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Denver Business and Commercial Law Blog

7 ways to protect trade secrets

The movies have conditioned us to believe that trade secrets are most likely to be stolen by Eastern European cyber-criminals or foreign intelligence agents bent on preventing some worldwide disaster. However, a statistical study of trade secret theft shows that trade secret thieves are most likely to be those you already know: former employees.

It's who you know

Montrose Memorial Hospital settles in age discrimination lawsuit

Age discrimination has no place at a company, and hospitals are no exception. A recent lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC) highlights how prevalent age discrimination can be and that workers have rights worth protecting.

It was announced that Montrose Memorial Hospital will pay $400,000 and furnish other relief to settle an age discrimination lawsuit

Analyzing risk when acquiring a company

When a credit union or other financial services company in Colorado or elsewhere merges with another entity, it may expose itself to any risks posed by that enterprise. It may be a good idea to have a cybersecurity professional analyze any risks that another business may pose if it is acquired. Such a review should focus on potential problems related to people and processes just as much as it does on issues related strictly to IT.

If a company is supposed to PCI compliant, it could incur significant fines for not following those guidelines. A combined organization may also have to spend money getting certified or deal with lost revenues from not being able to process transactions. A thorough study of a company's cybersecurity policies and capabilities may make it possible to gauge how expensive an acquisition may truly be.

Can posting about your employer on Facebook get you fired?

Your boss is just awful. You know it, your co-workers know it, but you want to inform the world about their terrible ways. What better method to exercise your anger than a rant on Facebook? As satisfying as it would be to unleash the months of built up hard feelings, you should think twice before you let your fingers do the talking.

Privacy settings cannot save you

Financing advice for startup companies

Many new companies in Colorado inevitably run into the need for business loans. An injection of cash can help a growing enterprise keep up with rising demand or acquire new equipment or real estate. While startup companies generally lack the financial track record required to get a bank loan, the Small Business Administration and online lenders could provide access to money. Choosing the right amount to borrow without overextending a youthful business represents the crucial first step when seeking a loan.

When calculating what to borrow, a business owner needs to calculate the debt-service coverage ratio. This figure arises from looking at how a loan payment would impact average cash flow. The payment level that does not put excessive strain on operating cash indicates how much a business can comfortably pay every week or month.

Hidden costs involved in building a startup

For plenty of people living in Colorado, starting a business is a dream come true. After all, the autonomy and freedom that come with being self-employed are enviable, not to mention the ability to shape the world as one sees fit whether it's by selling scrumptious desserts or offering phenomenal customer care in the IT field.

Regardless of the nature of the business itself, entrepreneurs have to dole out cash to get things started, and some of these costs may take them by surprise. For starters, entrepreneurs have to pay for business insurance in order to protect themselves against possible future liabilities. One insurance company asserts that small businesses pay, on average, $741 just to protect themselves against general liability. Another cost that should be taken into account is self-employment taxes, which tend to be higher than taxes for employed individuals. This discrepancy is due to the fact that self-employment taxes pay for both Social Security and Medicare. In addition to increased taxes, entrepreneurs have to contend with the costs of licenses and permits, forcing them to keep reserves for a rainy day.

New tax law lowers corporate tax rate on intellectual property

The Tax Cuts and Jobs Act of 2017 appears to contain good news for businesses in Colorado that earn income from intellectual property. Previously, corporations might pay as much as 35 percent in taxes on royalties from patents and other intellectual property. Tax reform has lowered the corporate tax rate to 21 percent, but the act specifies a lower rate of 13.125 percent for income from intellectual property.

According to the new tax code, this rate will last for seven years. A slight increase to 16.4 percent will apply thereafter. This feature of the tax law might induce corporations that are currently holding their intellectual property assets in overseas companies to bring them back  to the United States. Such companies might gain a lower tax rate domestically while actually bringing a taxable asset into the country.

Business accelerators and incubators

Entrepreneurs in Colorado who are interested in ways to expand their business may consider using business incubators or business accelerators. These two options can help entrepreneurs overcome the challenges associated with finding the money their business may need, but it is important that entrepreneurs know which one is appropriate for their situation.

Business incubators can be likened to the incubators that are used to house and protect eggs before they hatch. They are most helpful for entrepreneurs who are armed with little more than a novel business idea. Incubators are able to provide valuable resources, such as connections to prospective business partners or space where entrepreneurs have the freedom to work on their ideas. The typical incubator-entrepreneur relationship may last up to five years or until the startup is able to stand on its own and be launched.

Expecting new works in the public domain next year

For today's artists to be able to use the works of others freely, said works have to be in the public domain; otherwise, the works would still be protected by copyright laws. Citizens of Colorado might be surprised to learn that no new works have entered the public domain in the U.S. since 1923, according to recent estimates.

Internationally, the duration of copyright laws that apply to a piece of work extends beyond the author's natural life by 50 years. Conversely, in the U.S., it takes 70 years after an author passes for his work to enter the public domain, and this long stretch of time can give rise to several complications such as finding out who the proper right heir is once the author has died.

What transpired in venture capital in 2017

Entrepreneurs in Colorado and throughout the country often rely on venture capital to help their companies succeed. In 2017, business owners received $84.2 billion in funding from venture capital firms according to the National Venture Capital Association and Pitchbook. However, there were fewer deals done as the tech industry is going through a period of contraction. This is partially because the median age of companies seeking capital has increased since 2013. The median age of companies seeking Series A funding is about 3.5 years.

Another trend in 2017 saw venture capital firms investing more money into unicorns. A unicorn is a startup company that has a valuation of $1 billion or more. During 2017, unicorn companies were involved in 2 percent of all deals. However, they received more than a fifth of all dollars invested, which translated to more than $19 billion.