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

Are non-compete agreements lawful in Colorado?

When a person in Colorado starts a new job, it can be an exciting time. However, after being hired or during the course of employment, a worker may be faced with signing a non-compete agreement, stating that the worker will not work for a competing business if they leave the employment of their current employer. This can be very limiting on a worker, and for this reason, Colorado law has addressed the issue of non-compete agreements.

In general, per Colorado law, non-compete agreements are void. However, there are four exceptions to this blanket rule. It is important to know what these exceptions are, so one can understand the difference between lawful non-compete agreements and those that are not allowed.

Which small business structures shield owners from liability?

In a sole proprietorship or partnership, generally the owners of the business can be held personally liable for the debts and actions of the business. This is obviously not desirable to most small business owners in Denver. Fortunately, there are other ways to structure a small business that limits the business owner's personal liability for the debts and actions of the business.

One way to reduce personal liability is through the establishment of an S corporation. S corporations also have tax advantages that small business owners may wish to take advantage of. An S corporation has a board of directors and must hold board meetings each year. In addition, there is also paperwork that must be filed in order for the S corporation to be compliant with the law.

Struggling small business may benefit from a merger

Sometimes a small business in Denver finds itself mired in financial difficulties. It may find the costs associated with manufacturing its products have gone up. Or, it may find that its customer base is shrinking. Small business can also suffer if there is an increase in competition. What this comes down to is that small businesses in these situations will want to remedy them as quickly as possible, and one way to do so is through a merger.

Mergers take place when two companies join together to establish an entirely separate new business. Once the new business is formed, the original companies no longer exist. There are a variety of reasons why mergers may benefit small businesses; especially those that are struggling to keep their doors open.

What are some essential elements of a real estate contract?

Buying a house is an exciting event for many people in Denver, whether they plan to "flip" it or to live there for many years to come. However, one should not rush through the home buying process. One important part of the home buying process that requires careful thought and scrutiny is the drafting of the real estate purchase contract.

Of course, the real estate purchase contract will include the address of the property and how much it is being purchased for. However, there are other items to include in a real estate purchase contract to make it as legally sound as possible.

We guide Coloradans through the business formation process

Starting your own business or purchasing an established business in Colorado is an exciting endeavor, but it can also be an overwhelming one. For example, while you may have a grand vision in sight for your new business, it is necessary to ensure that all legal formalities are met -- something many people do not have much experience with.

For example, business owners need to decide what type of entity their business will be. Will it be a sole proprietorship, a limited liability company or a corporation? Each of these businesses entities have their own rules with regards with what legalities need to be followed when forming the business. In addition, business owners will be interested in ways they can be protected personally from the debts and liabilities of the business. Many businesses utilize contracts in their day-to-day operations, so contract disputes can arise. Finally, business owners may want to consider if there is a way to organize their enterprise so that forms of alternative dispute resolution must first be tried before a case involving the business can go to court.

What are the requirements for winding down a business?

When individuals in Denver join forces to form partnerships, they often see years of success as their business grows over time. However, the time may come where partners want to dissolve their business. They may each want to go their separate ways as they pursue new business opportunities, or they may simply be ready for retirement. Whatever the reason, when it comes to winding down a business, there are steps that need to be followed to ensure all the proper legalities are fulfilled.

First, if the partnership has a written partnership agreement, any rules regarding dissolving the business included in the written agreement should be strictly followed, along with any relevant state laws. If the general partnership filed with the state of Colorado as part of the business formation process, then it must also file dissolution documents with the state of Colorado.

What types of mergers might small businesses undergo?

Some people in Colorado may be under the impression that only large, nationally known conglomerates execute business mergers, as these major mergers often make news headlines. However, even small businesses can benefit from a merger. The following is a brief explanation of the types of mergers a small business can undertake and what the benefits of these mergers are.

Horizontal mergers take place between two businesses that provide similar products or services to similar customers. In a horizontal merger, the newly formed business is generally able to offer the product or service at a lower cost to a greater number of customers. Market shares also generally go up. Costs to run the new business also generally go down in a horizontal merger because any redundancies the original two businesses had are eliminated.

Contract formation is the backbone of many Denver businesses

Contracts often form the backbone of a successful business, and many people in Denver rely on contracts every day to keep their business viable. The exchange of money, goods and services sometimes requires some intense negotiations, but the end goal is to form a legally binding agreement.

It is important to understand what must be done to form a contract. To form a contract there needs to be an offer, consideration, acceptance and mutuality. Let us break down these topics, to better understand contract formation.

"Consideration" is essential to a legally binding contract

Businesses enter into contracts every day. Some contracts involve goods, while others involve services. Contracts are not limited to the manufacturing industry, sales industry or any other industry for that matter. Any business in Denver will likely find itself one day needing to draft a contract. Therefore, it is important to have a basic understanding of how a contract is formed.

To enter into a contract that is legally enforceable, there must be an offer, consideration and acceptance. Consideration constitutes what is being exchanged in the contract -- that is, what it is of value that each party receiving from the agreement. Without consideration, the contract may not be binding.

The basics of contract formation

People in Denver's business world enter into contracts every day. Some of these may be standard contracts, such as sale contracts or employment contracts. However, even a standard contract can involve a lot of negotiating before the parties come to an agreement. It is important, then, to have a basic understanding of how contracts are formed.

In general, a contract is formed when several elements are met. First, there is an offer made by one party to the contract that is accepted by the other party to the contract. Second, there must be consideration, that is, an exchange of one product or service for something else of value, such as money. When these elements are properly met, this means that both sides to the contract are in an agreement about what is being offered and what is being exchanged.


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