What are Blue Sky Laws? The Colorado Blue Sky Laws are a set of regulatory laws. They govern the sale of securities and investment in Colorado. The term comes from the phrase “blue skies,” meaning “honest and open.” The US Securities Act of 1933; one of the first blue sky laws enacted by Congress to protect investors from fraud and misrepresentation. It requires all companies issuing securities to register with the SEC before they can sell them publicly. These laws…
A question often asked is whether or not a single member LLC (SMLLC) will protect the owner from personal liability should something go wrong and the company is sued. In other words, can a Colorado plaintiff easily pierce the corporate veil and go after the personal assets of the business owner? Commonly, known as “piercing the corporate veil“. The answer of course is, it depends. Since Colorado allows LLCs to have only one member. C.R.S. 7-80-204(g) and can be for…
Moving to Colorado? If you, a friend, or a family member have recently moved to the Centennial State, and you’re wondering what to do with your LLC, look no further. I have your answer! You can do one of three things: you can register it as a foreign LLC; dissolve it and start anew; or create a new LLC and merge it with the old one. Keep It As A Foreign LLC A foreign LLC is one that’s registered in…
Frequently, I’m asked, “What do you put in an operating agreement?” And like any good lawyer, I respond “Depends.” I’m not avoiding the question. Rather what’s goes in to an operating agreement depends on many factors. For example, membership size and funding. The typical operating agreement for a single member LLC is about 10 pages. The average operating agreement I draft for a two or more member LLC is usually about 50 pages. That’s a big difference in content between…
I often come across small business owners who’ve made the S-Corp election for their LLC. Usually, after learning about their business, I’m at odds why they choose to do this. I understand by making the election an owner can save on self-employment taxes through a reasonable salary and dividend payments. I believe however, in the majority of instances, the tax savings to the business owners, do not outweigh the legal and tax advantages lost to the LLC on making the…