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Legal Aspects of Doing Business in North America - 2nd Edition - Loose leaf
Legal Aspects of Doing Business in North America - 2nd Edition - Electronic
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Colorado
Harry L Arkin
Denver, Colorado, United States
Introduction
Colorado is one of the fastest growing areas of the United States from both an economic
and population perspective. Its preferable climatic conditions (the capital city, Denver, is
at an elevation of 1,600 meters), lacking in humidity, but with plentiful sunshine has
drawn both industry and people to the state which is known among many Europeans as the
‘Switzerland of America’. Denver is the transportation, geographical, and commercial
center of an area reaching north to south from the Canadian border to theMexican border
of the United States and, east to west from the geographical center of the United
States to California.Outside ofWashington,DC,Denver has the largest number of governmental
agencies represented in one metropolitan area in the United States.
Its airport, Stapleton International, is the eighth busiest in the entire world. The population of
Colorado is 3,099,400 (Census, 1980); and total personal income in Colorado in 1983 was
US $39,500,000,000; retail trade in 1983 in Colorado was US $21,360,000,000. Agriculture,
mining, manufacturing, and tourism are the largest four contributors to the economy
of Colorado (1985 Economic Forecast, United Banks of Colorado).
Business/Investment Purpose and Form
Purpose
The purpose for which a foreign businessman, investor or other entity wishes to enter the
business, investment and legal jurisdiction of Colorado will determine the form in which
such entry will be structured. The issues to be considered in this chapter will deal with
basic forms of business and investment, ie, sales of products into the jurisdiction of Colorado,
manufacturing (including licensing) and investment. The author has had substantial
involvement relating to foreign investments in Colorado in all of these areas, and thus
assumes some degree of confidence in relating, albeit here in the most general terms,
some of the concerns with which one must deal in considering entering into business
and/or investment in Colorado.
Form
The common forms of conducting business and/or investment in Colorado are similar to
those available in other jurisdictions within the United States namely, sole proprietorship,
agency (including acting as licensor or licensee), partnership, limited partnership, joint
venture and corporation.
Only one form of profit oriented corporation exists under Colorado law as opposed to different
forms of limited liability corporate entities existing under some non-United States
legal systems. However, the limited partnership (in which one partner assumes unlimited
liability), has similar characteristics to some limited liability corporations under other
legal systems. One feature which most non-Americans find unique is the ease and speed
of both corporate formation and dissolution in the United States. In Colorado, a corporation
may have but one director if it has only one stockholder. The legal requirements of
formation of a Colorado corporation may be accomplished, for example, through an attorney
acting on behalf of a client. Only two different individuals are required as officers, ie,
President and Secretary, of a corporation under Colorado law
General Considerations
The State of Colorado places no restrictions on foreign enterprises doing business or making
investments in the State. There are no restrictions of any kind on the form of enterprise
available to foreign investment or business interests in Colorado. Many foreign business
and investment situations already exist in Colorado. Examples vary frompure investments
in individual vacation homes at the best known ski areas of Aspen and Vail, and The Club
Mediterranee facility at Copper Mountain; a factory producing articulated buses for the
North American market at Limson, in eastern Colorado; commercial and office buildings
and other businesses directly or indirectly owned by individuals; corporate and ‘off-shore’
trusts comprised ofAsiatics, Europeans, Canadians, SouthAmericans, andmiddle-Eastern
investors and, for example, a subsidiary of a large French mining corporation.
Types of Businesses
Any form of business entity may engage in sales in Colorado. Business licenses for places
of business are required as well as a sales tax license available through the Colorado
Department of Revenue. Local sales tax licenses are also required for permanent establishments
in most communities. Services are not subject to sales tax, only tangible
products. Entities that might engage in sales activities might include individuals (ie, proprietorships),
partnerships (both general and limited), joint ventures, and corporations.
Initial entry into sales activities in Colorado, as elsewhere, might be made through independent
sales agents which might ripen into distributorships or expand into a joint
venture, or, initially or ultimately the establishment of a subsidiary marketing entity.
Customarily, the limited liability of the corporate form of doing business, hereinafter discussed,
would be dictated for a manufacturing business. Again, initial ventures might be
initiated via
