There are a few steps Colorado business owners can take before they open their doors that might prevent expensive litigation down the road. Entrepreneurs who are starting a business with no employees must be sure to treat their business like a business. The first step is to form a legal entity for the company. Without this in place, business owners who work as independent contractors or consultants risk losing their personal property if a dissatisfied client sues for damages.
In addition to establishing a business as a legal entity, it is vital that business owners keep their business and personal finances separate. Mixing finances by paying household bills out of a business account can put a business owner at risk of losing their personal property in a legal dispute even if they set up their company as an LLC or corporation.