by eclewis | Feb 22, 2014 | Business News
Just like marriages, business partnerships do fail. In some cases, it is a slow process where the owners decide it isn’t working out, but can end the partnership amicably. In other cases, it ends in flames of passion over the direction of the business – sometimes with fists and many times in court. However, just like with marriage, there are some things small business owners can do to help protect the business should their relationships with each other fail.
Member agreements, shareholder agreements, and partnership agreements can be written to lay out what will happen in a dispute. As crystal balls typically don’t work, all disputes can’t be planned for. However, a general layout of what you will do if the partnership fails can be put into place to lay the framework for a structured buyout, termination of services, and changes in ownership company.
Buy sell agreements can be put into place to ensure that there is a clear path of ownership for shares of owners that die or become disabled and that there is payment available to cover that path. For instance, if two out of three owners work in the company, it may be determined that if those individuals die, the company will want to buy them out. However, if a third owner is only an investor, it may not matter how owns his shares when he dies. Typically such agreements are funded through insurance policies, the parties in a partnership can determine how the sales price will be set and the company will pay for the policies.
Preparing for a divorce in a business is much like that in a marriage. You can’t prepare for everything that will happen while you are in business together. You cannot prepare for if the value of the business will go up or down. You need to make sure you have regular meetings with your co-owners and that you have some level of comfort with them before you go into business. In addition, you always want to make sure that on some level, you understand that partnerships can fail and that you have prepared for the multiple outcomes that can happen.
If you have any questions about going into business with other owners, please call me, Elizabeth Lewis, your Denver small business lawyer, at 720-258-6647.
by eclewis | Feb 15, 2014 | Business News
2013 saw a lot of growth in Denver. Dunkin Donuts opened their first shop in years (which my son loved). Mooyah Burgers, Big Smoke Burgers, World of Beer, Cabelas and several other chains all opened their first stores in Colorado also. 2014 has followed the trend of good business. In a recent poll by Wells Fargo/Gallup show that small business owners are the most optimistic they have been in the last five years.
Small business owners say they plan to hire more (despite what the Affordable Care Act), have good cash flow, and higher revenues. Although in no way scientific, from my limited research (which is talking to the small business owners I know), this poll and the results are actually realistic. Small business owners I have talked to are excited about 2014!
So what does that mean for you? If you are already a small business, it is time to ramp it up! If you have been putting off hiring, you might want to get an employee. If you have put off purchases, it may be time to look at financing. If you want to expand, it may be time to seek a larger space or a second space.
With all the possibilities out there, make sure you get your legal needs met by a Denver small business attorney though. By talking to someone that specializes in business law, you can make sure that you are prepared for what is to come in 2014. If you are going to hire, you may need employment documents or an employee handbook. If you are going to look into financing, you want to make sure all of your legal documents are reviewed before you sign them. If you are going to expand, make sure your lease isn’t going to end up bringing you down.
If you don’t have a business, now may be the time to start one. You can talk to me, your Denver business lawyer to make sure that you are legally protected and set up right from the start.
For more information on the poll, you can read the full poll results here. For help with your legal needs, contact me, your Denver small business lawyer, at elizabeth.lewis@eclewis.com or schedule an initial consultation today.
by eclewis | Jan 31, 2014 | Business News
Client Success Story – Axistence Athletics
After attending a seminar together, Dan Jimenez and Ryan Humphries realized that they had a lot of things in common. Both were certified personal trainers, ex-military, outdoor enthusiasts and they had very similar ideas on how the fitness industry should look in the future
Getting Fit on a Colorado Startup Adventure
Dan and Ryan wanted to bridge fitness and adventure in their new startup, but they needed some help getting their business off the ground. They came to the Law Office of EC Lewis to for business formation advice. In addition, with help of the network of professionals that Elizabeth knows, they were also able to find the perfect space for their new gym.
Engaging the core of being a Colorado Entrepreneur
Dan Jimenez and Ryan Humphries have met success as Colorado entrepreneurs. Axistence Athletics, LLC combines all the things that work for a successful fitness program and trims off the things that don’t. As both aMovNat affiliate, Axistence takes high and low intensity workouts and combines them to create bulletproof programs for their clients. Whether it’s climbing a 14er on the weekend or a backpacking trip to Nepal, Ryan and Dan believe that peoples’ fitness routines should prepare them for whatever activities they wish to pursue. In addition to fitness classes and personal training, Axistence offers specialty courses on outdoor skills such as land navigation, backpacking and wilderness survival so that clients can realize their full potential inside of the gym and out. From personal experience, I can say this includes 6-month-old little boys – Ryan was my personal trainer who helped me get back into shape after Colin was born. As Colin was unsure of having his mom work out without him, on many occasions Ryan figured out ways to include him in the workout so that I could reach my full potential even with an infant!
by eclewis | Jan 16, 2014 | Business News
Today, President Obama appointed Maria Contreras-Sweet head of the SBA. Founded in 1953, the SBA has had an impact on millions of US businesses, including mine. However, many people, including business owners, know little about the SBA. For most people, the most that they know about the SBA is that it backs some loans to small businesses. So, what does the SBA do?
The SBA primarily works in four areas:
- Advocacy
- Contracting with the federal government
- Education
- Financing
In regards to advocacy, the SBA conducts studies and monitors the small business environment. When small businesses are facing issues, the SBA helps determine the issues and solutions.
In regards to contracting, the SBA helps ensure that small businesses get to play a role in government contracting. The SBA helps certify businesses and ensure that they know about opportunities in the workplace. This includes both information about being a prime contractor and a subcontractor. The most recognized program is the 8(a) program for small businesses.
In regards to education, the SBA helps fund counseling and training for small business owners. Three of the most recognized programs are the SBDC (Small Business Development Center), SCORE, and Women’s Business Centers. Through these organization, individuals can learn about starting and maintaining a business, funding, and other necessary information to succeed as a small business.
Lastly, the SBA provides financing. While many small business owners are familiar with the SBA backed loan programs, most do not realized that they also help provide disaster recovery loans and micro-financing.
As a small business owner and business attorney, I highly suggest you take advantages of the resources available. If you have any questions, you can always call me, your small business lawyer, Elizabeth Lewis, at 720-258-6647.
by eclewis | Jan 12, 2014 | Business News, Internet Law, Online/Social Media Law
In a recent ruling by a Virginia court, the court ruled that Yelp.com, which provides online review from consumers for companies, had to release information about consumers who “anonymously” review companies. In the Virginia case, the owner of Hadeed Carpet Cleaning, Joe Hadeed, alleged that the reviewers of his site were not real customers and needing information about them to determine if they were real customers. If the individuals leaving negative comments were actual customers, then the review would be protected under the first amendment. However, if the reviews were not from customers then they would not be protected speech and Mr. Hadeed would be able to sue the reviewer. Mr. Hadeed requested information about the reviewers from Yelp; however, Yelp refused to disclose the information.
The court ruled that Yelp must reveal the names of the users to Mr. Hadeed because if the users were not customers then the speech was not protected speech. Yelp has stated that it disagrees with the ruling and that it will silence critics online. However, others hope that it will ensure that when businesses are reviewed, it is by actual customers.
This case highlights other issues that have been present about Yelp, namely issues with “hidden” results and the number of inaccurate reviews on the site. At this time, there is no news about whether Yelp will appeal the decision so online reviewers should be aware that reviews should be accurate and truthful because they may not be as anonymous as you think.
If you are a business that has had issues with possible inaccurate reviews online, please contact me, your Denver Business Attorney, Elizabeth Lewis at 720-258-6647 or elizabeth.lewis@eclewis.com.
by eclewis | Dec 5, 2013 | Business News
Women Owned Small Business Certification
Government contracting makes up a large percentage of the gross domestic product in the United States. With federal agencies required to grant up to 5% of government contracts to women owned small businesses, many small businesses wonder about how to take advantage of this income stream. The first step is to become certified as a women owned small business (WOSB).
To become certified as a WOSB, businesses must go through state, federal, local, or third party certifiers depending on the what entity you want to contract with. For instance, the City of Denver has its own application process to get approved as a WOSB. The Small Business Association, on the other hand, has four outside agencies it uses to approve WOSB. Unfortunately, there is not one standard approval process out there.
The requirements vary depending on the certifier, but almost all of them require that a woman have at least 51% of the ownership interest in the business. Women must have the final say in most business matters, such as dissolving the company, merging the company, and in the day-to-day operations. Most certifying agencies will require paperwork such as operating agreements or bylaws to show the control of the company. Some even require an onsite visit or in-person interview to ensure that the company is truly run by a woman.
With some certifiers, husband and wife owned businesses are not even eligible for WOBS. For the certifiers that do allow husband and wife owned businesses to qualify for WOBS, the certification process is much more stringent in most cases. In addition to being the majority owner on paper, the wife must prove that she can handle the day-to-day operations of the company. There are several examples of how even if a wife owns the majority in a business, the SBA will not certify the company as a WOSB on the SBA website. One example that is listed is the case of a husband and wife owning an auto shop where the wife does not have experience as a mechanic and is not licensed as a mechanic. The SBA states that even if the wife owns the majority in the shop, if her husband is the experienced mechanic, holds the associated licenses, and has an equity interest in the company, the business will probably not qualify for WOSB status. If you have a husband and wife owned business, caution must be used prior to applying for WOSB status to ensure that you can qualify.
Prior to attempting to get certified as a WOSB, even if you know you are eligible, you should weigh the pros and cons. While the pros are fairly obvious (i.e. a greater chance to win those government contracts), the cons are sometimes more difficult to determine. If you are thinking about selling your business in the near future, WOSB are more difficult to sell as if the potential owners of a successor business are mostly male, the income stream may decrease as the business would no longer qualify for WOSB. In addition, if you are a small business that uses equity to get employees and contractors, you may find that while you qualify as a WOSB today, you don’t tomorrow. Finally, the process can be long and time-consuming so if you are already successful it may not be best for your bottom line to apply.
Get Advice Before Getting A WOSBC
Consulting with a business attorney who has expertise in creating these documents about your future plans might be the difference between a successful company and one that fails. If you’re ready to form a corporation or you’re still wondering, “do I need a lawyer to incorporate my small business”, contact the Law Offices of E.C Lewis today.
