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Colorado Business Formation Questions & Answers
1 Answer | Asked in Gov & Administrative Law, Business Formation and Business Law for Colorado on
Q: For the state of colorado - I am going to need to open an S Corp. Is it better to start it as LLC or C Corp for few day?

I plan to elect S Corp status within a few days after getting EIN and all. I am curious on how it makes a difference if I start LLC or C Corp given S Corp form will be submitted in a matter of days following.

Kevin Michael Strait
Kevin Michael Strait
answered on Dec 29, 2023

Many people form an S-Corp to take advantage of the personal income tax breaks when paying yourself as both an owner and an employee of the business. The S-Corp election is more accurately called the "subchapter S tax election" and, as you point out, can be used in combination with an LLC... View More

1 Answer | Asked in Business Formation and Business Law for Colorado on
Q: How am I protected and is this something I should look into or is it too good to be true?

So a local small family owned business is asking for my help as a friend, they are offering a 50/50 partnership (technically less cause someone has a 25% share in their S-Corp business) for a cosign on a $30,000 loan that will save their business and bring it back into the green. They are offering... View More

John Michael Frick
John Michael Frick
answered on Apr 7, 2023

You can ask for collateral, like a stock pledge agreement, assignment of accounts, etc.

This type of transaction almost certainly requires an attorney to paper whatever deal is reached. The more complicated; the more it will cost.

1 Answer | Asked in Contracts, Business Formation and Business Law for Colorado on
Q: Setting up a holding company to allow for 100% ownership of future locations

I am opening a brick and mortar location in CO, with investors lined up. Naturally, they will request some equity in the company.

How can I setup a situation where I end up owning the overall brand, so that several years from now I can open additional locations in other states and/or... View More

Kevin Michael Strait
Kevin Michael Strait
answered on Sep 2, 2022

While this reply is not legal advice specific to your situation, the following generalizations may be useful to anyone opening a business in Colorado under circumstances similar to yours.

Selecting a business structure is a key business decision. Business structures can be changed over the...
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1 Answer | Asked in Business Formation and Business Law for Colorado on
Q: Many businesses are creating "staffing agencies" to provide labor only to businesses they own - what are the advantages?

Working in workers' compensation in Colorado, we have noticed recently a large number of businesses creating "staffing agencies" where they provide labor only to their own businesses, not to other client companies (so technically not staffing for our purposes). We had never seen... View More

Kevin Michael Strait
Kevin Michael Strait
answered on Mar 21, 2022

Business strategists and corporate attorneys sometimes recommend wholly-owned staffing subsidiaries. A parent company will own several businesses of the same kind and own a staffing company. This business structure makes sense when there are multiple locations that all operate in substantially the... View More

1 Answer | Asked in Business Formation for Colorado on
Q: I have a masters degree in architecture and have not taken my licensing exams. can i use "architectural designer" title
Kevin Michael Strait
Kevin Michael Strait
answered on Feb 1, 2022

In Colorado, the state government regulates the license of architects through the Department of Regulatory Agencies, under the division of Architect, Engineer and Land Surveyor licenses. There are regulations for architects under C.R.S. § 12-120-401 et seq. Most relevant to you are the laws §... View More

1 Answer | Asked in Insurance Bad Faith, Consumer Law, Business Formation and Business Law for Colorado on
Q: If I own a vehicle and would like to rent it out for profit, can that individual use vehicle themselves for profit?

I charge someone to rent my vehicle. They then use vehicle for Ride Share App then return vehicle after 6hr.

Kevin Michael Strait
Kevin Michael Strait
answered on Jan 31, 2022

I see that you are in West Virginia but asking about laws in Colorado. The Colorado law supports you leasing your automobile to someone who then uses it for profit. Leasing an automobile to another person or business can be done at a profit to yourself (just be sure to tell your CPA about that... View More

1 Answer | Asked in Business Formation and Business Law for Colorado on
Q: I belong to an artist co op that is set up as a not for profit corporation. Can we post "calls for artist" on our web

Currently we find new artists (who are shareholders and purchase their share for $50 when they join. that $50 is refunded to them when they leave) by accepting applications from our website or from artists who come into the gallery, we also find new artists at art fairs. We would like to post a... View More

Kevin Michael Strait
Kevin Michael Strait
answered on Jan 22, 2022

Colorado business can be for-profit, not-for-profit, or a benefit corporation. For-profit corporations and benefit corporations can invite folks from the public to become shareholders, but must obey some fairly complicated rules about advertising stock, publishing a prospectus, and following... View More

1 Answer | Asked in Business Formation for Colorado on
Q: How to move a Nevada LLC to Colorado? I want to preserve the company history and EIN but I don't want in Nevada anymore.

I have a Nevada LLC and I want to move it to Colorado where I now live. I want to preserve the company history, EIN, etc. so not start a new LLC but just migrate it to a new state. What's the best way to do this? I heard creating a new LLC in Colorado and merging the Nevada one into it, but... View More

D. Mathew Blackburn
D. Mathew Blackburn
answered on Mar 30, 2021

Yes.

You can create a new CO LLC and have that LLC acquire the NV LLC. Then merge the two with the CO LLC surviving.

Or

File a foreign registration in CO for the NV LLC. Then convert the CO foreign LLC to a domestic LLC.

Dissolve the NV LLC.

That moves...
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1 Answer | Asked in Tax Law, Workers' Compensation, Business Formation and Business Law for Colorado on
Q: Do I need Workers Comp for a Single Member LLC when it's just me?

I formed an LLC for Photography and it's only me, am I required to get Workers Comp or can I save that?

D. Mathew Blackburn
D. Mathew Blackburn
answered on Jan 8, 2021

No, not required.

1 Answer | Asked in Business Formation and Cannabis & Marijuana Law for Colorado on
Q: can I start a marijuana business as a trust beneficiary
D. Mathew Blackburn
D. Mathew Blackburn
answered on Jun 11, 2020

The fact that you're a beneficiary of a trust will not affect your eligibility to apply for a MED license.

1 Answer | Asked in Business Formation, Business Law and Contracts for Colorado on
Q: How best can 3 individuals located in 2 different U.S. states and the UK form a viable business?

The three of us are all small business marketing coaches, working under individual DBA's and or LLC's. We want to know how best we can merge our resources together into some kind of partnership, business or entity. We're unsure what the best approach is considering the various... View More

Bruce Alexander Minnick
Bruce Alexander Minnick
answered on Feb 3, 2020

Justia is a wonderful free online legal forum established to allow members of the general public to ask general legal questions to experienced lawyers who volunteer their valuable time to do so. Your important small business question is much to important--and too complicated--to be solved online.... View More

1 Answer | Asked in Real Estate Law, Business Formation and Business Law for Colorado on
Q: Where is the Statement of Authority filed? county where the entity is formed or county where the property is located?

My lender is requiring a statement of authorization as my property is owned by my holding company which is a LLC which is wholly owned by myself. They want me to have a certificate of authorization recorded by the county. I don't know which county to file it with and also what this... View More

D. Mathew Blackburn
D. Mathew Blackburn
answered on Dec 29, 2019

It's filed in the county where the property is located. It's the document that verifies that you have the authority to act on behalf of the LLC. Just because you own it does not automatically mean you have the authority to make decisions on behalf of the LLC. Notary's county does not matter.

1 Answer | Asked in Business Formation for Colorado on
Q: My trade name exp in Colo in 2009. In Good Standing for Art of Org in Colo. Do I need file a a new trade name?

I went on the Colo Sec State site and do not see renew option for my trade name, just the ability to correct info for historical purposes.

Curious about penalties? Thank you.

D. Mathew Blackburn
D. Mathew Blackburn
answered on Jun 17, 2019

Only if you are doing business under a different name than that of your LLC articles of organization.

1 Answer | Asked in Business Formation for Colorado on
Q: I own a commercial building in Longmont, Colorado and am applying for a site plan waiver and change of use. See below:

Part of the awning and cement steps in the original established main entrance to the building (built in 1928), encroach slightly on the line for public right-of-way. As far as I know, the steps and cement awning were part of the original construction in 1928. In my pre-application, the city... View More

D. Mathew Blackburn
D. Mathew Blackburn
answered on Jun 12, 2019

They can require anything until you challenge their authority. You're going to want to get an attorney on this one. Good luck.

1 Answer | Asked in Business Formation for Colorado on
Q: If I am already incorporated in the State of Colorado, what do I need to do to get business license in Nevada?

I want to do business in the State of Nevada with an incorporated company in Colorado. Is the process as simple as applying for a tax license in Nevada? I plan on registering as a boxing manager and I want to do things properly.

D. Mathew Blackburn
D. Mathew Blackburn
answered on May 19, 2019

File on https://www.nvsilverflume.gov/home to operate as a foreign entity in NV and check local licensing requirements for counties and cities.

That will allow your CO business to operate in NV lawfully.

1 Answer | Asked in Business Formation and Business Law for Colorado on
Q: Do i need to collect sales tax if im a service provider
Andrew John Contiguglia
Andrew John Contiguglia
answered on Apr 12, 2019

No. The collection of sales tax only applies if you are selling goods.

1 Answer | Asked in Business Formation for Colorado on
Q: If I own a business with my husband (partnership) and I want out of the business can I sell my half w/o consent

Nothing was signed or stated prior discussing anything about selling the business. And if I can legally sell my part of the business w/o his consent would I then have to give him half of the money I sold it for if we got a divorce - were in Colorado

D. Mathew Blackburn
D. Mathew Blackburn
answered on Feb 7, 2019

Technically you could sell your ownership interest as there is no restriction because there is no operating agreement.

Colorado is an equitable separation state so it's not automatically 50/50,but yes the cash or the ownership of the entity would both be marital property subject to...
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1 Answer | Asked in Tax Law, Business Formation and Business Law for Colorado on
Q: ISO: business/tax lawyer

Back taxes for 2 separate corporations that were started in Montana. Seeking a lawyer in Denver Colorado as that is where the i currently reside. Does the sought out lawyer in Colorado need to have jurisdiction in Montana in order to help me?

D. Mathew Blackburn
D. Mathew Blackburn
answered on Oct 20, 2018

Tax is not restricted to only attorneys that are licensed in the state. I have cases in about 10-11 different states. I'd have to go count them to be sure.

A Colorado attorney can help you with this issue.

1 Answer | Asked in Business Law, Tax Law and Business Formation for Colorado on
Q: Purchasing an existing company, trying to figure out where to incorporate for best tax advantages.

I am from Colorado. I am purchasing an existing company in TX. That company will be manufacturing product in TX and I will have a partner there. The product will be built and shipped from that third party manufacturer to likely all 50 states. My question is when purchasing the company, can I set up... View More

D. Mathew Blackburn
D. Mathew Blackburn
answered on Mar 24, 2018

Generally the best approach is to register in the state of operation. Also be aware you will pay income taxes to CO regardless of where you set up the LLC because an LLC is a passthrough entity and you are a CO resident.

You need to retain a business/tax attorney that can advise you on the...
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1 Answer | Asked in Business Formation for Colorado on
Q: Registered business name in Oct. 2017 with no EIN yet. Are we required to file even though we are not in business yet?

It’s a partnership llc

D. Mathew Blackburn
D. Mathew Blackburn
answered on Jan 4, 2018

Partnerships must file a Form 1065 each year regardless of income or loss. If you don't have an EIN yet you can simply write "Applied For" on the EIN block. You should get an EIN as soon as possible.

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