Brownsville Business Attorney FAQs

Are mediation, arbitration, and litigation the same things?
No. Each is a different process for resolving disputes. Litigation occurs when a civil lawsuit has been filed. The lawsuit may or may not go to court depending on whether or not the case can be settled out of court.

Arbitration is similar to litigation in that each party involved in the dispute presents his case before a representative who decides the outcome. In this case, the representative is a neutral arbitrator, not a judge in a courtroom, who applies his knowledge of the law to reach a decision that should conceivably be similar to how a judge would rule on the case.

Mediation is similar to arbitration in that a neutral third party hears both sides of the case; however, instead of simply handing down a decision based on an interpretation of the law, the mediator works with the parties in reaching a compromise.

In general, arbitration is legally binding (unless the parties agree to a non-binding agreement) while mediation is usually non-binding.Business Attorney FAQs

What is a contingency fee?
Some attorneys charge contingency fees for legal services involving certain lawsuits, such as class action lawsuits. What this means is that the attorney agrees to be paid only if the client wins a monetary award of which a percentage is then taken as compensation. Contingency fees allow the client to pursue a case with little risk while the attorney is highly motivated to win the case.

Can I set up my organization as a non-profit?
If the organization is designed for educational or philanthropic purposes and not profit driven, it might be a good candidate for a non-profit structure. As a non-profit, your organization would not pay federal or state taxes. However, you’ll need a business attorney to help you set up your non-profit corporation just as if you were setting up any other entity.

I’m concerned about personal liability, should I incorporate my business?
Certain types of corporations can provide you with personal liability protection should your organization default on a loan or become the target of a large lawsuit. For example, if your business defaults on a loan and is not structured with this type of protection, you may be held personally liable and you could lose your personal assets such as your home and bank accounts. However, forming a corporation doesn’t give you a license to be reckless. You could still be personally liable for your actions even if you incorporate your business. For example, if you use personal loans to fund your Brownsville business or sign contracts in your own name and not the business’s name, you could be personally liable. Your business attorney can help you select the right type of organization for your business while also helping you with limiting your personal liability.

I am the sole owner of an LLC. I was under the impression that I do not need a Federal Employer Identification Number (FEIN) but have been told otherwise. Do I need a FEIN?
If you have one or more employees, yes. In the past, sole owners of LLCs with employees were able to use their own taxpayer IDs, but as of 2009, you must have a FEIN if you will be reporting and withholding employment taxes.

I want to avoid the hassles of hiring employees and plan on using freelancers in my business. Is this a good idea? Should I make freelancers sign a contract?
Hiring freelancers or independent contractors to perform some of the duties of your business can be a win-win situation for both you and the freelancer. However, you must make sure that these independent contractors are truly independent and not actually employees. If you misclassify legitimate employees as independent contractors, the consequences can be stiff. Yes, establishing a written agreement between the independent contractor and your organization is crucial. Even with a contract, you must maintain a company/contractor relationship and not allow the relationship to slip into an employer/employee relationship.

Will I own the copyright of the work produced by freelancers?
Any experienced business attorney will tell you that copyright law is tricky. In general, you will not own the copyright to any work, such as artwork, computer software, music, or written text, unless the independent contractor assigned the copyright to you. These written assignments are often included directly in the independent contractor agreement. Another issue is “work for hire.” Do not assume that when you commission a project that it is understood to be a “work for hire” – get it in writing.

These FAQs are but a brief sampling of the dozens of questions fielded by the Brownsville business attorney Web site. Clearly, business law is complex. In fact, most of the business law projects taken on do not involve lawsuits, disputes, and courtrooms. If you need help with any legal issue from entering into a contract with a freelancer and forming a corporation to filing a class action lawsuit, we can help!