Three Types of Business Development Legal Advice Your Home Business Needs This Year

Three Types of Business Development Legal Advice Your Home Business Needs This Year

With the start of every new year, home based business owners have an opportunity to reflect on the success of their business. Some home business owners have to think about throwing in the towel, while others have to deal with unexpected growth. If you are planning for growth, you should consider obtaining business development legal advice before you launch plans to obtain new clients and customers for your home based business this year.

Home Business Growth Legal Help

Home business owners wear many hats. The hours can be painfully long as you work to fit it all in; bookkeeping, record keeping, production, marketing. For many small business owners, sales calls are a dreaded chore. People who struggle with finding and closing prospective customers sometimes seek a coach or course to help them overcome their reluctance to sell, but another important component of business development planning is to seek business growth legal help before you implement new sales goals for the year. Why? There are several pitfalls you can avoid by talking to a Colorado small business attorney before you take steps to grow your Colorado home based business. Here are three things that come with growth which require the advice of a small business lawyer:

  • Independent contractor contract
  • Non-disclosure agreements
  • Review of company documents

The Independent Contractor Contract: Avoiding Liability

The purpose of creating an independent contractor contract between your business and someone who performs work for you is to establish that the worker is not an employee. For many home based business owners, the costs of employing workers is too high, both from a paperwork and planning perspective, and from a tax liability perspective. But a poorly worded independent contractor contract can rob a small business owner of the benefits of working with independent contractors. Furthermore, certain ways of assigning work to an independent contractor can bring into question the validity of his or her independent contractor status.

The penalties for treating employees like independent contractors are severe. A good, local small business lawyer will not only review your independent contractor contracts, she will also ask you to explain how you assign work to your contractors, how they are paid by you, and how you manage their tasks and assignments.

Non-Disclosure Agreements: Protecting Your Business

It may sound like overkill – if you are a small, home based business, why would you need a non-disclosure agreement? Confidentiality or non-disclosure agreements are often associated with new and potential employees. These agreements protect your proprietary information. But small business owners, especially those who consult for clients, can benefit from having new customers sign non-disclosure agreements as well. If you have worked hard to create your business, you don’t want to give it away to a client who may become a competitor. Talk to your Colorado small business attorney about the benefits of having your clients, not just your employees and contractors, sign non-disclosure agreements.

Review Company Documents to Save Money and Heartache

It’s a new year, and you undoubtedly have new business goals. One of the most important things you can do at the start of this year is meet with a Colorado small business lawyer to review company documents. Does your business structure still make sense? Are your non-disclosure and other legal documents still protecting you as originally intended? Are you in compliance with Federal tax rules and Colorado state law? Will you be impacted by any new Colorado or federal business laws this year?

An in-person business planning consultation with a Colorado business attorney will provide you with advice relevant to your Colorado home business that no legal help website can. Talking to a small business lawyer on an annual basis can do as much toward helping business owners succeed in the long-run as a great new product or fantastic sales can in the short-term.

If your home business needs business development legal advice, 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
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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Colorado Employment Law – 4 Regulations You May be Breaking

Colorado Employment Law – 4 Regulations You May be Breaking

The purpose of employment law is simple in theory: to protect employees’ rights and define employers’ responsibilities and obligations. However, as small business owners know, putting those principles into practice and adhering to the thousands of federal and state statutes that cover everything from equal opportunity and fair pay to physical well being and safety can be very challenging.

Ironically, this can be especially true for employers who are trying to create an environment that allows employees more freedom. In many cases, bending the rules may mean you are breaking the law. And while your intentions are good, there can still be legal consequences including lawsuits from employees and penalties from the government.

Common Misconceptions About Employment Law

Is your small business unintentionally breaking Colorado employment law or federal law? Some of the most common violations include:

Flexible lunch breaks
In Colorado, the regulations around breaks and meals apply to employees and employers covered by the Colorado Minimum Wage Order. This order regulates wages, hours, working conditions and procedures for some employers and employees in these industries: Retail and Service, Commercial Support Service, Food and Beverage, and Health and Medical. It stipulates that “Employees shall be entitled to an uninterrupted and ‘duty free’ meal period of at least a thirty minute duration when the scheduled work shift exceeds five consecutive hours of work.” Consequently, if you allow employees to skip lunch so they can leave work earlier, you are in violation of the order.

Allowing employees to work longer days but not paying overtime

Colorado law specifies how employees are to be paid for overtime. This includes that they “shall be paid time and one-half of the regular rate of pay” if they work more than 12 hours in one work day. This is true whether it is at your request or by their own choice. So, if you give employees the freedom to work longer days but fewer of them, and any of those longer days exceed 12 hours, you must compensate them with overtime pay. Many small business owners incorrectly believe that if an employee chooses to work long days, overtime pay is not required. That mistake can result in penalties and being required to provide back pay.

Incorrectly classifying employees as independent contractors

The idea of classifying someone who does work for you an “independent contractor” can be appealing both to them and to you in some instances. However, incorrectly labeling a person that way can lead to legal issues. Generally speaking, a person is an independent contractor if you have the right to control or direct the output of their work, but they get to determine how it will be done. It’s a definition with plenty of room for interpretation, so getting some employment contract legal help if you have any questions or concerns is a good idea.

Excusing your staff from sexual harassment training
You may believe that your staff understands what sexual harassment is and will not commit it, and therefore you choose not to provide training that will take time out of their busy day. However, the State of Colorado Civil Rights Commission Rules and Regulations encourages employers to “take all steps necessary to prevent discrimination, including harassment, from occurring, such as: affirmatively raising the subject, expressing strong disapproval, promulgating and distributing an anti-discrimination policy, training, developing appropriate sanctions, informing affected individuals of their right to raise and how to raise the issue of discrimination, and developing methods to sensitize all concerned.” If you choose not to make training available, you clearly are not following this directive and may be opening yourself up to legal issues, especially if an incident occurs.

Complying with Employment Law – Do Your Homework

Colorado employment law and federal employment law are complex. However, the regulations are well documented. By doing some research on sites like the Colorado Department of Labor and Employment web portal and www.usa.gov/labor-laws, you can develop a general understanding of what is required of your small business. That foundation will serve you well when you then seek additional guidance from a Denver business attorney.

If you need help interpreting Colorado employment law, or determining whether or not you are in compliance with federal and state statutes 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
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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Contract Law: Your Checklist for Producing Strong Legal Agreements

Contract Law: Your Checklist for Producing Strong Legal Agreements

Operating a small business typically involves the need to reach agreements with other parties. This may include everyone from partners to vendors. To protect yourself and ensure that the other party follows through with their part of the agreement, it’s critical that you document what’s been agreed to in a legal contract. Consequently, even though you may look to a Denver business attorney to draft the document, it is important that you have a general understanding of contract law.

Key Considerations for Drafting a Contract

As you work with the other party and your lawyer to produce a contract, keep these contract law best practices in mind:

  • Everything must be in writing. No matter how comfortable you are with the other party, it is essential that you put all aspects of your agreement into a written contract. It may seem like some of the details are inconsequential and can be covered by a handshake, but sometimes it’s the smallest things that come back to haunt you later. It’s especially tempting to take certain things “on faith” if they come up after a written agreement has been drafted. However, you are much safer revising the contract.
  • Be sure you are dealing with the right person. It’s not uncommon to put a great deal of time and effort into creating a contract only to find out that the person you’ve named in the document doesn’t actually have the authority to execute the agreement. Then, unfortunately, you are likely faced with a whole new set of review and revision iterations that not only eat up more of your time, but that may also delay progress on the initiatives covered by the agreement.
  • Keep the contract simple. A contract should include all the verbiage necessary to clearly explain all aspects of the agreement, but not a word more. If that sounds dramatic, remember that information that isn’t relevant to the agreement or that repeats things already stated only bulks up the document, extending the time it takes to review and approve it. What’s more, the extra verbiage can muddy the waters if the contract must be interpreted or revised at a later date.
  • Identify all parties correctly. How a person or company is generally known and how an entity is legally defined may be two very different things. At a minimum, using the wrong name in a contract can make it more difficult to enforce the agreement. And in the worst case scenario, it can void the agreement. This is not something you want to discover after a conflict arises.
  • Pay special attention to performance and payment. Everything in a legal contract should, of course, be accurate. But the areas covering what is required of each party in terms of actions to be taken or payments to be made are especially important. Be sure to double- and triple-check this information before you sign.
  • Include terms that cover confidentiality. In many instances, working with another person or company exposes your sensitive business information to them and vice versa. Your agreement should have verbiage requiring strict confidentiality regarding anything learned about the other party’s operations during execution of the contract.
  • Specify how disputes will be resolved. Taking a breach of contract case to court can be very costly, both in terms of time and money. You may want to consider agreeing to handle disputes through mediation or arbitration and writing that into the contract.
  • Be clear on the issues pertaining to termination. Under what conditions do you have the legal right to terminate the contract? How about the other party’s rights? The only thing worse than having a business relationship sour is then finding it difficult to officially sever the relationship.
  • Choose which state’s laws apply. If you and the other party are located in different states, be sure to specify which state’s laws will be used to interpret the contract. You may also want to indicate where arbitration or mediation will take place if that is part of the agreement.

Welcome Clarity When Drafting a Contract

Whether you’re new to contract law or have executed hundreds of contracts, preparing to sign on the dotted line can be a source of concern and anxiety. But, using the checklist above and getting input from a Colorado small business attorney can help you enter into the agreement with confidence.

If you need guidance on contract law or assistance with drafting a contract, contact me, Elizabeth Lewis, at the Law Office of E.C. Lewis, P.C., home of your Denver 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
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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Business Formation: Proven Strategies for a Strong Start

Business Formation: Proven Strategies for a Strong Start

You’re a Colorado entrepreneur who is excited about the future and ready to create the business you’ve been dreaming of. However, you may find the idea of business formation confusing or even intimidating. Thankfully, it is not as difficult as it might seem to get a business up and running. The key is to take advantage of proven start-up strategies and to get good advice on business decisions that lie outside of your area of expertise. .

Tips for Launching Your Denver Small Business

Below are some key considerations as you work to establish a solid foundation for your new venture.

Create a business plan

Every successful business starts with putting a detailed plan into writing. Having your strategy fully mapped out in your head is great, but putting it on paper ensures that all stakeholders are literally on the same page. Your business plan should cover a wide range of topics including details about your product and/or service, target market, management structure, marketing strategies, etc. Not only will you and your team benefit from the time and effort you put into crafting your plan, other parties like lenders and investors will expect business formation documentation from you.

Form the business entity

Will your business be a limited liability company (LLC)? A sole proprietorship? A partnership? The decision you make at this stage of business formation will have long-term implications on a wide range of subjects from taxation to legal liability. Be sure you understand which business structure is right for your needs. Deciding on the legal structure of your business is perhaps the most important point at which to get business development legal help.

Choose your business name wisely

The are many things to consider as you pick a name for your company. You want it to be descriptive and memorable today, but you also need to think about whether it will still be applicable as time passes and as your business grows and potentially diversifies. You also need to do thorough trademark research to ensure you aren’t infringing on anyone’s rights.

Obtain insurance

From general business liability insurance to what is known as “errors and omissions” insurance, there are many types of coverage you should consider. You want to have the appropriate policies in place before your company is operational so that you are protected from Day 1.

Get required permits and licenses

Many types of businesses must be authorized by regulatory agencies to begin operations. Be sure you have done thorough research and have the certifications required in your area. A Colorado small business lawyer is your best resource for determining what permits and licenses your business will need to operate legally.

Establish financial relationships

For most small businesses, the saying that “it takes money to make money” is very true. Not only should you find a primary lender, it’s never a bad idea to connect with people at other institutions in case you ever choose to move your business or have a need that your primary lender can’t address.

Consider intellectual property protection

Wikipedia defines intellectual property as “a category of property that includes intangible creations of the human intellect, and primarily encompasses copyrights, patents, and trademarks.” Intellectual property law is very complex, so it is a good idea to talk with a Denver business attorney who specializes in this field to find out what steps you should take to protect your ideas. And, keep in mind that while you may not think of your type of business as one that would produce intellectual property, you may be surprised to learn that it does.

Find trusted advisors

From attorneys to accountants to business mentors, developing relationships with people who will share their insights can have a very positive impact on the success of your Denver small business. Plus, once you have established a core group of advisors, they can refer you to experts in other areas as needed. What’s more, they may even be able to steer some business your way!

And the Most Important Business Formation Advice of All Is…

While preparation is critical to success, determination plays an equally important role. The idea of “hoping for the best but planning for the worst” is very sound advice. Few Denver small businesses achieve the success they are striving for without hitting some bumps along the way. Patience, persistence, and a commitment to making it through the tough times will be some of your most valuable assets.

If you need a trusted resource for vital information on business formation, 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
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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6 Business Tax Law Tips for Colorado Entrepreneurs

6 Business Tax Law Tips for Colorado Entrepreneurs

Photo credit: blmurch on VisualHunt.com / CC BY-SA

Companies of all sizes prefer to hang on to as much of their revenue as possible. For Colorado entrepreneurs running small businesses, doing so can be critical to the financial health of their company. And, while the government certainly isn’t trying to hurt your business by assessing taxes, it’s not going to go out of its way to help your business either. That’s why you need to have a good understanding of business tax law and a process for ensuring you abide by it.

What are Business Taxes?

The Internal Revenue Service (IRS) oversees the collection of five general types of taxes:

  • Income Tax – All businesses except partnerships must file an annual income tax return.
  • Estimated Taxes – You must pay taxes on income, including self-employment tax, by making regular payments of estimated tax during the year.
  • Self-Employment Tax – Self-employment tax is a Social Security and Medicare tax primarily for individuals who work for themselves.
  • Employment Taxes – If you have employees there are taxes you must pay and forms you must file.
  • Excise Tax – Excise taxes only apply to certain types of businesses based on the products they produce, services they offer, or the equipment, facilities, or products they use.

The Colorado Department of Revenue also collects taxes from certain types of companies. Ultimately, even for the smallest of Denver small businesses, business tax law can be very complex and confusing. Consequently, it is well worth the time and effort to seek advice from a business attorney in Colorado.

How to Stay on the Right Side of Business Tax Law

Follow these tips to ensure that your taxes are easy to complete, accurate, and as low as possible:

Stay organized all year
For most small businesses, one of the worst things about tax time is getting prepared to file a return. Where are the receipts you need? Did you remember to record all your expenses? Did you log your mileage correctly? Rather than scrambling to answer all those questions at the last minute, set aside some time every month to keep your finances in order. And, start the fiscal year by setting up a filing system to make it easy to store and retrieve documents, charge slips, etc.

Keep personal and business finances separate
As a Colorado entrepreneur and small business owner, it may be tempting to let your personal and business finances commingle. However, doing so increases the odds that you will violate some aspect of business tax law and find yourself in trouble with the IRS.

Consider using independent contractors
If you are a Colorado entrepreneur who is just getting a business off the ground, it can be expensive to hire employees. In many cases, it makes more sense to work with independent contractors since you don’t have to pay payroll taxes or provide benefits. Just be sure you know how to correctly classify the people who perform work for you. There are big fines for misclassifying people so while you think you may save money by hiring someone as a contractor, you may have to pay for it in the end!

Use accounting software and a payroll tax system
Manually tracking expenses and handling payroll using spreadsheets is a recipe for disaster. Every year, many business are fined for making mistakes in these areas. Invest in the appropriate software packages and let them do the mental heavy lifting for you to ensure you aren’t breaking any business tax laws. Yes, you should double-check the numbers these systems generate, but generally speaking, if the information you put in was accurate, the information coming out will be accurate.

Take the home office deduction if applicable
If you run your Denver small business out of your home, you may be able to use the home office deduction to claim a portion of expenses, such as your mortgage interest, insurance, and utilities. Both homeowners and renters can claim of this deduction.

File on time
Be sure to file your tax return and pay any taxes due on time. If you fail to do so, not only will you have to pay the taxes owed, you will have to pay a penalty as well. To feel confident that your return has been received, consider filing electronically.

Cross Business Tax Law Off Your List

As a Colorado entrepreneur, you have plenty of things you would rather be focused on than business tax law. By following the tips above, you can ensure that you are in compliance and paying the minimum taxes required of you. Then you can turn your attention to more pressing business-building matters.

If you have questions about the interpretation of business tax law as it affects your company, 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
501 S. Cherry St., Suite 1100
Denver, CO 80264
720-258-6647
Elizabeth.Lewis@eclewis.com

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