How do I start a business? This is a common question client’s or potential clients ask a Denver business attorney. Although there are many issues to consider when starting a business and different directions that can be taken, the article below should outline in general the steps that need to be taken.
– First, you need to consider what type of entity you want your business to be. You could form a corporation, a partnership or if you are the sole business owner you could operate as a sole proprietorship. Our business attorneys would recommend you always consult an attorney to discuss the type of business entity you will establish.
– After you have made your choice of entity, you will need to file the appropriate articles with the Colorado secretary of state. If you are forming a corporation, you will need to complete articles of incorporation. If you are forming a partnership, you will need to file articles of organization. These documents can be filed online with the Colorado Secretary of State. Please know that a fee does apply to the file the appropriate articles. Further, depending upon your business, you may choose to file multiple business entities. For example, you may establish one business to hold certain assets and act as a holding company and file another entity that would operate and conduct the day to day operations of the business.
– Once you file the articles of incorporation or organization, you likely need to obtain an Employee Identification Number, which is typically referred to as an EIN. You can obtain your EIN online at the IRS website (www.irs.gov) by completing Form SS-4. The IRS has a link on their website to obtain the EIN and generally you can obtain the EIN immediately.
– Now that you have the appropriate articles and your EIN, you should be able to open up a business bank account.
If you establish a corporation, you will want to have corporate bylaws to direct and control the corporation and corporate decisions. Further, the corporation will establish a board of directors and officers, and should establish a method to insure that the corporate requirements are met. If certain corporate requirements are not met, the limited liability afforded to a corporation could be lost. If you establish a partnership, such as a limited liability company, our business attorneys would highly recommend that the partners enter into some form of partnership or operating agreement that will direct and control certain issues within the partnership such as how items of income, gain, loss and deductions are allocated amongst the partner and other pertinent partnership issues.
In addition to the above, we recommend you speak with a tax attorney to make sure you understand the tax implications to the business and business owners based upon the entity that has been established.
As a Denver business attorney, John McGuire has helped many business owners establish entities, draft the appropriate documents and analyze tax issues & implications to the business and business owners.
You can schedule a free consultation with a Denver business attorney or tax attorney by contacting The McGuire Law Firm.