by eclewis | Sep 23, 2014 | Business News
What Are Benefit Corporations—and Why Colorado Businesses Should Care
Last year, Colorado, with the passage of HB 13-1138, the “Public Benefit Corporation Act of Colorado,” joined a growing minority of states that have passed legislation enabling the incorporation of “benefit corporations.” Benefit corporations are a corporation that can be structured as a C-corporation or S-corporation but are specifically committed to benefitting the public, in addition to making profits. Directors of benefit corporations are charged with balancing the interests of shareholders with the interests associated with supporting public benefits. This legislation allows both new and existing corporations to become benefit corporations.
These public benefits can include educational, environmental, charitable, religious, cultural, scientific, and other types of publicly beneficial causes. However, benefit corporations are able to state more than one cause that they wish to support. This can allow for some flexibility within the company in the kinds of goals they will support.
Some well-known examples of benefit corporations include Patagonia, Etsy, and Warby Parker. Here in Colorado, GoLite, a Boulder-based outdoor apparel and equipment company, New Belgium, the Fort Collins-based brewery, and others have decided to become benefit corporations.
While many corporations feel that charitable giving is part of their social responsibility and choose to give to such causes without being a benefit corporation, shareholders of benefit corporations are given the unique power to take legal action against the management of the benefit corporation if they are not producing public benefits. Conversely, it is rare, if not impossible, for shareholders of regular corporations to be able to take such legal action over charitable or public benefits foregone by a regular corporation.
Some see the development of benefit corporations as an exciting new era that demonstrates a commitment to corporate social responsibility. Others view them as potentially tying the hands of corporate management, especially if the company hits hard times, since regular corporations can still choose to give charitably. As a result, it will be interesting to see how these benefit corporations change the corporate world and how it will effect how companies try to generate both profits and public benefits.
If you have questions about setting up a corporation of any kind, be sure to contact the Law Office of E.C. Lewis P.C., home of your Denver Business Lawyer, Elizabeth Lewis, 720-258-6647 or email her at Elizabeth.Lewis@eclewis.com.
by eclewis | Aug 14, 2014 | Business News
Colorado’s Startup Climate: Why New Businesses Are Booming—and How to Take Advantage
(Updated November 10, 2025)
New businesses and entrepreneurship are on the rise in the Centennial State. According to the Secretary of State’s Quarterly Business and Economic Indicators Report covering the second quarter of the year referenced, new business entity filings increased 4% compared with the same quarter in 2013. Looking at a full year of activity, the report also showed a 4.8% year-over-year increase in filings, underscoring sustained momentum rather than a one-time spike.
Positive trends went beyond new filings. The second quarter also saw higher employment levels in Colorado and nationwide and an uptick in renewal filings from existing companies. Renewal activity—a useful proxy for the health and confidence of established businesses—rose 3.9% from the first quarter. Taken together, these indicators supported the report’s prediction of continued employment and economic growth for the next two quarters, driven by new jobs at startups and expanding firms.
The outlook within the report was specific: filings were expected to increase in the third quarter, then moderate in the fourth (a typical seasonal pattern), while still finishing the year above the prior year’s fourth quarter. For prospective founders and growing companies, this kind of steady trajectory is encouraging. It suggests a supportive backdrop for launching a new venture or investing in expansion plans.
Colorado’s broader economic profile bolstered these findings. When Business Insider ranked all 50 state economies using eight indicators—unemployment, GDP, average wages, labor force size, and more—Colorado earned the #1 spot, performing within the top 15 across every metric and benefiting from a highly diversified economy. A balanced mix of industries often cushions a state from volatility, giving entrepreneurs a stronger foundation on which to build.
Lower Barriers to Entry: Filing Fee Holiday
On June 9, the Secretary of State announced a filing fee holiday for new business entity filings, reducing the fee from $50 to $1 through the summer. Triggered by budget surpluses, the initiative aimed to put a little more cash in founders’ pockets during the earliest—and often leanest—stage of formation. After summer, the office indicated the fee would be reevaluated monthly. Combined with the favorable indicators already mentioned, the reduced fee created a practical, near-term incentive to form a new entity or launch a spin-off.
Why These Trends Matter for Founders
- Validation for timing: Rising filings and renewals signal founder confidence and a supportive ecosystem—useful when deciding whether to start now or wait.
- Capital and talent: Strong statewide performance often attracts investors and skilled workers, making it easier to hire and finance early growth.
- Network effects: As more businesses form, support services (bookkeeping, marketing, legal, HR, IT) cluster and mature, lowering costs and speeding execution for everyone.
Smart Next Steps to Start (or Expand) in Colorado
If you’re ready to act while the winds are favorable, consider these foundational steps. They’ll help you move from idea to launch with fewer surprises:
- Validate your concept.
Draft a concise value proposition, identify your core customer, and test demand with small pilots or pre-orders. Early validation reduces costly pivots later.
- Choose the right entity type.
LLC, S-Corp, C-Corp, partnership, or sole proprietorship—each has implications for liability, taxation, governance, and investor expectations. Many small businesses opt for an LLC for flexibility, while venture-bound startups often choose a C-Corp. The “right” answer depends on your goals.
- Lock down governance documents.
- Operating Agreement (LLC) or Bylaws/Shareholder Agreement (Corporation)
- Buy-sell provisions for co-founders and investors
- Ownership and vesting schedules to protect the company if someone leaves
Clear rules now prevent disputes later.
- Register and get your numbers in order.
- File your entity with the Colorado Secretary of State
- Obtain an EIN from the IRS
- Open a business bank account and set up bookkeeping from day one
Clean separation of business and personal finances is crucial for liability protection and tax reporting.
- Mind licenses, permits, and taxes.
Depending on your industry and location, you may need sales tax registration, professional licenses, or municipal approvals. Verify requirements early to avoid penalties or delays.
- Protect your brand and IP.
Conduct name and trademark searches; consider federal trademark registration for your brand and agreements that clarify ownership of creative or technical work.
- Use the right contracts.
Standardized, attorney-reviewed client agreements, vendor contracts, employment or contractor agreements, and a privacy policy/terms of use (for online businesses) establish clarity and help manage risk.
- Plan your team thoughtfully.
Understand the distinctions between employees and independent contractors, wage and hour rules, and required insurance (such as workers’ compensation). Misclassification can be costly.
- Build a simple growth plan.
Draft a 90-day plan covering your offer, pricing, channels, sales cadence, and cash flow. Short planning cycles let you learn and adapt quickly.
- Stay compliant after you launch.
Mark your calendar for annual reports, renewal filings, and tax deadlines. Rising renewal rates suggest more businesses are staying current—join them and avoid reinstatement headaches.
Expansion Tips for Existing Businesses
- Consider a new entity or subsidiary for a new product line to isolate risk or welcome new investors.
- Update your governance to match growth: board structure, shareholder agreements, and key-person/owner succession planning.
- Review contracts and insurance annually; what worked at $500K in revenue may not fit at $5M.
- Leverage incentives and programs available to growing Colorado businesses (local grants, workforce training support, and small-business development resources).
The Bottom Line
With strong business formation trends, healthy renewal activity, and top-ranked statewide economic performance, Colorado presents a compelling environment for both new founders and expanding companies. Add in a temporary $1 filing fee and there’s extra motivation to formalize your venture and start building momentum.
Now is an excellent time to consider starting or scaling your business with Colorado’s positive outlook at your back—and with reduced friction at the formation stage.
If you’re ready to take the next step, reach out to the Law Office of E.C. Lewis, P.C., home of your Denver Business Lawyer, Elizabeth Lewis. Call 720-258-6647 or Contact Us to get guidance on choosing the right entity, preparing essential agreements, protecting your IP, and setting up a compliance plan that grows with you.
by eclewis | Jul 1, 2014 | Business News
Colorado Ranks #8 in CNBC’s Top States for Business
The results from CNBC’s ranking of America’s Top States for Business are in. After analyzing and comparing each state across fifty-six different business metrics, each state was assigned points in ten major categories to determine their ultimate ranking. Colorado came out with a ranking of #8 in the nation overall. You can take a look at the full report here.
Looking at some of the ten primary ranking categories, Colorado received the following rankings. Colorado ranked first for Access to Capital, which looks at the availability of venture capital and small business loans. For Workforce, which accounts for the quality and availability of workers, it came in 5th. Colorado ranked 8th for Economy, which examined the growth, job creation, and health of the real estate market. Colorado also came in at 9th in Technology & Innovation, which factored in the number of new ideas and capacity to support them within the state, and 12th in Quality of Life, which was scored by looking at crime, healthcare, and recreational considerations.
Colorado was specifically described in CNBC’s report as being “focused on innovation,” having a workforce that is “dynamic” and that capital for businesses was “abundant.” The Centennial State’s strong business performance evidenced by this report shows that there is no better time than the present to start or grow your business right here in Colorado.
If you are ready to get started, you can contact the Law Office of E.C. Lewis, PC, home of your Denver Small Business Lawyer, Elizabeth Lewis at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
by eclewis | Jun 17, 2014 | Business News
Does My Business Need an Employer Identification Number (EIN)?
There are a few questions that you can ask yourself right away regarding your business that can indicate to you immediately whether or not it is time to apply for an Employer Identification Number (EIN) from the IRS.
Does your business have employees or plan on hiring employees? It is important to note that even if your business is using contractors to get work done, they may be more accurately characterized as an employee under the law, which will require an EIN to be established and additional changes regarding such workers to be made.
Does your business operate as a partnership or a corporation? This includes all types of partnerships, corporations, and will likely include your LLC, unless it is a single-member LLC with no employees (and does not plan on hiring any) that does not fall under any other specific conditions.
Is your business involved with any of the following types of organizations? Non-Profits, Trusts (except certain grantor-owned revocable trusts), Estates, Plan Administrators, Individual Retirement Accounts, Exempt Organization Business Income Tax Returns, Real Estate Mortgage Investment Conduits, or Farmers’ Cooperatives.
Does your business withhold taxes on income, besides wages, that are paid to a non-resident alien?
Does your business file any of the following tax returns: Employment, Excise, or Alcohol, Tobacco and Firearm?
Does your business have a Keogh plan? Keogh plans are a particular kind of retirement plan that may require an EIN.
If you answered yes to any of the above questions, are unsure about your answer, or have other questions of your own, do not hesitate to reach out to the Law Office of E.C. Lewis, PC, home of your Denver Business Lawyer, Elizabeth Lewis at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
by eclewis | Jun 10, 2014 | Business News
Why Mentors are Important and How to Find One
A mentor in your industry can help set you down the right path for your business, or expose you to opportunities you had not even considered. They are not afraid to give frank advice by letting you know a new idea needs refining or when to take that risk you have been considering. They can also help you realistically determine your business goals and how to achieve them more efficiently. Mentors are important because they have been in your position, and you can learn from their experience in ways books are incapable of teaching you and more candidly than a friend or family member might.
Trying to find a mentor does not have to be intimidating. Finding a mentor starts with networking, but the better question is where and how to get started.
A great place to start is within. Think about whom you know in your industry. Think about your business partners, clients, co-workers, friends, and family. These people can all be potential contacts to discover your new mentor. Ask if they have had a mentor or if their parents worked in the same line of work. If you are still having trouble connecting with a possible mentor this way, it may be time step outside your comfort zone.
Start searching for conventions, organizations, or even classes designed for those in your line of business. Go to an event or class with a colleague and strike up a conversation with other attendees. Ask if they have ever been to an event like this to get conversation going. Be sure to introduce yourself to the officers of the group or speakers at the event, because there is a reason why they are leading the group. These people have unique knowledge from their experiences, and they could make for a great mentor. Look for ways to connect with these new acquaintances beyond work by discussing hobbies, vacations, and family. You never know what else you may have in common. Get their business card and follow up soon and let them know you enjoyed meeting them.
When setting up additional meet-ups remember to be flexible and work around their availability, since these people are using their time to meet with you when they have no obligation to do so.
These tips should help set you on your way to discovering a mentor in your industry and getting closer to your business goals. If you need legal assistance with your next business goal, do not hesitate to reach out to the Law Office of E.C. Lewis, PC, home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at elizabeth.lewis@eclewis.com.
