How Can I Avoid Getting into Legal Problems When Starting a Business?

Colorado laws outline many requirements for doing business in the state. There are also federal requirements that you may want to consider when setting up an entity. Lawyers from a law firm in Colorado say it’s crucial to familiarize yourself with these legal nuances to avoid getting into challenges before, during, or after starting a business.

The process can be difficult and lengthy, involving several crucial steps. Skilled business lawyers provide a checklist of the first legal requirements to get you started on building a strong foundation for a successful business:

Choose a Business Idea

You can’t form a business if you don’t have an idea of what you want to do to generate income. At this stage, new business formation attorneys in Denver advise that you consider your interests, skills, available resources, and the reasons for forming the business. It’s also essential to evaluate the likelihood of success based on community interests and needs.

Starting a business in Colorado can be demanding, so staying excited and highly motivated is a huge component of your success. Once you refine your business idea, evaluate industry-specific guidelines for business formation. Business lawyers can provide more insights.

Draft a Business Plan

The next step is to put your business idea into writing by drafting a business plan. It acts as the road map that helps you process your long-term goals and how to achieve them, leading you to profitability. With this blueprint, you can present the finer details of your business ahead of time, enabling you to better prepare for the challenges you may encounter.

Denver new business formation attorneys can help you create a detailed business plan that addresses the following key issues:

  • The product or service your business will offer
  • The cost of setting up the business and where the funding will come from
  • The target audience and its approximate size
  • Your main competitors
  • Company structure
  • Your competitive edge
  • Management hierarchy and planned marketing strategies

A business plan is essential in business registration, forming partnerships, and determining an exit plan. Depending on how detailed it is, it can also help you secure funding from investors.

Name Your Business

A business can’t operate in Colorado without a legal business name. However, no two companies can register the same or confusingly similar names. Your lawyers can help you complete a name search to ensure it’s available on Colorado’s Secretary of State’s website. You can form your business entity using the name if it is available.

A name search and registration is vital to ensure you have legal rights and protections to operate your company under that name to avoid disputes with other businesses. Once you register the business name, you can use it to open social media accounts or set up a website where your clients can find you online to increase visibility and promote your brand.

Determine the Most Suitable Legal Business Structure

The business structure is a legal aspect that affects how your business runs and pays taxes to the Internal Revenue Service (IRS). It also determines how much risk you can take personally if the business runs into legal or financial problems. New business formation lawyers in Denver add that the business structure also determines the reporting you need to do and how to get funding. Some business structures you can consider are:

  • Sole proprietorship
  • General partnership
  • Limited Liability Company
  • Subchapter “S” Corporation
  • Subchapter “C” Corporation
  • Non-profit organization

After determining the business structure, you must file the proper organizational documents and pay the required government fees at the office of the Secretary of State.

Register Your Small Business

If you decide to run your business as a sole proprietorship, the law doesn’t require registering it with the Colorado Secretary of State. However, you must file a Statement of Trade Name of an Individual with the State Secretary in Colorado and pay the required fees. You’re required to do the following for other types of business structures in addition to paying the necessary fees:

  • General partnership: File a Statement of Partnership Authority
  • Limited Partnership: File a Certificate of Limited Partnership
  • Corporation: File Articles of Incorporation
  • Limited Liability Company (LLC): File Articles of Organization
  • Limited Liability Partnership: File Statement of Registration
  • Limited Liability Limited Partnership: File a Certificate of Limited Partnership and Statement of Registration
  • Limited Partnership Association: File Articles of Association

Apply for an Employer Identification Number

New business formation attorneys in Denver say that a business must have an Employment Identification Number before hiring and paying employees. The 9-digit number is unique to individual businesses, almost similar to a Social Security number for a company.

You will need an EIN when opening bank accounts, applying for loans, filing tax returns, and obtaining licenses. Your business lawyers can help you apply for the number from the Internal Revenue Service.

Investigate Trademark and IP Protections

It’s crucial to protect your business creations through trademark and IP protections. Registering for various IP protections can prohibit other businesses or individuals from misusing your intellectual property or benefitting from them at your business’s expense. Consult extensively with your lawyers to evaluate the protections that apply to your entity.

A Skilled Business Lawyer Helping You Navigate the Legal Steps of Business Formation

Setting up a business in Colorado is an intricate process that entails various legal requirements to establish it. Skilled new business formation attorneys in Denver can guide you through careful planning to help you establish a strong foundation for the new entity. They can handle the paperwork at the various stages to ensure you complete everything accurately.

The Ragab Law Firm, P.C., has knowledgeable business lawyers who can help you form a new business and provide legal representation on matters concerning your business after formation. Call us at 720-776-8853 to schedule a FREE consultation.