Buying or selling a business in Colorado

What the engagement covers

A Colorado acquisition usually moves from a letter of intent to due diligence, a definitive purchase agreement, and closing. Auxo Law drafts or reviews the letter of intent, organizes diligence, negotiates the asset or equity purchase agreement and disclosure schedules, and coordinates with brokers, lenders, and accountants through closing.

Colorado deals have their own pressure points. Restrictive covenants are tightly regulated, many cities collect their own sales tax, and the state's wage and leave laws affect how employees move from seller to buyer. Planning for those early keeps surprises out of the final week.

Typical scope

• Letter of intent drafting, review, and negotiation
• Due diligence on contracts, leases, local tax accounts, and entity records
• Asset purchase or equity purchase agreements
• Sale-of-business non-compete and transition services agreements
• Disclosure schedules, bills of sale, assignments, and closing checklists
• Coordination with brokers, lenders, and the client's accountant

Colorado rules that shape a business sale

These Colorado-specific issues come up in nearly every purchase or sale:

• Non-competes limited to the sale-of-business exception. Colorado voids most non-compete agreements. One of the narrow exceptions covers a covenant made in connection with the purchase and sale of a business or its assets. Buyers who want the seller to stay out of the market need the covenant drafted to fit that exception; key-employee restrictions are judged under the separate, stricter employee rules. Source: C.R.S. § 8-2-113 (as amended by HB22-1317).
• Sales tax follows the assets. Unpaid Colorado sales tax can become a lien on the business's goods and equipment, and a buyer of the business may be held responsible for it. Buyers typically request a tax status letter from the Colorado Department of Revenue and hold back funds until it is clean. Source: Colorado Department of Revenue — Taxation.
• Home-rule city taxes and licenses. Denver, Aurora, Lakewood, and many other home-rule cities administer their own sales tax and business licensing separately from the state. A buyer needs to confirm local accounts are current and that local licenses can be obtained in the buyer's name. Source: Colorado DOR — Home-rule jurisdictions.
• Entity filings with the Secretary of State. Before closing, confirm the seller's entity is in good standing with the Colorado Secretary of State, with periodic reports filed and a registered agent on record. Delinquent entities can be reinstated, but it takes time. Source: Colorado Secretary of State — Business.

Colorado's rules change regularly—the non-compete statute was rewritten in 2022—so deal documents should be checked against current law rather than an old template.

This summary is general information, not legal advice for your situation, and the law changes. Ask about how these rules apply to your business.

How a Colorado deal runs remotely

Auxo Law serves Colorado clients remotely and does not maintain a public-facing Colorado office. In practice, that changes very little: purchase agreements are negotiated on video calls, drafts move by email, and closing documents are signed electronically. Local brokers, lenders, and title companies handle anything that must happen on the ground.

You have direct access to the attorney negotiating your deal from the first call through the final signature.

See the Colorado business attorney overview or read how virtual counsel works step by step.