Denver Business & Commercial Law Blog

We often talk about business as though its only goal is growth and profit. Certainly, a for-profit enterprise needs to make money. But it can also do some good for the community.

Denver recently became home to a new pizza restaurant that employs mostly people with disabilities. Located in the Cherry Creek neighborhood, Pizzability looks much like any other pizza place in the front of the house. It serves pizza by the slice or the pie, beer and other beverages, and scoops of gelato. In the back of the house, things are different. Almost all the employees have disabilities. The kitchen is designed with wheelchairs and other tools in mind, and there are a number of features for disabled workers, including tools and other things for people with sensory needs.

One of the most difficult aspects of buying or selling a business is determining its value. One might say that, as with so many things in our society, a business is only worth whatever someone is willing to pay for it.

However, it's essential to get a professional valuation of the business so that the buyer and seller know a baseline for their price negotiations.

It's always a good idea to get a business agreement down on paper, but sometimes, for one reason or another, it doesn't happen. Most businesspeople in Colorado are familiar with the so-called handshake deal, and other types of contracts that are not necessarily in writing. Many of these agreements meet the basic requirements of a contract (offer, acceptance, consideration, competency, intent) and so will be legally enforceable. However, a law known as the Statute of Frauds requires that certain types of contracts must be in writing, or else they are not legally enforceable.

Every state has some version of the Statute of Frauds on its books. In fact, the basic premise of the law dates back to English law from before the American Revolution. Contracts that must be in writing include those that are to last for more than one year, contracts involving the executor of an estate, contracts for goods that cost more than $500 and contracts for the sale of land, and financing agreements.

When you are starting a new business, you have a lot on your mind. You have to get your product or service ready for market, you have to find a market, deal with suppliers, hire employees, find office or retail space and keep track of thousands of details.

All that is more than enough for any one person to take on. But while you're preparing to launch your business, it's important to make sure your business is prepared for the next chapter. If you don't have the legal elements of business formation together early on, you could be setting your business and yourself up for big trouble.