Virtual General Counsel LLC
Helping Startups And Complex Business Clients Throughout Centennial, Denver And The Surrounding Areas
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Denver Business & Commercial Law Blog

What types of financing are available to small businesses?

As the old saying goes, "It takes money to make money." Many small businesses need financial resources to get their business off the ground. There are two general choices for funding a small business: debt and equity.

When a business takes on debt, it is essentially borrowing funds from a lender, which it will then need to pay back plus interest. When a business utilizes equity, this means it is obtaining funds by selling interest shares.

Succession plans can be a part of the business formation process

When a person in Denver sits down and makes plans to establish their own family business, the idea that they will eventually leave the business may not cross their mind. However, succession planning can be made part of the business formation process. Having a succession plan in place from the get-go can help ensure the family business is left in the hands of the right person.

A succession plan can see that the process of transferring the business from one owner to another owner runs smoothly. When it comes to family businesses, one must account for family dynamics. After all, family members have relationships with one another -- some good, and some bad -- meaning transferring the family business on to a relative can be an emotional affair. Moreover, many people find that having discussions with their loved ones about finances and death can be unpleasant and awkward. This may be why, according to one source, over 70 percent of family business are not passed on from the original owner to the next generation. A succession plan can help prevent this.

Buy-sell agreements can help partners expect the unexpected

When two people in Denver partner to start a business, it is often with the anticipation that the enterprise will be lucrative for years. However, no matter how well the partners work together or how successful their business, life has a way of throwing a curve ball.

For example, one partner could get a divorce, or one partner could end up filing for personal bankruptcy or one partner could unexpectedly pass away. These, and other life events, could have a major impact on the running and ownership of the business that, absent the proper protections, the partners may never have intended.

Are non-compete agreements legal in Colorado?

A non-compete agreement is a contract where an employee agrees that, if the employee leaves their job, they will not work in the same occupation for a different employer (usually a competitor) for a certain period of time. These agreements help employers protect their interests from competitors. However, are such agreements allowed under Colorado law?

Under Colorado Statutes, Section 8-2-113, it is against the law to try to force, threaten or intimidate an individual from pursuing a lawful occupation, wherever he or she chooses to do so. Therefore, per Colorado law, a non-compete agreement that restricts an individual's right to work for and be paid by another employer is void, with four exceptions.

Why You Need An Agreement With Your Business Partner

Did you know that if you do not have an agreement with your business partner, your business partner's spouse could become your partner in the event of your partner's death, disability or divorce?

When starting a new business venture with a friend or relative, it can be easy to get caught up in the excitement of starting your own enterprise. No matter how exciting or overwhelming, it is important not to overlook small details that can have a big impact later on. Creating a partnership agreement while in the early stages of business can help you prepare for the unexpected changes you will face later on even if the business is a corporation, LLC or partnership.

Don't rush through mergers and acquisitions

Part of doing business in Colorado is entering into complex business transactions. Two major types of business transactions include mergers and acquisitions. While a merger or acquisition can be a great way to grow a business, there are some points business owners should keep in mind if they are considering undergoing this type of business transaction.

First, it is important to make sure that one's strategy for the merger or acquisition is clear and understood from the get-go. When a business is looking to buy another business, there should be a well-understood reason as to why they are undergoing the acquisition. This in turn can affect how negotiations between the two businesses will transpire and how the ultimate business entity will be structured.

What are some steps to form a business in Colorado?

Many people in Colorado have an entrepreneurial spirit, and this is good for the state's economy. However, it takes more than just a novel idea to get a business off the ground. There are certain requirements that must be met in order to establish a lawful business in Colorado.

First, in order to establish a business, the business owner needs to register for the appropriate taxes. For instance, a business may need to register for sales and use tax and withholding tax. Depending on the nature of the business there are other taxes that a business may need to register for, such as the liquor excise tax or severance tax, among others.

Assistance in business formation

Setting out on the entrepreneurial path and starting your own business is a thrilling venture. With all the excitement and hope, however, come necessary steps and crucial decisions. The formation of any business hinges on a solid foundation, and the legal elements of the business are a part of that.

If you're just getting started with your business formation, there are many different questions that must be answered before your venture can proceed. From choosing the type of entity your business is going to be, methods of protecting yourself from personal liability should the business go under, strategies of avoiding serious contractual disputes and legal quagmires with partners and vendors, and many more.

Contracts: a look at breaches and remedies

Recently, a cooler company in Boulder partnered with a logistics firm in Louisville to facilitate and oversee their product manufacturing in China. However, the partner failed to provide the manufacturing services they promised. The cooler company then sued and allegedly received some $32,000 in compensation.

The above example illustrates two concepts known in the legal community as “breach of contract” and “remedy”. Today we’ll examine the meaning and implications of these terms.


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