A recent Colorado supreme court decision made the protections afforded limited liability companies “LLCs” even better in the state of Colorado–particularly, given that Colorado is a hotspot for business startups.
An LLC is a type of business entity that many startups choose to use as their corporate structure. The case centered around a creditor that sought to collect an LLC’s debt from its owner members. Generally, the personal assets of the members of an LLC are shielded from such liability. Yet this case was a bit different as the creditor claimed the LLC’s members transferred assets out of the LLC while the LLC was in a “zone of insolvency” and thus claiming the members should be required to pay back those assets to the LLC so that the LLC could pay back the creditor. The Colorado supreme court overturned the lower court’s ruling and sided with the LLC and in doing so, made the protections of a Colorado LLC even stronger. And, consequently, made organizing as a Colorado LLC much more desirable. Now, Colorado, like Delaware, is a premier place to organize your business.
As our previous post detailed, Colorado’s startup community is one of the largest in the nation and with this ruling, the benefits of starting a Colorado startup as a Colorado LLC are now even greater. This ruling only strengthens our belief that Colorado is a premier place to organize your startup business.
Colorado Startup Lawyers
The Colorado startup lawyers at LaszloLaw, a Boulder, Colorado law firm, advise startups and existing LLCs and provide legal counsel for their growing businesses. Our attorneys recognize the importance of developing lasting client relationships and practice preventative law so that your business is prepared for the future. Contact one of Colorado startup lawyers today to discuss your business needs.