Top 8 Reasons Why You Need a Small Business Lawyer
We understand that when you’re starting your business, money can be tight. You might be looking for ways to save money to help your business get and remain profitable. You might think that a business lawyer is a smart item to cut from your budget.
However, that would be a mistake. Here are 8 reasons why you should have a small business lawyer as soon as possible.
1. You Can Be Sued at Any Time
Nobody likes to think about the prospect of being sued, cited, or summoned to appear in court. However, the truth is that this can happen to you and/or your business at any time, and when it does, it’s too late to look for a lawyer.
By having an attorney at the beginning of your business, the hope is that you can structure your business and its services such that you will never need to face a courtroom. However, if it happens, it’s best to have someone that can help you navigate the process – whether it is with them as your litigation attorney or with them playing a supporting role and helping you find a litigation attorney.
Protect yourself and your business by having a lawyer before you need one.
2. You Are Constantly Dealing with the Law
Part of the reason why you can be sued at any time is that your business is constantly dealing with the law. If you have employees, there are numerous legal complications with employment law. Any product you produce or sell has standards it must meet. Any client you work with might present you with a contract that you’ll want to review before signing. There are zoning laws and environmental regulations and building standards to consider.
Having a small business lawyer will make it easier to navigate all these legal complications to protect your business.
3. You Have Intellectual Property to Protect
Your business likely has intellectual property. This could be something as simple as a logo or a family recipe. Or it could be something much more complicated, including software, a unique manufactured product, or a unique manufacturing process.
A lawyer can help you file the proper paperwork to protect your intellectual property, help you license or sell it, and go after people infringing on your property.
4. You Need to Buy or Lease Commercial Real Estate
Real estate is expensive, and making mistakes in buying or leasing commercial real estate can make it much more expensive for your business. A small business real estate lawyer can help you go through the proper steps in drafting, reviewing, and negotiating agreements. A lawyer can help you get proper inspections before committing to purchasing or leasing property. They can also help you get any zoning issues out of the way to ensure the property will be useful for your business. Finally, they can make sure any agreement is free of burdensome terms that might doom your business.
5. You’ll Be Working with Businesses That Have Lawyers
Why do burdensome terms get put in contracts? Because other businesses have lawyers who are always on the lookout for ways to help their clients. If you don’t have anyone looking out for you, you might find yourself held to terms that harm your business. Whenever another business gives you a contract, you will benefit from having a lawyer to review it.
6. Making Legal Mistakes Can Be Expensive
Remember when we mentioned that you are constantly dealing with the law? Well, every one of those dealings can easily become a major legal liability if you don’t know what you’re doing. Running afoul of an employment law, municipal code, or environmental regulations could cost your business thousands of dollars, or potentially much more depending on the legal issue.
In comparison, having a lawyer available to review your documents and consult with about the law is relatively inexpensive. It will save you considerable money over time.
7. You Don’t Have Time to Study Law
Running a business is at least three full-time jobs rolled into one. Most business owners work extremely long days for several years before they can afford to find someone to take much of the burden off your shoulders. With all this work, you don’t have time to try to squeeze in legal studies on the side. The law is extremely complicated and takes years of dedicated work to master. Even if you dedicate all your free time to studying the law, you’re unlikely to master it in time to save your company from making a major legal mistake. Just like you want to be the expert in your field for your clients to turn to, having a seasoned business attorney ensures that you have an expert in the legal field to turn to.
8. You’ve Got Enough Other Things to Worry about
In addition to being a lot of work, owning a business is a lot of worry. You have employees that count on you. You have expenses to keep track of and a budget to manage to ensure that all your employees get paid. There’s competition to watch out for and inventory to track. Whenever you can get a worry off your mind, it’s best to do it.
Having a business lawyer will eliminate many worries so you can focus on the critical tasks necessary to ensure your business grows and thrives over time.
Why Choose the Law Office of E. C. Lewis
If you are looking for a business lawyer who understands the needs of small businesses, then you’re looking for the Law Office of E.C. Lewis. Since 2007, Elizabeth Lewis has been helping small and medium sized businesses in the Denver area navigate the complicated legal landscape to chart a course for long-term success. Elizabeth focuses on developing relationships with businesses. She wants you to succeed, and she’ll always be here when you need her. She offers a wide range of legal services and can help with any legal challenges your company may face.
If you are ready to talk to the Law Office of E. C. Lewis in Denver about representing your business, please use our contact form today.
A business attorney can literally help save your business. They can help with real estate transactions, licensing your intellectual property, and day-to-day legal compliance in ways that will make all the difference to your business’s survival. Therefore, it’s critical that you have a business attorney, even when you might not know that you have a specific need for one.
But how do you find the right business attorney for you? Here’s a step-by-step guide that can help.
Ask Colleagues for Recommendations
Asking for personal recommendations is always a great place to start. If you have colleagues that you trust, ask if they would recommend their business attorney. This can be especially useful if you know a colleague who has navigated some legal hurdles recently.
Make sure to collect lists of both attorneys your colleagues would recommend and those that they would not recommend.
Search for Results Online
Your list of personal recommendations is just a starting point. Don’t just go with someone that your colleague recommended, especially if you only got one recommendation.
Instead, do a quick online search for business attorneys in the area. Make your search specific to your needs. For example, if you need an attorney for a real estate transaction, search “business attorney for buying commercial property,” or “business attorney to renegotiate commercial lease,” depending on your needs.
Also look up the websites of the attorneys your colleagues recommended. You might find, for example, that an attorney has retired, or that a recommended attorney no longer works at the recommended firm.
Evaluate Their Expertise and Experience
Take time to peruse the website of each lawyer you’re considering. Figure out what areas of business law they focus on and how that overlaps with your business attorney needs. At a minimum, a lawyer should mention the industry or transaction you need help with. Ideally, they should devote considerable space to it on their website in the form of one or more pages or blogs unless you have a novel idea that hasn’t been dealt with before, of course.
Make sure a lawyer has experience dealing with your type of business. There are lessons that are best taught by experience, so it’s best to choose a lawyer who has been practicing for several years as a business attorney.
Read Testimonials and Reviews
Any good attorney will generate positive reviews. If an attorney doesn’t have testimonials and reviews that you can easily find, make sure you do a lot more homework to make sure they are qualified.
Don’t just look at the star ratings of reviews. Instead, take the time to read the reviews so you can understand what people value in the attorney. If it’s what you’re looking for in a business attorney, make sure that person is at the top of your list.
Case studies, sometimes called customer stories, are another important resource. These detailed descriptions of how the lawyer helped a business can help you understand how their services can help your business.
Schedule Consultations
After looking at websites, you should have a short list of lawyers you’re considering. Schedule consultations with these lawyers. Many business attorneys will offer a free initial call to see if it is a good fit – for both you and for the attorney. These calls may be short in length, but it can give you an opportunity to hear a lawyer’s voice and get a personal introduction to why they think they might be right for your business.
If you don’t get enough information from these initial consultations, don’t be afraid to schedule an in-person consultation or a longer consultation if needed. Yes, in many instances attorneys will charge for a longer consult, but spending a small amount of money now may save you considerably over choosing the wrong business attorney.
Make Your Decision
Now it’s time to make your decision. To do this, look at each lawyer you’ve been considering and ask three questions:
Are they right for your business? Choose a lawyer that is right for your business. This means that they have the right experience and expertise for the legal work you’ll ask them to perform. If you’re looking to incorporate, find someone who’s helped businesses get incorporated. If you’re licensing software, make sure you find someone with expertise in software licensing.
Will they care about your business? Make sure that the attorney you choose is one that will really care about your business. You’ll find this in reviews and testimonials, but also in the lawyer’s manner during your consultations. Avoid picking a firm for your small business just because they seem impressive. For example, unless a larger firm has multiple lawyers dedicated specifically to small business clients, you might find that while a big firm has great views from their conference room, the large firm never has time for your small business.
Do you feel comfortable working with this lawyer? Finally, it’s important that you choose a lawyer you feel comfortable talking to – and one that you feel is really listening to you. Often, legal issues can turn on small details, and if you don’t feel comfortable talking about the details with a lawyer – or if you think they’re not listening – you might be setting yourself up for trouble later.
If none of the lawyers you’re considering meet your needs, start the process again. It’s worth it spend as much time as needed to find the right lawyer, rather than rushing through the process and working with the wrong one. The hope is that once you find an attorney, that attorney should be able to be with your business for the long run and become a valued resource for you and your business.
Why Choose the Law Office of E.C. Lewis as Your Business Attorney
Since 2007, Elizabeth Lewis has helped many small businesses with their legal needs. She understands the specific issues facing small businesses, and how they differ from the legal needs of large corporations. She can help your business navigate all the challenges that you will face as you’re starting it and steering it through its challenging first years.
Elizabeth takes a results-oriented approach. She wants to help you and your business accomplish your goals, and she knows how to get the law on your side, for protection from threats as well as leverage in achieving your goals.
Finally, Elizabeth focuses on building relationships. She wants your business to achieve long-term success, and she plans to be there for every step in the process. She’s not just going to help you with a one-off task now – she’ll be here when you need her in the future as well.
Talk to Elizabeth Lewis about Your Business Attorney Needs
Don’t let the process of choosing a small business attorney keep you from advancing your business. You can schedule a free phone consultation with Elizabeth to learn whether she’s the right business attorney for you.
Use our contact page to get started. The Law Office of E.C. Lewis serves small and medium sized businesses in Denver and throughout Colorado.
Launching a new business can be overwhelming. There are many critical actions to take during the initial phases of this process that will have a significant impact on the success of your new venture. Without the proper guidance, you run the risk of overlooking an important and essential task. For this reason, you should always work with an experienced startup business lawyer who can help you navigate this challenging and complex process.
While there may be additional tasks and actions required based on your specific situation, the following list will give you a good starting point for the action items you need to take when launching a new business. Elizabeth Lewis has been providing legal guidance to startup businesses since 2007, and she can help ensure you make the right decisions to set your new company up for success.
Create a Business Plan
Creating a business plan is one of the most critical initial steps for a startup business. It will help you clarify your goals and provide a roadmap for building your new company. In addition, a well-formulated business plan is essential if you plan on applying for a business loan or seeking money from investors. It’s unlikely any investor will even consider your request without a business plan to review.
Make sure your business plan includes the following components:
Executive Summary – This is an outline of everything contained within your business plan.
Business Description – This should include your industry, the company structure, any relevant background information, your value proposition, and your short-and long-term business goals.
Market Analysis – This analysis should assess your new company’s position in relation to your target customers, primary competitors and industry trends.
Product/Service Description – Provide an overview of the products or services you intend to provide to your customers.
Financial Projections – This should include your profit goals, pricing and sales strategy, and investor information.
Operational Overview– This overview details the logistics, production and distribution plans for your business.
Determine Your Startup Costs
Before you can seek funding, you will need to estimate your startup costs, as well as when you project your new business to start making a profit. Startup costs typically fall into the following categories:
One-Time Costs – These costs are required when you set up your business, but will not occur again. They include lease deposits, state business registration fees, and any one-time equipment costs necessary to run your business.
Labor Costs – Always include your salary in addition to the wages for any employees you’ll hire.
Overhead Costs – This includes monthly expenses such as rent, utilities, production costs, taxes and any equipment that must be purchased regularly.
Secure Your Funding
While it’s likely that a portion of your startup capital will come from your savings and existing assets, most businesses will require additional funding to get off the ground. It’s always best to secure all necessary funding for your startup costs before spending money. If you can’t fund your startup costs on your own, the following options can help you obtain the money you need:
Small business loans from a local bank
Third-party investors
Crowdfunding campaigns
Choose a Business Structure
Before launching your company, you’ll need to choose a business structure. The structure you choose will have legal and tax implications for your business once you begin operating. There are four types of business structures, and the right option for you will depend on the specifics of your new business:
Sole Proprietorship – This is the simplest business structure, but it makes no distinction between the business and the owner. This structure entitles you to all profits, but also makes you personally responsible for all debts, liabilities and losses associated with the business.
Partnership – This structure is similar to a sole proprietorship, but it is used when there is more than one owner. The co-owners will create a partnership agreement that details how legal obligations, financial obligations and profits will be split.
Limited Liability Company (LLC) – Owners of an LLC work as a “member” of the company. This structure protects your personal assets from financial liability in most cases, but it is important that it is setup correctly to ensure limited liability.
Corporations – A corporation makes your business a legal entity that is separate from its owners and as a result, provides the strongest level of protection against personal liability. This structure may be an ideal option if you’re seeking outside investors or plan to take your company public in the future.
Choose Your Business Name
Choosing the right name can often play a significant role in the success of your company. A catchy name can help attract customers and investors, and it can also provide a point of differentiation with your competitors.
If you plan on trademarking your business name, you’ll need to do some research to make sure the name hasn’t already been trademarked by someone else. You can use the US Patent and Trademark Office’s Trademark Electronic Search System (TESS) to see if your desired name has already been trademarked.
Register Your Business
You’ll need to register your business with the IRS and obtain an Employer Identification Number (EIN). Your EIN will be used for tax purposes, as well as whenever you apply for business licenses, open a bank account and hire employees.
In addition, you may also need to register your business with your state government. You should also contact your local government office to determine whether any other registrations or permits are required to do business in your local area.
Obtain Licenses and Permits
The State of Colorado doesn’t require generic general business licenses for most businesses. However, depending on the specifics of your new business, you may need to secure certain licenses or permits to be allowed to operate legally, especially with your local jurisdiction. These licenses and permits vary by industry, and it’s best to consult with your startup business attorney to ensure you comply with all regulations that apply to your new business.
If you sell physical products, you will also need to obtain a sales tax permit with your state.
Get Insurance for Your Business
Before opening your business, you will need to make sure it is properly insured. All businesses should have general liability insurance, which covers you in the event someone suffers an injury on your property or due to the activities of your business. Depending on the nature of your business, you may also need to purchase one or more of the following types of insurance policies:
Workers’ Compensation – This covers all medical expenses and lost wages for any employees who get injured on the job.
Professional Liability – This covers you in the event that you make an error or omission that costs your clients money.
Property Insurance – This covers any loss or damage to physical property, including your company equipment or commercial real estate space.
Business Interruption Insurance – This covers any lost revenue suffered if your business must temporarily close down after a natural disaster or other unforeseen event.
Elizabeth Lewis Can Help
Getting the right legal advice on how to set up your new business is critical to your long-term success. It will help you lay the foundation for a well-run organization that has the ability to grow and scale over time. At the Law Office of E.C. Lewis, we can provide the guidance you need during this important formative stage of your new business.
Elizabeth Lewis has helped a wide range of small businesses in Denver and throughout Colorado navigate the requirements of business formation. She understands the complex legal requirements associated with starting a business, and her expertise will provide you with the important protections you need as you launch your new venture.
Please contact us today to schedule a consultation. Elizabeth Lewis is a small business attorney serving Denver and all of Colorado.
Top Reasons Your Small Business Needs a Real Estate Lawyer
Most small businesses will enter into real estate transactions at some point in time. Whether you’re looking for a storefront for your retail business, a prime location for a restaurant, or office space to meet the needs of your employees, these real estate transactions can have a significant impact on the success of your business. Since the purchase and lease of commercial real estate property involves entering into a legally binding contract, it’s critical that you work with a real estate lawyer who can ensure the best interests of your business are protected at all times.
A Business Lawyer Provides You with Important Protections During Commercial Real Estate Transactions
If your business is buying or leasing commercial real estate property, working with a small business lawyer can provide several important benefits:
Drafting and reviewing lease agreements – A small business lawyer can draft and review commercial lease agreements to ensure the terms are fair and protect the best interests of your business. In addition, working with a lawyer will ensure all necessary clauses are included in the final agreement.
Overseeing paperwork – A small business lawyer can handle all the documentation necessary to finalize your commercial real estate transaction. This includes all titles and contracts. Your attorney will make sure you understand everything contained in these documents and facilitate a smoother real estate transaction.
Contract negotiation – Your business attorney can handle all contract negotiations for you whenever you are purchasing or leasing commercial real estate to ensure you receive favorable terms for your business. If these contracts are drafted by the other party’s agents, your lawyer will make sure your best interests are protected.
Save time – When you have a business attorney handle commercial real estate transactions on your behalf, it frees up your time to focus your energy on the core operations necessary for your business to grow and thrive.
A Business Lawyer Can Help You Avoid Common Mistakes Made in Real Estate Transactions
Business owners who handle commercial real estate transactions on their own often make a variety of mistakes that can have devastating consequences for their business. Working with a small business lawyer will help you avoid the following common mistakes:
Failing to document everything in writing – It’s critical that every term of your agreement is included in a written contract. Failing to document the terms in writing can result in disputes down the road that can be costly to your business.
Relying on emotions – It’s common for small business owners to make real estate decisions based on emotion rather than objective, analytical considerations associated with how the deal will financially impact your business. This can result in accepting a deal that may not be in the best interests of your business.
Failing to investigate a seller’s motives – When purchasing commercial real estate for your business, it’s important to do your due diligence to understand the reasons why the property owner is selling. These motives can potentially highlight some challenges you may experience after taking ownership, and they will often impact the terms you request as part of the deal.
Closing before receiving zoning approval – It’s critical to secure all necessary zoning approval for a commercial real estate property prior to moving forward with the transaction. Failing to do so can result in devastating financial consequences for your business.
A Small Business Lawyer Can Help You Get Out of a Lease That No Longer Meets Your Needs
The rise of remote work environments in recent years has caused many businesses to be saddled with leases for office space that no longer meets their needs. Remaining in a lease for larger office space than you need can significantly impact your profitability. If you’re looking to downsize from office space but still have time remaining on your lease, a small business lawyer can help.
Working with a lawyer provides the important legal guidance and representation your business needs when trying to get out of a lease for commercial real estate. Your lawyer will help you:
Negotiate the terms of your lease termination – A lawyer can work with your landlord to negotiate a lease termination agreement that is satisfactory for both parties. Your lawyer will help work out early termination costs, notice periods, buyout options and other elements that must be part of the final agreement.
Understand contract ramifications – Before attempting to get out of your commercial real estate lease, it’s important to understand the legal consequences associated with your decision. Your lawyer will review the lease with you to ensure you understand all potential penalties listed in the agreement and how they might impact your business.
Minimize your costs – Your lawyer can evaluate the terms of your lease to identify potential strategies that will minimize the penalties associated with breaking the agreement. This can be a critical way to reduce the financial costs your business will face from early termination.
Risk management – An experienced small business attorney can help you negotiate early termination terms that are less likely to result in significant financial losses or legal liabilities for your business.
Legal defense – If your landlord decides to fight your attempt to break the lease in court, a small business lawyer will play a critical role in making sure your rights are protected throughout the lawsuit.
You Need to Find a New Commercial Space for Your Business
Commercial real estate space in downtown Denver is harder to find than ever. This has created a competitive market that places businesses looking to purchase or lease commercial property at a disadvantage. Working with an experienced real estate lawyer can provide the assistance you need to find a location. In addition, your attorney can review the lease or purchase contract to make sure it protects your best interests.
If you’re struggling to find commercial real estate property for your business in downtown Denver, Elizabeth Lewis can help. She has developed relationships with many local real estate brokers and can put you in touch with the right person to help you find the ideal space for your business.
The Law Office of E.C. Lewis Can Help
Real estate-related decisions can have a far-reaching impact on the success of your business, and it’s important to have the proper guidance to ensure your interests are protected during these transactions. At the Law Office of E.C. Lewis, we can help you navigate these important decisions.
Since 2007, Elizabeth Lewis has helped small and medium sized businesses in Denver and throughout Colorado with a wide range of commercial real estate transactions. She has the expertise to help you with just about any real estate matter you have, ensuring your best interests are protected throughout the process.
Contact us today to schedule a consultation. The Law Office of E.C. Lewis serves businesses in Denver and throughout Colorado.
At the Law Office of E.C. Lewis, we provide a wide range of legal services for businesses in Denver and throughout Colorado. In order to provide the best possible guidance to our clients, we’re constantly monitoring the latest laws and regulations impacting small businesses throughout the state. Below is a rundown of some recent changes to Colorado law that business owners should be aware of.
Businesses Cannot Ask for Any Age-Related Information from Job Applicants
In 2023, Colorado passed the Job Application Fairness Act. This law, which goes into effect on July 1, 2024, prohibits businesses from asking job applicants for the following age-related information on job applications:
Age
Date of birth
Dates of attendance/graduation from an educational institution
In addition, if employers ask for third-party materials such as certifications and transcripts, they must inform the applicant that they have the right to redact any information on these documents related to the prohibited age-related items listed above.
The purpose of this law is to prevent age discrimination during hiring, as approximately 40% of hiring managers have admitted to age bias when reviewing resumes. While this law will primarily benefit older applicants who are the most common victims of age discrimination, it will also likely benefit young applicants who are just starting out in their careers.
There are a few exceptions to this law. Employers can verify an applicant’s age in the following situations:
Jobs which have age requirements imposed by federal, state or local law
Jobs that have age-related qualifications related to public or occupational safety
However, for these exceptions, businesses cannot ask for the applicant’s specific age; they can only ask the applicant to verify that they meet the requirements associated with the job.
Businesses will receive a warning for the first violation. Penalties for a second violation can be as much as $1,000, and subsequent violations face a fine of up to $2,500. Business owners should review their job application forms now to ensure they are in compliance with the new law before it goes into effect this July.
FAMLI Program Is Now in Effect
The Colorado Paid Family and Medical Leave Insurance (FAMLI) program began providing benefits to employees beginning January 1, 2024. This program ensures all Colorado workers have access to paid leave to care for themselves and their family members during certain life circumstances, including:
The birth of a child
A serious health condition
Funding for the FAMLI program started January 1, 2023, and both employers and employees should be contributing premiums for the program during each pay period. It’s important for businesses to be aware that this program is now in full swing, and employees have the ability to take paid leave for qualifying events. Eligible employees can receive up to 12 weeks of paid leave, and individuals who experience pregnancy or childbirth complications can receive an additional four weeks.
Restaurants Can No Longer Use Polystyrene Containers
Large Colorado retailers can no longer distribute plastic checkout bags
Large Colorado retailers must continue charging a minimum $0.10 fee per paper checkout bag
Restaurants and other retail food establishments are prohibited from distributing polystyrene foam containers (commonly referred to as Styrofoam® containers)
Moving forward, restaurants must use eco-friendly options such as paper or biodegradable products. However, restaurants are exempt from the plastic bag ban and the bag fee since single-use plastic bags are considered important for food safety.
Businesses are allowed to use up any plastic bags and polystyrene containers purchased before January 1, 2024, but once this supply runs out, they must make a full transition to more eco-friendly products. There is a warning for the first violation, a $500 fine for a second violation, and up to $1,000 fine for subsequent violations.
Colorado Pay Transparency Amendments Are in Effect
New amendments to Colorado’s Equal Pay for Equal Work Act took effect on January 1, 2024. These new regulations place the following requirements on business owners:
Employers must place application deadlines on external job postings and internal promotion notices
Employers must notify any Colorado employee who will regularly work with a new hire or promotion within 30 days of the hiring/promotion decision
Employers must inform employees in roles with a defined, objective career progression of the requirements for advancement and what the pay increase will be if they are promoted
In addition, businesses with open job positions that are primarily performed in Colorado, or that can be performed in Colorado (such as remote positions), must include the following information in the job posting:
Hourly rate or salary compensation range
General description of bonuses, commissions or other forms of additional compensation associated with the job
General description of all employment benefits being offered, including healthcare benefits, retirement benefits and paid days off
Application deadline
How to apply for the job
Language Access in Insurance Documents Law Now in Effect
A new law went into effect on January 1, 2024 requiring insurance companies to provide certified translations of all documents. These translations must be available in every language they advertise in.
As part of this law, insurance companies must provide translations of the following items in every language they use as part of their marketing campaigns:
The application or interface the applicant uses to apply for, purchase or receive a quote for a policy
Any written coverage forms, including rejections or exclusions
The insurance policy, declarations page, explanations of benefits and other policy- or coverage-related documents
Therefore, insurance companies must now be careful about marketing in other languages. If they don’t have the resources to comply with these translation requirements, they will not be allowed to market in these languages.
Colorado Minimum Wage Increase for 2024
As of January 1, 2024, the Colorado has implemented the following minimum wage increases:
Minimum wage is now $14.42 per hour
For tipped workers, the minimum wage is now $11.40 per hour
It is also important to note that Denver has its own minimum wage which is higher than Colorado’s for individuals who perform services in Denver proper:
Minimum wage is now $18.29 per hour in Denver proper
For tipped workers, the minimum wage is now $15.27 per hour in Denver proper
Elizabeth Lewis Can Ensure You’re Compliant with New Colorado Laws
Keeping up with the many changes to Colorado laws can be dizzying for business owners. However, failure to comply with these laws can have devastating consequences for your business. Elizbeth Lewis can help make sure your business remains compliant with all changes to state laws that impact your operations.
The Law Office of E.C. Lewis provides comprehensive legal services for businesses. Elizabeth has been helping small and medium sized businesses in Denver and throughout Colorado since 2007. She understands the complex laws impacting businesses in a variety of industries, and she can provide the legal guidance necessary to help your business thrive.
A new federal law called the Corporate Transparency Act went into effect on January 1, 2024. This law includes new reporting requirements for small businesses. If you have an LLC, corporation or another business entity, you will probably be required to file information with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) bureau by December 31, 2024 about all individuals who have ownership in the company and/or who exercise control in the company as determined by FinCEN. Different timeframes apply to companies created after January 1, 2024.
There are significant civil and criminal fines and penalties for failing to file a report if your business is required to do so. These include possible fines of up to $500 a day and/or jail time.
Below is some important information that all business owners need to know about the Corporate Transparency Act. If you have any questions about how this law impacts your business, the Law Office of E.C. Lewis is here to help. Elizabeth Lewis is a small business lawyer with over 15 years of experience assisting small and medium sized businesses in Denver and throughout Colorado, and she can help you navigate the requirements of this new law.
What Is the Corporate Transparency Act?
The Corporate Transparency Act is a law enacted to crack down on illegal activities performed by businesses, including tax fraud, money laundering and the financing of terrorism. To accomplish this goal, the law requires businesses which meet established criteria to submit a Beneficial Ownership Information (BOI) Report to the FinCEN. These reports will allow the government to collect ownership information for a wide range of businesses operating in the United States.
The purpose of the Corporate Transparency Act is to prevent individuals with malicious intent from hiding or benefiting from the ownership of their U.S. businesses in an attempt to commit illegal activities. Congress has identified these common practices as a significant threat to our economic integrity and national security.
Who Is Considered a Beneficial Owner of a Company?
Under the Corporate Transparency Act, individuals who directly or indirectly have a significant ownership stake in a company are considered to be a beneficial owner. Individuals who meet the criteria:
Have a major influence on the company’s decisions or operations, even if the person does not have ownership in the company
Own at least 25% of the company (i.e. through shares, membership interests, or other means)
Have a similar level of control over the company’s equity
Who Needs to File a BOI Report?
Corporations, LLCs and other entities established by filing a document with a Secretary of State or similar office under the law of a state or Indian tribe must file a BOI report unless the business qualifies for an exemption. In addition, certain businesses established in foreign countries that are registered to conduct business in the United States are required to file a BOI.
What Are the BOI Report Filing Exemptions?
There are 23 types of entities that are exempt from the reporting requirements. FinCEN’s Small Entity Compliance Guide includes checklists for each of the 23 exemptions that may help determine whether your company qualifies for an exemption. You may visit www.fincen.gov/boi to access the guide and check if your company is exempt.
Please note, most small businesses ARE NOT exempt and will need to file.
What Information Must Be Included in Your BOI Report?
The information you must include in the BOI report depends on the date your company was created. Companies created prior to January 1, 2024 must provide information about the company and its beneficial owners. Companies created after January 1, 2024 must provide these same details and also provide information about their company applicants.
A company applicant refers to the person who files the document creating the domestic reporting company and the person primarily responsible for directing or controlling the filing if multiple people are involved in this process.
Company information that must be reported includes:
Full legal name
Any trademark or “doing business as” (DBA) names
Street address of the principal place of business
Jurisdiction of formation
Taxpayer ID number
Foreign companies will need to provide the address information for their U.S. operational location.
Information regarding beneficial owners and company applicants (when applicable) includes:
Full legal name
Date of birth
Current residential street address
Unique identifying number and issuing jurisdiction from a current U.S. passport, state or local ID document, driver’s license, or a foreign passport (if the individual doesn’t have any of the other documents)
Image of the document chosen for the requirement above (passport, state ID, etc.)
Updating Your BOI Report to Reflect Changes in the Reported Information
You will need to file an updated report within 30 calendar days if any changes in the information reported about the company or beneficial owners occur. This includes:
Changes associated with any beneficial owners, including the required information associated with existing beneficial owners and the addition or subtraction of beneficial owners to the company
Changes to the reporting company which result in the company becoming eligible for an exemption
How Do I File a BOI Report?
If you are required to file a report, you may be do so electronically through FinCEN’s website. Please note, if you use a search engine to find the site to report information to, you may be directed to a privately owned site that either:
Requires payment to help you complete the registration, and/or
Is not legitimate and is being used to steal your identity
Just like when dealing with the IRS or the state, itis essential that you go to the government website provided.
Please note that once you have registered, there are requirements that you keep the information current. These requirements can be found on www.fincen.gov.
Beware of Scams
If you receive any solicitations by email, US mail, or phone from someone other than your CPA or attorney regarding the Corporate Transparency Act reporting requirements, please do not follow any instructions on these solicitations. Many of them are not legitimate.
With this new law, there most likely will be an uptick in the number of these solicitations that you will receive. If you have any questions about whether something you get in the mail is legitimate (whether about the new FinCEN reporting requirements, labor law posters, corporate seals, or anything else), you should always consult with an experienced Denver business law attorney such as Elizabeth Lewis prior to paying any third party for unsolicited services or providing any personal or business-related information.
Elizabeth Lewis Can Help Ensure You’re Compliant with Colorado Laws Impacting Businesses
In addition to the new BOI reporting requirements, there have been a lot of changes to Colorado law in the past few years. If you have not had your contracts, employment agreements, employment handbooks or company documents (bylaws, operating agreements, etc.) reviewed recently, it may be time for a checkup. Elizabeth Lewis can help make sure your business remains compliant with all the latest changes to state laws.
The Law Office of E.C. Lewis provides a wide range of legal services for businesses, and we can help set your business up for success. We can assist with the following services:
Business organization documents such as bylaws, operating agreements, buy-sell agreements, and partnership agreements
Leases for both commercial tenants and commercial and residential landlords
