When business assets are sold in Colorado or any other state, the seller may have to pay capital gains taxes on any profits realized. Capital gains can be categorized as short-term or long-term gains depending on how long an asset was held. Short-term gains are generally taxed at an individual's ordinary income tax rate while long-term gains were taxed at 17% as of 2018.
Medicine Man Technologies is based in Denver, Colorado, but it is looking to grow into a national or international business. It has recently spent more than $300 million on entities both in Colorado and in other states. These acquisitions have increased the company's revenue from roughly $10 million at the start of 2019 to about $170 million. The purchases were funded in part by an investment from a firm called Dye Capital in Florida.
Acquisitions and mergers help Colorado companies gain efficiencies and offer other benefits. There is definitely a lot of money being used on these deals; in 2018, $4.6 trillion was spent in the United States on acquisitions. However, one may wonder about the effect it has on employees and what can be done to help them.
Business owners in Colorado may have thought a great deal about how they want to shape their companies. After all, their vision, drive and inspiration led them to want to become entrepreneurs to begin with. However, another important part of business success can include planning for a company founder's exit. Experts advise that an exit plan should be part of a business plan from the beginning, especially as part of understanding an owner's primary goal in launching the company.
Business owners have a few options when it comes to exiting or expanding, and many find themselves buying another enterprise or selling to another party at some point. The process of a merger or acquisition in Colorado can raise any number of legal issues. According to members of the Forbes Business Development Council, the most important things to consider include asking the tough questions, knowing the deal breakers, gathering information and checking the culture fit.
Residents of Colorado who have a privately owned business have a number of options for making their business public, including conducting a reverse merger. Business owners may consider using a reverse merger over a traditional initial public offering, which requires an investment bank to underwrite and issue shares of the business, because the process of a reverse merger is shorter, less complicated and less costly.
A reverse merger may be a good idea for some Colorado companies that want to enter the public arena. This shorter and less expensive approach to going public is a popular alternative to the initial public offering approach. In the process, a company can hire an investment banking firm to oversee the underwriting process. The firm issues the shares for the company.
Like all big things that require intense preparation, selling a business can be a messy affair filled with intricate details. The process can also be quite emotional, especially for an entrepreneur who started a company from the ground up. Therefore, any business owner in Colorado planning to sell the fruits of their hard labor should take several factors into consideration.
When there are two Colorado businesses being merged, separate IT entities have to be combined. From infrastructure to how resources are being utilized, all functions between the two entities must be properly aligned. The integration process should be approached with caution when dealing with reverse mergers or any transaction involving the sale of a business.
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.