Denver Business & Commercial Law Blog

How can non-solicitation agreements protect your business?

On behalf of Virtual General Counsel LLC posted in Contracts on Friday, September 18, 2020.

You want your employees to have a good relationship with your clients. That only benefits you and helps you grow your business. But what happens when one of those employees leaves and moves to a new business – or starts of one their own? They may have clients who are loyal to them and want to follow them. That can mean a big loss of income for you.

You can help curtail these losses with non-solicitation agreements. This is a key employment agreement that it may be wise to ask all new hires to sign.

Is your small business a 'micro-business?'

On behalf of Virtual General Counsel LLC posted in Business Formation on Tuesday, September 8, 2020.

You may have heard the term "micro-business" and wondered how that type of enterprise differs from a small business. Basically, micro-businesses are a subset of the small business community. However, there's are no precise or agreed-upon criteria for a micro-business.

The U.S. Small Business Administration (SBA) Office of Advocacy defines a micro-business as any business with nine or fewer employees. They make up over three-fourths of all businesses, even though they employ a much smaller share of the labor force (under 11%). The so-called "FIRE" industry (finance, insurance and real estate) comprise the vast majority of micro-businesses in this country.

How do Uniform Commercial Code filings work?

On behalf of Virtual General Counsel LLC posted in Mergers & Acquisitions on Tuesday, August 25, 2020.

A Uniform Commercial Code (UCC) filing is a type of legal action that a creditor takes to attach a lien to a business. This process serves as an official notice that they have an interest in the debtor's personal or commercial property.

Creditors often require businesses to put up collateral before they can secure financing. If a company can improve its credit history, then it allows them to increased opportunities to gain more credit.

When might you want to set up an S-corp?

On behalf of Virtual General Counsel LLC posted in Business Formation on Tuesday, August 11, 2020.

Many business owners choose to set up their business as a limited liability company (LLC) because it allows them to report and pay their tax obligation along with their personal return. Business owners also like that an LLC comes with built-in liability protection that keeps potential creditors' hands off their assets. It's not uncommon for many business owners to decide to form other business entities to minimize their tax burden. An S Corporation is a typical formation that business owners select.

An S corporation is a type of elected tax status. They can have as many as 100 shareholders, whereas an LLC can only have a handful of them. S-corp owners may enjoy a self-employment tax break provided that they pay themselves a reasonable salary. The same options don't exist if you set up an LLC. These business owners can file their taxes as S-corps, though.

How to negotiate a contract with a new hire

On behalf of Virtual General Counsel LLC posted in Contracts on Tuesday, July 28, 2020.

As a small business owner, there will be times when you bring new talent into your organization. Not only is this an exciting time for your company, but the right hire has the potential to make your life easier.

Before this person becomes a member of your team, you must deal with contract negotiations. And as you probably know from past experience, this is often easier said than done.

Questions to answer alongside a potential business partner

On behalf of Virtual General Counsel LLC posted in Business Formation on Tuesday, July 14, 2020.

You're all set to go into business with a partner. While you're confident that things will work out, you're likely to have some reservations. It's natural when making such a big decision.

Rather than blindly jump into the partnership, the two of you should get together to answer key questions and address any potential concerns. These questions are a good place to start:

Will we each own 50 percent of the business?
What title will both of us hold?
What are our individual responsibilities?
Will one or both of us have control of the company finances?
What's the best way to deal with future disputes?
What type of business structure is best?
What system will we use to ensure that both partners are living up to their side of the agreement?

The art of negotiating small business mergers in Denver

On behalf of Virtual General Counsel LLC posted in Mergers & Acquisitions on Tuesday, June 30, 2020.

The deft handling of mergers and acquisitions is an art that many small business owners in the Denver area fail to master. Although they realize that merging with other businesses helps them achieve success, they tend to avoid this complex part of business growth.

To remain relevant to consumers and continue an upward growth trend, learning more about mergers, and acquisitions as well is vital. You can invest the time to increase your knowledge of these issues, but many choose to rely on legal professionals for assistance. A law firm with a history of handling successful mergers can help you on at least two fronts.

Jointly owned businesses may benefit from a founders agreement

On behalf of Virtual General Counsel LLC posted in Business Formation on Tuesday, June 16, 2020.

Many small startups in the Denver area are born out of the contributions and ideas of several individuals. In most cases, the co-founders of a new business agree on many critical principles at first. However, disagreements can arise over time, putting the business at risk of failure.

One of the ways attorneys like us help entrepreneurs with their business formation efforts is by suggesting personalized startup strategies. When more than one person starts a business, we often suggest creating a founders' agreement. This tool can go a long way in helping founders make decisions early on to avoid problems once a business begins to flourish.

Contracts: Should small businesses offer severance packages?

On behalf of Virtual General Counsel LLC posted in Contracts on Tuesday, June 2, 2020.

Severance packages are usually associated with massive corporations, but small business owners may also benefit from offering severance agreements. Sometimes, employers and employees agree on severance packages after employment begins or when a termination occurs. Other times, severance provisions are addressed in employee contracts signed at the beginning of the working relationship.

If you are reading this, you probably don't run a massive corporation but are a small business owner operating in Colorado. As such, you may not be able to afford to offer all your employees severance pay. However, offering severance packages may be worth your while.

Business formation -- the pros and cons of corporations

On behalf of Virtual General Counsel LLC posted in Business Formation on Monday, May 18, 2020.

One of the earliest decisions you will make during your business formation efforts is choosing its legal structure. While it may sound like a relatively simple step, the structure you choose now will influence your business activities going forward. Making an informed decision about your structure early on will save you from problems later.

Many Colorado entrepreneurs choose to structure their business as a limited liability company (LLC). This structure does offer many advantages such as protection from liability and tax benefits. However, corporations also offer valuable benefits.

Attract investors and employees: Corporations can issue stock, which attracts those interested in investing in a business. Offering stock options to staff members can also attract quality employees.
Established management: Since corporations have an established management system, they often operate more smoothly than other legal structures.
Liability protection: Like an LLC, a corporation protects business owners from legal liability to a limited degree.

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