Business Law/Contracts

Click for information concerning forming a limited liability company in Colorado.
Click for information to consider for your operating agreement in Colorado

Partnerships are not often used as an entity for business operations. If you are a partnership, you should consider the advantages of operating as a limited liability company or corporation.

Sole proprietorships are not often used as an entity for business operations. If you are a sole proprietorship, you should consider the advantages of operating as a limited liability company or as a corporation.

Working with family businesses is very rewarding. One of the more challenging concepts to resolve is the succession of family businesses. Another challenging concept is the dynamic of family members working together in the family business.

A close corporation is a corporation that has a small number of owners and, therefore, is not subject to the laws and regulations that large public corporations are.

A buy-sell agreement governs what happens if there are more than one owner and one of the owners wants to sell his or her ownership interest in a company. Generally, the provisions of a buy-sell agreement are triggered when (1) an owner would like to sell his or her interest during his or her lifetime, or (2) an owner passes away.

The operating agreement is the governing document for limited liability companies.
Click for information to consider for your operating agreement in Colorado.

Employment agreements are used to protect both employers and employees.

An independent contractor is someone who performs services or provides goods to another pursuant to an agreement. An independent contractor is not an employee, a partner, or a joint venture. If the independent contractor is an individual and provides services for your company, you must be very careful that the person is not considered an employee by the Internal Revenue Service because there may be substantial penalties and interest that accrue if you improperly classify an individual as an independent contractor instead of an employee. The Internal Revenue Service publishes guidelines to help you analyze if a person is an employee or an independent contractor.

Confidentiality agreements are important for key employees and others who have access to a company’s confidential information to sign to protect a company’s confidential information.

For non-competition agreements to be valid in Colorado, they must be reviewed to see if they meet certain statutory requirements. If they meet those statutory requirements, they must also be reasonable as to duration and reasonable as to geographical area to be binding.

A business must protect its trade secrets and proprietary information by keeping them confidential and by written agreements.

A license agreement is where the owner of property (licensor) allows someone to use the property (licensee) for a fee but the ownership remains with the licensor. Examples of license agreements include intellectual property, software, trademark and brand licensing.

By law, the franchisor is required to provide information and documents to the franchisee which allows the franchisee to make an informed decision whether to become a franchisee.

Construction law is a very broad area of the law involving building construction and related areas. Legal matters involve contract law, bonds, guarantees, sureties, liens, security interests, claims, arbitration, environmental matters, and health and safety. Participants in construction law may include owners, builders, financial institutions, surveyors, architects, engineers, planners and construction workers.

A mechanic’s lien provides a mechanism for a subcontractor who supplies materials or labor which benefits real property to pursue an action against the real property if not paid. The subcontractor takes the necessary steps to file a lien against the real property and may foreclose against the real property. There are important time deadlines that must be met or the lien right is lost.

If your business is owed monies, sometimes all it takes is a letter from an attorney to prompt payment. Other times, a lawsuit is required to collect the debt.

Reviewing and Determining Creditor’s Claims.

Someone who owes you monies may file bankruptcy. The debtor’s bankruptcy should be carefully reviewed to determine what is the most practical and cost-effective course of action.

Litigation may be required to resolve a debt owed to your business by a debtor who has filed bankruptcy, if the amount owed justifies the cost of attorney fees in the bankruptcy litigation.

When you ask for money, it is called damages. If you request that the court order certain relief other than damages, the relief requested is called equitable relief. The most common types of equitable relief are an injunction and specific performance. When you request an injunction you request a court order that someone either stop doing something or order that someone affirmatively do something. When you request specific performance, you request that someone perform an act, which usually involves performing the provisions of a real estate contract by forcing the seller to sell the real estate to the purchaser. Other types of equitable relief besides injunction and specific performance include accounting; rescission; declaratory relief, constructive trust, and estoppel.

Major disputes with partners may be very emotional and difficult to resolve because of the dynamics of the situation. Although partners may have a tendency not to communicate when major problems occur, the best way to resolve the problem is to open up the lines of communication.

Mediation is a process where parties submit their dispute to a mediator who tries to help the parties reach a settlement agreement between the parties. Mediation is not binding on the parties. If mediation is not successful, either party may move forward by filing a lawsuit or filing for arbitration to resolve the dispute.

Arbitration is a process where parties submit their dispute to a single arbitrator (or more than one arbitrator if the amount in controversy is a substantial amount) who makes a decision that is binding on the parties. Arbitration is used in place of a trial to a judge or a trial to a jury.

To protect and enforce their legal rights, businesses must at times pursue litigation. At other times, businesses must defend themselves from lawsuits.

Each person has his or her own negotiating style. A thoughtful negotiating strategy should be developed which will produce the best results.

Some contracts are prepared and signed which are not as clear as they should be and require interpretation.

Contract disputes may occur for various reasons, including one person breaching the agreement or there is a disagreement about what the contract means because of ambiguous wording.

If a party signs an agreement and fails to perform the provisions of the contract, the other party may be required to take steps to enforce the provisions of the contract.

Except for certain contracts which the law requires to be in writing, oral contracts are as binding as written contracts. However, the reason you should reduce an oral contract to a writing is because you want to be able to prove the terms of the contract if a person falsely states what the terms of the oral contract were.

Parties should enter into written agreements instead of relying on a “handshake.”