forget that some of your IP rights may require international protection.
6. What Contracts Does My Business Need?
The contractual needs of every business differ. Some of the most commonly used business contracts include:
- Employment contracts;
- Non-disclosure and non-compete agreements;
- Independent contractor agreements;
- Partnership agreements;
- Joint venture agreements;
- Sales contracts;
- Buy-sell agreements; and
- Lease agreements.
Have a business lawyer draft or at least review your company’s contracts.
7. What Other Risks Should I Be Guarding Against?
The number of business and legal risks that you might eventually face is almost beyond contemplation. These risks vary drastically according to the industry you are operating in. Insurance is one way to mitigate your risks. Regular legal advice, however, is a particularly effective way to mitigate your legal risks. Remember, these risks constantly change in the dynamic and fluid environment of the modern business environment.
The more advance planning you engage in, the more likely it is that your startup will succeed, even though most startups fail. Effective execution is important too. The experienced Colorado startup lawyers at Sequoia Legal will be with you every step of the way if you so desire.
Contact us today to learn how Sequoia Legal can help you resolve complex problems and minimize legal risks that you might not even be aware of. Call (303) 476-2851 or contact us online to schedule a consultation.