Cedar Rapids, Iowa Business Law Attorney
It is said that the law touches everything. I have certainly found that to be true in my practice as well as in my daily life. Nowhere is this maxim truer, however, than in business law. Every aspect of business is impacted by two forms of law —— first, the statutes and regulations at the municipal, state, and federal level that govern business activity; and second, the private law of contractual relations.
My name is Jonathan D. Schmidt, and I counsel clients on a wide variety of business issues for both individuals and companies, from small startups to multimillion dollar business litigation involving construction lawsuits, contract lawsuits, company formation, employment lawsuits, negligence, fraud and landlord/tenant disputes, among others.
The Legal Solution vs. the Business Solution
The number one complaint among business people concerning the legal services they receive is that the perfect legal solution is anything but the perfect business solution. “Take no prisoners” litigation, for example, might “win” a business dispute, for example, but might also destroy a business relationship that your company would have preferred to protect.
Each Case is as Unique as Your Fingerprints
Every company has its own individual goals, vision, needs, market position and corporate culture. Likewise, every case is a complex fact pattern that will never be exactly duplicated. As a business lawyer, my job is to master the details of your circumstances and work with you to craft a business solution that maximizes your utility and protects you against legal risks to the maximum extent possible.
“Jonathan represented myself and 6 partners with our employment contract. He was extremely thorough in his review. We were well prepared for our contract negotiations and, with Jon’s council, we achieved our goals.”
December 29, 2013
Some of My Practice Areas
- Business litigation: Not all business disputes can be resolved amicably, and when negotiations fail, sometimes litigation is the only alternative. In many cases, however, two parties in the dispute would still prefer to retain their business relationship despite unavoidable litigation. This balancing act requires considerable skill and foresight.
- Construction disputes: The more complex a business arrangement becomes, the more legal groundwork is required and the greater the potential for conflict. Construction projects are particularly prone to legal problems because of the conflicting interests among general contractors, subcontractors, property owners, and government bureaucrats.
- Business formation: One of the first decisions you must make when starting a new business is which business vehicle to use —— a sole proprietorship, a general partnership, a limited partnership, a limited liability company and a corporation all offer distinct advantages and disadvantages. Business formation cannot be taken lightly, because it lays the groundwork for everything that is to come.
- Employment disputes: Hiring employees is a necessity for most companies, even though it greatly complicates the legal environment due to the highly regulated nature of the employment relationship. Perhaps the most important aspect of all forms of employment other than at-will employment is drafting an effective employment contract that protects the interests of the employers yet properly incentivize employees.
- Breach of contract: A breach of contract claim can be tricky business. Determining whether a breach can be characterized as “material”, for example, carries significant legal risks. In many cases, maintaining a harmonious business relationship with the other party is just as important as resolving the breach. Often, negotiation, mediation, or arbitration are considered preferable to courtroom litigation.
- Negligence: “Negligence” refers to a breach of the duty of care imposed upon a party by legal standards. In a business context, this often means an elevated standard of care that is applied to certain professionals such as corporate directors. Another common application of negligence in a business context is when a company is held liable for the negligence of their employee.
- Fraud: Fraud is one of the most common complaints in business litigation. A fraud claim might arise from a customer’s claim of deceitful business practices, or it could arise when a business claims that it was induced to enter into a business deal with another company based on deliberate misrepresentations.
- Landlord/tenant disputes: Landlord tenant disputes, especially with respect to commercial tenancies, are among the most common of all causes of business litigation. Although Iowa law is rather protective of residential tenants, it is much less protective of commercial tenants, due to the assumption that the lease was entered into between two sophisticated parties.
Frequently Asked Questions (FAQs)
Do I need a Federal Employer Identification Number?
A Federal Employer Identification Number (FEIN) is required for certain businesses. Your business needs one if it:
- is a sole proprietorship with employees;
- is a corporation;
- is a partnership;
- sells alcohol, firearms or tobacco; or
- is required to pay federal excise taxes
Otherwise, a FEIN is not required (a sole proprietorship with no employees, for example).
What are some clauses that my commercial lease should address?
Following are some of the most important issues:
- Tenant improvements
- Property taxes
- Operating expenses
- Repair and maintenance
- Subletting and assignment
- Remedies for landlord default
- Termination or relocation
- Non-competition (the landlord promises not to rent to competitors)
What is “at-will” employment?
In “at-will” employment, you can be quit at any time for any reason, and your employer may fire you at any time for any reason (except discrimination based on certain characteristics such as race, gender, or ethnicity). Your employment is generally considered at-will unless you have agreed otherwise with your employer in an employment contract.
How can a contract review help my business?
A contract that looks good on its face might contain critical flaws that will not be obvious to a non—lawyer – it might violate the law, for example, or its terms may be ambiguous to allow unforeseen consequences. A good contract lawyer can spot these flaws and advise you on how to remedy them or mitigate the risks. Who better to review your contract for problems than someone who litigates contract disputes?
Should I form my business as a Limited Liability Company (LLC) or some other business vehicle?
That decision depends on a lot of factors. The main advantage of an LLC is its favorable tax treatment combined with fewer of the formalities that encumber corporations. The right answer to this question will depend on the details of the business and on the nature of your company objectives.
What’s the difference between forming an LLC and forming an LLP?
An LLC is formed by filing the appropriate paperwork, including complete Articles of Organization, with the Iowa Secretary of State. To form a Limited Liability Partnership, all you need to do is file a Statement of Qualification. In either case, you appoint a Registered Agent and pay a fee to the Iowa Secretary of State’s office.
What is the difference between a “C” corporation and an “S” corporation?
A “C” corporation is taxed twice at the federal level —— once as corporate income and once as personal income when it is distributed to shareholders. The income of an “S” corporation is taxed only as personal income. Several restrictions on qualifying as an S corporation apply, including limitations on the number of shareholders, scope of operations, and the identity of the shareholders. Always seek the advice of a tax professional in addition to your legal counsel.
Can a shareholder or member of a limited liability entity be held personally liable for corporate debts?
Corporations and limited liability entities are designed to shield shareholders from all liability beyond the amount of their investments. In response to certain kinds of misconduct, however, a court will “pierce the corporate veil” and reach into owners’ personal assets to satisfy company debts. Examples of such misconduct include co-mingling corporate and personal funds, fraud, or personal negligence.
One of Your Most Important Decisions
Because of the ubiquity of legal issues, some of which only a lawyer can see, your lawyer is one of the most crucial members of your business team. Choosing the right one is critical. I am comfortable being compared to other lawyers, due to my reputation among my peers in the legal profession:
- I am rated “Distinguished” by Martindale-Hubbell, the world’s top international directory of attorneys.
- I am rated 10/10 (“Superb”) by the prominent Avvo legal rating service.
- In 2017, I was named a Super Lawyers “Rising Star”, along with only 2.5 percent of my peers.
Time Matters – Act Today
It is best to get an attorney involved in your project or dispute as quickly as you can because a myriad of legal pitfalls could await you, and you might have a hard time escaping once you fall into them. I can help you head off trouble before it arrives, and solve problems when they are unavoidable.
If your business is located in the Cedar Rapids area (or anywhere in Eastern Iowa), or if your business issue arose here, feel free to contact me online or call my office at (319) 774-6078 for an initial consultation.