5 Crucial Areas of Commercial Real Estate Law for Colorado Businesses

Real estate law is a broad and complicated legal area. Colorado is no exception with a tangled mass of statutes on everything from discloser and zoning laws to insurance and contract laws. Whether you lease or own your business location, you will likely encounter a property law issue at some point. Attorney Elizabeth Lewis, MS, JD can help guide you through real estate law at every level before it affects your business. The following post will discuss five crucial areas of commercial real estate law for Colorado businesses.

  • Landlord/Tennant Laws
  • Disclosure Laws
  • Zoning and Land Use Laws
  • Contract Law
  • Insurance Laws

Landlord/Tennant Laws

Whether you own or rent your business space, landlord/tenant laws are designed to protect the rights of both sides who have entered into a rental or leasing agreement. There are numerous areas within these laws, including taxation, right of privacy, payment of rental fees, disclosures, duration of agreements, and right to terminate agreements. As a Colorado business owner, it is essential to comply with state laws in order to prevent violations. It’s a good idea to hire a Colorado-based attorney to advise you on all of your real estate and leasing issues from initial set up to lease/contract review to protecting your assets.

Disclosure Laws

Before you buy or rent a business space, you want to know everything you are getting into. Are there any toxic substances, like asbestos or lead paint? Does the building have energy use restrictions or accessibility inspections? You may have found the perfect location, nestled in the bustling heart of downtown Denver, but it is important to know what you may not readily see. Like other real estate laws, discloser laws vary from state to state and deal with the location, condition, and restrictions of the property. Furthermore, a commercial lease and residential lease differ greatly and are subject to different laws. A small business attorney will review and advise you on existing or potential factors before you are ready to lease or buy a retail space.

Zoning and Land Use Laws

Your real estate choice, whether you operate out of a home office or huge warehouse, will affect your business. Commercial real estate can be divided into several categories, including office buildings, industrial, retail, restaurant, multifamily, undeveloped land, and more. Each of these properties are subject to Colorado state zoning and land use regulations.

Besides determining taxation, these laws define and enforce how a property is used. As a business owner, you already have a checklist a mile long when it comes to choosing your location – rent or buy, physical space, length of lease, affordability, renovations, maintenance, competitors, specifications for signs, accessibility, and much more. Learning that you must apply for rezoning to the local board is not something you want to add your list, and it does not guarantee that your application will be accepted. With the expert advice of an attorney, you can navigate through these real estate laws in order to select the perfect location.

Contract Law

After you have decided whether to buy or rent, reviewed the terms of disclosure, and confirmed zoning, you will enter into a contractual agreement. Specifically worded and structured, these legally binding documents are meant to stand up to any challenges by a landlord, tenant, or outside entity. Many savvy business owners have agreed to the terms of a contract only to fall victim to some unforeseen loophole or unintentional breach that leads to litigation. In this event, an attorney will represent you and help protect your business.

Insurance Laws

Based on the space you occupy and the business you operate, you are required to have certain insurance. This is to protect your investment and cover any property loss or liability issues. The type(s) of insurance you purchase depends on your status as lessor or lessee, the number of employees you have, as well as any building ordinance or state laws. In the unfortunate event of an accident, burglary, fire, or other disaster, additional insurance can help to cover the aftermath of damage to your business. A small business attorney can help you decide what coverage is right for you.

If you are a landlord or a tenant who needs help with Colorado commercial real estate, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

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Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
3773 Cherry Creek North Drive, Suite 575
Denver, CO 80209
720-258-6647
Elizabeth.Lewis@eclewis.com

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4 Important Things To Do Before Opening a Retail Store

Dreaming of opening your very own boutique, an artisans shop, or even a small franchise? There are a multitude of important considerations before you jump into the vibrant mix of Denver retailers. And, just when you think you have done your due diligence, you may encounter unforeseen obstacles. Whether it is an issue with a contract or agreement, choosing the right business entity, dealing with wholesalers, managing staff, or marketing your product, a small business attorney will help keep you on track. This post will cover four major parts to starting your own small retail business.

  • Product
  • Plan
  • Location
  • Finances

Product

You likely already know what you want to sell before you explore many other important factors. A working knowledge and passion for your intended product are great, but they do not guarantee success. Conducting research in order to gauge the demand for your product and keeping current on sales trends are essential to your potential for profit. The U.S. Census Bureau publishes retail trade reports every five years. These can help you measure the demand for your products.

Also, establishing relationships with product suppliers or wholesalers requires agreements and contracts, which a small business attorney will help you navigate.

Plan

Your product determined, it is time to create a comprehensive business plan. This will include a detailed description of your inventory, target customers, how to meet the needs of target customers, competition, and advantages you have over the competition. You will need to provide details about the organizational structure of your store and design a marketing strategy. Deciding on a business structure (i.e. sole proprietorship, partnership, corporation, limited liability company, etc.) will determine which tax forms you are required to file. An attorney provides tax advice and representation in the event of any audits, penalties, or other tax issues, so you should establish a relationship with a Colorado small business attorney before you file any forms with Colorado or the federal government.

Even with the best laid plans, one bad customer experience shared via social media can close your newly opened doors. A good small business attorney will work with you to develop a solid online marketing strategy as well.

Location

As with your product and plan, you will need to research potential locations for your business. Whether it is best suited for Denver’s creative Art District on Sante Fe, eclectic Union Station, or historic Larimer Square, you will want to select a property that meets your needs and budget. Your research may entail searching public records to see how a location was previously used, analyzing the foot traffic and demographics of the neighborhood, and finding a location that is visible to your customers and consistent with the image you want to project. Your attorney will assist in every aspect of your business formation from finding the ideal location, entering into lease agreements, hiring employees, drafting company documents, and filing the required state and federal paperwork.

Finances

Determining all of the expenses your business may incur when starting out will help you to spend more wisely and begin earning sooner. Plan for rent and operation expenses, such as security deposit, utilities, and staffing. Figure out if you will need to make property improvements and customizations, which are associated with a multitude of costs, including construction, furniture, fixtures, equipment, and office supplies. There are also expenses related to technology and communications (computers, phones, internet, point of sale (POS) terminals, card readers, scanners and printers), inventory, and marketing/advertising. Other required fees come with licenses, permits, taxes, and registration. Beyond borrowing money or obtaining a commercial loan, there are numerous options for small business loans. The Small Business Administration (SBA) offers several of these loan programs for entrepreneurs. Regardless of the type of financing, a small business attorney will review the written agreements and interpret the terms in order to avoid misunderstandings or defaults.

If you are starting a retail store and need an attorney, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Attorney. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
3773 Cherry Creek North Drive, Suite 575
Denver, CO 80209
720-258-6647
Elizabeth.Lewis@eclewis.com

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Classifying Your Workers and Why it is Crucial to Your Small Business

This week, we are going to dive into some details on classifying your workers and why it is crucial to your small business. Why? Because it is important for all Colorado small business owners to understand when they can call someone a contractor, and when that person is really an employee. Without this understanding, it is fairly easy to wind up on the wrong side of the law.

First, let’s define what we mean by Worker Classification and explain why it is important to all employers, not just small business owners.

Classifying your workers correctly means understanding if they are independent contractors or employees so that you can avoid breaking the law with regard to federal and state employment tax. It also means you can determine if you are following the Fair Labor Standards Act (FSLA) with regard to the individual worker.

Determine If Individuals Providing Services For Your Small Business are Employees or Independent Contractors

If individuals providing services for your small business are employees, you pay taxes on their earnings. If the same individuals are independent contractors, in most cases, you don’t. You may also have other obligations to employees that would not apply if the worker were an independent contractor. The temptation to call some one a contractor when he or she is really an employee is strong, but it is not worth it under any circumstance.

Let’s take a look at the rules, so you can feel confident about when someone can legally be classified as an independent contractor. For the sake of brevity, we are going to focus on how the IRS defines an independent contractor vs. a common law employee. There are different classifications of employee, and you should consider speaking with a business attorney if you think you may have workers who fall under these other categories (ex: statutory nonemployee).

Classifying a Worker as an Independent Contractor

The IRS provides the following insight:

The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.

They recommend the following test to determine if someone is a common law employee, but maintain there is “no magic formula” for knowing if someone is an employee or independent contractor:

  1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
  2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
  3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

If you have tried to apply these test questions to your specific situation and are still not sure how to classify a worker, the IRS has a form you can submit and they will review on your behalf. Once they set the worker’s status, it becomes official, so you may want to ask a business attorney to review the form on your behalf before your submit it, if your goal is to establish that a worker is a contractor and not an employee.

What About the the Fair Labor Standards Act?

Most small business owners are at least aware that there are important differences between contractors and employees when it comes to paying State and Federal employment taxes, but many do not realize the classification of an employee also impacts the employer’s legal obligations under the Fair Labor Standards Act. First, a quick reminder of what the Fair Labor Standards Act is. Wikipedia gives a good explanation and some history:

The FLSA introduced the forty-hour work week, established a national minimum wage, guaranteed “time-and-a-half” for overtime in certain jobs, and prohibited most employment of minors in “oppressive child labor.”

If you have individuals who are performing work for you, you need to know if you owe them minimum wage, and time-and-a-half in compliance with the FLSA statute, or if you can claim an exemption. The easiest way to be exempt from the FLSA rules is to make sure the worker can be categorized as an independent contractor. That doesn’t mean calling someone an independent contractor when he or she isn’t. The IRS is not playing games when it comes to miss-classification:

If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker.

If you think you may have mistakenly been paying someone as an independent contractor, you can qualify for forgiveness under a Relief Provision, but you have to do so before the IRS calls you out. If you think you may have made a mistake in this regard, talk to an attorney sooner than later. The expense of being caught is much greater than the expense of getting an attorney to help you now.

If you need help classifying your workers or understanding why it is crucial to your small business to know if a worker is an employee or an independent contractor, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
3773 Cherry Creek North Drive, Suite 575
Denver, CO 80209
720-258-6647
Elizabeth.Lewis@eclewis.com

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7 New Business Essentials in Colorado Employment Law

7 New Business Essentials in Colorado Employment Law

Before you hire your very first employee, or think about expanding your newly growing empire, follow this checklist to ensure you are in compliance with the laws and regulations of the Colorado Department of Labor and Employment. A business attorney can add peace of mind and support during the start-up, expansion, and life of your business. This post includes seven essential items on your new business checklist.

  • Register for an unemployment account
  • Report new hires
  • Verify workers’ compensation coverage
  • Submit employment verification
  • Verify wage and hour law compliance
  • Ensure proper worker classification
  • Display workplace posters

Register For an Unemployment Account

As a business owner, you are required to register for an unemployment account with the Colorado Department of Revenue and/or Colorado Department of Labor and Employment. You will need to obtain an unemployment account number through the labor department and begin paying employer premiums through a quarterly premium- and wage-report process. This funds the payment of unemployment benefits, and random audits may be conducted to verify appropriate unemployment insurance. An attorney will represent and assist you through this process.

Report New Hires

You have 20 calendar days to report new hires with the State Directory of New Hires (SDNH). This includes newly hired employees, rehired employees, and contractors. An attorney will further breakdown all of the steps and provide critical advice on employment laws from drafting employment or contractor agreements to hiring minors and out-of-state employees.

Verify Workers’ Compensation Coverage

Colorado law requires that you have workers’ compensation insurance as soon as you hire your first employee. Your insurance policy is meant to protect you, your business, and your employees when injury or illness takes place due to workplace circumstances, so the state requires you to verify workers’ compensation coverage. The expense and effort of meeting employment verification and examination requirements is an ever-present challenge. An attorney will provide representation in the event of any workers’ compensation audits, citations, or other liability issues.

Verify Wage and Hour Law Compliance

You can avoid penalties, damage awards, and litigation by understanding wage and hour compliance under the Fair Labor Standards Act (FLSA) and the Family Medical Leave Act (FMLA) among others. An attorney will help you verify wage and hour law compliance. Wading through the numerous laws and regulations associated with Colorado’s wage and hour laws, giving practical financial, tax, and benefits advice in order to best determine worker status, wages, minimum wage, overtime pay, record-keeping, and youth employment standards is more easily (and accurately) accomplished with the help of a Colorado small business attorney.

Ensure Accurate Classification

There are many issues to consider when classifying your worker as an employee versus an independent contractor under Colorado law. Whether or not the individual is free from control and direction in the performance of the service or is engaged in an independent trade/occupation/business related to the service are just two of the concepts used to determine the status of a worker. Accurate classification ensures that workers get the proper wages, benefits, and protections to which they are entitled.

Display Workplace Posters

It is mandatory that your business comply with state and federal regulations regarding certain rights and responsibilities, including minimum wage, child labor, worker’s compensation, equal employment opportunity, and unemployment insurance regulations and laws. Many agencies provide posters online for free. Be sure to display workplace posters with the required information in a clear, readable, and unobstructed way.

Whether it is reviewing a contract, hiring a new employee, or navigating state and federal compliance laws, I can guide your new business through the complexities of employment law. Please contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
3773 Cherry Creek North Drive, Suite 575
Denver, CO 80209
720-258-6647
Elizabeth.Lewis@eclewis.com

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3 Important Tax Rules for Relocating Your Small Business

There are a lot of questions you want to ask (and probably have an attorney answer) before you relocate your small business from one State to another. This blog will alert you to three important tax rules for relocating your small business:

  1. the six potential F Reorganization requirements
  2. the relocation rules for your specific form of business
  3. the need (or not) to obtain a new Employer Identification Number (EIN)

Understand the Six Requirements for F Reorganization

Warning – the six requirements are not written in plain English and can be a little daunting. Of all the rules you need to understand, making sure you understand the six requirements for an F reorganization and have met the criteria may be the most important. Why? Because in the case of F Reorganization, the “F” stands for free, as in tax free. Your move may subject you to unnecessary tax burdens if it doesn’t meet the six requirements. I am supplying portions of the IRS code describing each of the requirements below – if you don’t enjoy reading legalese, skip these bullets and go on to the next section.

  • Immediately after the Potential F Reorganization, all the stock of the Resulting Corporation must have been distributed (or deemed distributed) in exchange for stock of the Transferor Corporation in the Potential F Reorganization.
  • Subject to certain exceptions, the same person or persons own all the stock of the Transferor Corporation at the beginning of the Potential F Reorganization and all of the stock of the Resulting Corporation at the end of the Potential F Reorganization, in identical proportions.
  • The assets and attributes of the Resulting Corporation [must be limited] immediately before the transaction)
  • The Transferor Corporation [must be liquidated]

The final two requirements are in place to make sure the resulting reorganization qualifies as a “Mere Change” – simply put, your move really is about moving the business and not about a clever means of evading actual tax obligations.

  • Immediately after the Potential F Reorganization, no corporation other than the Resulting Corporation may hold property that was held by the Transferor Corporation immediately before the Potential F Reorganization, if such other corporation would, as a result, succeed to and take into account the items of the transferor corporation described in section 381(c).
  • Immediately after the Potential F Reorganization, the Resulting Corporation may not hold property acquired from a corporation other than the Transferor Corporation if the Resulting Corporation would, as a result, succeed to and take into account the items of such other corporation described in section 381(c).

Know the Rules for Moving Your Particular Business Form

When you are ready to move your business, you need to know the rules for moving your particular business form to a new state – these rules will vary depending on the form your business operates under, and some are more straight forward than others. The SBA gives a good overview of the rules, but advises, as do I, to talk over your move with an attorney, and to understand clearly the steps you will be expected to take as an LLC, Corporation, sole proprietor, or partnership.

It is likely that you chose your form of business for the tax advantages it offers. If you haven’t had an attorney review your current form of business to make sure you are getting the best tax advantage and legal protections, consider doing so before you make your move. Tax law changes over time. Understand what changes you may want to make before moving your business to a new State with a less than optimal business form.

Obtain a New Employer Identification Number (EIN) – Perhaps

This is another one of those cases where the answer on whether or not you need to obtain a new employer identification number (EIN) is, perhaps. Once again, the need to obtain a new EIN is controlled by your form of business. Gratefully, these rules are a little easier to understand, but they are far from crystal clear. For example, the SBA explains that corporations will not be required to obtain a new EIN if “conversion at the state level with business structure remain[s] unchanged.” If you’re not sure what is meant by conversion, you might not realize that you can keep your EIN.

If you aren’t sure whether or not you need a new EIN after a move, or want want help understanding these 3 important tax rules for relocating your small business, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver Small Business Lawyer. Phone: 720-258-6647. Email: elizabeth.lewis@eclewis.com

Contact Us Today

Law Office of E.C. Lewis, P.C.
Your Denver Business Attorney
3773 Cherry Creek North Drive, Suite 575
Denver, CO 80209
720-258-6647
Elizabeth.Lewis@eclewis.com

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