What is business litigation?
A. Business litigation involves business people representing a variety of industries on local, state and federal levels in matters pertaining to such diverse areas as:
Business Torts: which includes commercial defamation, patent or trademark infringement, trade dress, interference with contractual or economic relations, breach of fiduciary duty, unfair and deceptive trade practices, fraud and misrepresentation, etc.
Class Actions: including securities fraud, commercial and tax issues, and minority shareholder rights.
Contracts: such as a service contract with a primary vendor, an output contract with a key supplier, a sales contract with an important customer, or any other kind of written or oral agreement.
Professional Malpractice: accountants, architects, engineers, doctors and lawyers all face the risk of malpractice claims that can jeopardize business, reputation and finances.
Securities and Antitrust: this includes claims involving securities and investments, claims arising under federal law or state securities laws.
Shareholder and Corporate Governance: shareholder inspection rights, duties of directors and officers, conflicts of interest, derivative actions, business judgment rule defenses, change of control provisions, dissent and appraisal proceedings, involuntary and judicial dissolution, minority shareholder rights and claim and industry-specific issues..
Telecommunications: technical and industry-specific issues, including issues arising out of the Telecommunications Act of 1996.
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What do business law lawyers do?
A. Business law encompasses rules, statutes, codes and regulations, that are established to govern commercial relations and provides a framework for you to conduct business in and in which business law attorneys help you in that process. Business law attorneys help you with many different aspects of very diverse business law areas including: acquisition, banking and finance law, business formation and organization, business litigation, business negotiations, business planning, divestiture, merger, sale of businesses, transactional business law, along with environmental, intellectual, property, labor and civil laws.
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What is involved when litigating a business issue?
A. This depends on the issue. The business owner follows the same process for business litigation as he or she would for any civil lawsuit, including usually obtaining an attorney, pretrial matters such as motions, possible settlement negotiations, trial, and possibly appeals.
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What are some alternatives to litigation?
A. Businesses often use Alternative Dispute Resolution (ADR) methods. The ADR process usually utilizes arbitration or mediation. These alternatives are attractive because they are often less expensive and more efficient than traditional litigation.
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What is the difference between mediation and arbitration?
A. Mediation is a cooperative process and uses an experienced neutral third party (a mediator) to facilitate consensus building and discussion, in order to reach a mutually satisfactory resolution. In most cases the results of the mediation are non-binding.
Arbitration also employs an experienced neutral third party (an arbitrator), who listens to both sides and makes a decision, which is usually binding.
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Is the result of mediation or arbitration binding?
A. The judgment in arbitration is usually binding on the parties. Often the parties decide prior to the arbitration proceeding that the findings of the arbitrator will be final and legally binding. This agreement is usually formalized by a contract signed by all parties involved. Much less commonly, parties may agree to non-binding arbitration, viewed as a negotiation technique. Mediation is not binding and the parties, if dissatisfied with the result, can move on to a courtroom proceeding.
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What are some of the most common types of business organizations?
A. The most common types of business organizations include:
Corporation: the default form of a corporation is a C Corporation (also known as Subchapter C Corporation). Smaller corporations typically file for the S Corporation (Subchapter S) tax election so they are not double taxed.
Limited Liability Company (LLC): a hybrid formation that provides personal liability protection similar to a corporation, with the flexibility and tax advantages of a single proprietorship or partnership.
Sole Proprietorship: you are the only owner of the business.
Partnership: can take the form of a regular partnership, a general partnership, limited partnership or Limited Liability Partnership (LLP).
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What is a nonprofit corporation?
A. A nonprofit corporation (whether incorporated or as an unincorporated association) is an organization in which no part of the income is allowed to be distributed to its members, directors, or officers. The corporation is not prohibited from making a profit; the prohibition is that profits can not be distributed to the members, officers, or directors of the organization. Nonprofit corporations are formed pursuant to state law. Nonprofit corporations must apply for tax exempt status, both at the federal and state level. A nonprofit corporation formed under IRS code Section 501(c)(3) may be formed and organized to operate for some religious, educational, literary, charitable, or scientific purpose. It must be noted that a nonprofit corporation may also be formed for other purposes pursuant to various other sections of the IRS code.
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What do I do if someone won't honor my contract?
A. First, it is very important to begin to preserve evidence. Collect every piece of paper that has any information about your contract and when the other person did not honor it. Contact an attorney to find out what else may be considered as evidence.
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Should I hire a business law attorney?
A. There are a lot of obvious reasons to retain a business law attorney. In all aspects of a business, there are potential problems that a layman can run into. From what type of business you form, to managing employee relations, pay, retirement funds, etc., it is highly recommended to have an attorney advising you in your commercial matters.
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How will my attorney be paid?
A. That depends on what type of litigation you have. For the most part, Schrom & Shaffer works on a contingency fee basis. On occasion we have hourly, flat-fee, or percentage fee cases. We will consult with you regarding fees before you sign any agreements.
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Do shareholders have any legal responsibility to one another?
A. The traditional legal view holds that shareholders have no special responsibilities to one another. In closely held businesses, however, majority shareholders can damage the interests of small shareholders. Since most investors do not want to buy closely held shares, minority shareholders have few options when their interests are compromised. In response, some states and courts developed fiduciary duties among shareholders of closely held businesses.
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