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Denver Business & Commercial Law Blog

When can I sue for breach of contract?

If you are a small business owner, you are probably surrounded by more contracts than you realize. Between clients, customers, vendors, contractors, loans and purchase agreements, you have likely signed on the dotted line more than a few times. Unfortunately, you have also likely had to deal with other party not holding up their end of the bargain. So when does it reach a point where you can actually do something about it?

There are several situations in which a contract is considered to be breached, or in layman's terms, broken. However, in order for a court action to ensue, there must be what is known as either a "material breach" or an "anticipatory breach." A material breach is also known as a total breach. It takes place when a contract is irreparably broken and defeats the purpose of signing the contract to begin with.

What is a hostile acquisition?

The business world can cause many serious events and decisions. Most of us have heard the term "hostile takeover," whether in a movie or in real-life. This action is also known as hostile acquisition, and is often a complex, uncomfortable matter. By definition, the word hostile means unfriendly, antagonistic and opposed. In other words, it's usually not much fun.

A business is experiencing a hostile acquisition when another entity is attempting to takeover by way of shareholder vote. Management of the target business does not want the takeover to happen. Therefore, the acquiring company will make moves to bypass top management and obtain approval from shareholders. In a publicly held company, shareholders vote on members of the governing board. Just as easily as they may vote a member in or request removal, they may also choose to allow another company to takeover altogether.

Business formation includes obtaining licenses and permits

Many entrepreneurs in Colorado will decide that they want to open their own small business. Part of the business formation process includes obtaining any necessary federal and state licenses and permits. These licenses and permits are required by law if the activities the business engages in are regulated by federal or state agencies.

Various federal and state agencies require certain businesses to be licensed. For example, if a business is involved of the manufacturing, wholesale, import or sale of alcoholic beverages including beer, wine and liquor at a retail location, then that business must obtain a license from the Alcohol and Tobacco Tax and Trade Bureau and the Local Alcohol Beverage Control Board. Or, if a business is engaged in importing or transporting plants, biotechnology, biologics, animal products or animals, then that business must obtain a license from the U.S. Department of Agriculture. Some examples of businesses that may be regulated by the state include businesses in the construction industry, restaurants and retail stores.

How can a business in Colorado counter a "tender offer"?

It is not unusual for small businesses in Colorado to be interested in growing their enterprise. One way to do this is through a merger and acquisition. There are a variety of types of mergers and acquisitions. One type of acquisition is a "tender offer."

A tender offer is a type of acquisition wherein one corporation submits an offer to purchase another corporation's outstanding stock. Shareholders are made aware of the tender offer through advertisements and mailings. A tender offer is a means for one corporation to acquire another, via having a controlling interest in the corporation through corporate shares, while bypassing the management of the corporation being acquired.

Negotiating business contracts can be complex

Businesses in Colorado negotiate contracts every day. It is hoped that through these negotiations the parties can reach an agreement that they are both satisfied with. However, negotiating the details of a contract can be a complex endeavor, as both parties want to secure some sort of benefit from the agreement and neither party wants to see their rights or interests violated.

For example, when it comes to purchase and sale agreements, each side wants to benefit from upholding their end of the contract. Mergers and acquisitions are also business transactions that require a carefully drafted contract to be successful. And, when it comes to employment contracts, the employee will want to ensure they are being treated fairly both during and after employment, while the employer will want to ensure its interests are protected while the employee works for them and if the employee leaves the company.

Negotiating a small business merger

There are many business dealings that take place every day in Denver and throughout Colorado. One of the most complex transactions a business can undertake is a merger and acquisition. A merger takes place when two or more businesses combine, creating a single entity. Mergers allow both parties to benefit financially from their respective strengths and resources. There are numerous issues that will need to be negotiated to make the merger successful.

The companies merging will need to determine what legal structure the new entity will take. Will it be a corporation? A limited liability company? Or something else? The parties to the merger will also need to decide on how to combine management, executives and their respective boards of directors. Sometimes, to avoid redundancies, some workers may need to be let go.

How can subcontractors and suppliers obtain a mechanic's lien?

Contracts between subcontractors and suppliers in Denver are often entered into with general contractors, who then contract with the property owner to complete a construction project. All these parties have a stake in the work being done per the terms of the contract. Therefore, if a subcontractor or supplier is not paid per the terms of the contract, they may pursue a mechanic's lien.

Mechanic's liens are a tool available to subcontractors and suppliers who have not been paid what they are due. These liens constitute a legal claim against the property that the subcontractors have worked on or suppliers have contributed to. It is important to understand that, even if the property owner paid the general contractor what they were supposed to under the contract, if the general contractor does not then pay the subcontractor or supplier what they are due per the terms of the contract, the subcontractor or supplier can pursue a mechanic's lien on the property.

Basic topics to address in a partnership agreement

Business partners in Denver often share the same passion for their jointly-owned enterprise, but it is still important to ensure that they have the same expectations about their respective roles in the business and a set of rules on how their business should be run. Therefore, they may want to execute a partnership agreement as part of the business formation process. Not only could such an agreement resolve disputes before they occur, but without one the business may be governed by state law.

There are a number of items one might want to include in a partnership agreement. The agreement should include the name of the partnership. Sometimes the business is named after the partners, while other times the partners decide to use a fictitious name. If so, they should make sure that name is not currently being used by another business.

Colorado sellers benefit from executing an acquisition agreement

When a small business in Colorado is being acquired by another business, one item that must be successfully executed is an acquisition agreement drawn up by the seller's attorney. This document protects the seller's interests as much as possible. There are numerous provisions an acquisition agreement should address.

First, the acquisition agreement should state whether the parties are executing a merger, asset purchase or other type of transfer. The sale price and any other relevant financial terms should be included in the agreement. If it is possible for one side or the other to adjust the price, this should be addressed in a manner that ultimately reduces the risk that the price will go down.

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.

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