INTERNATIONAL BUSINESS

Q: What is the advantage to hiring an attorney when I seek to import or export a product into or out of the United States?

A: Selecting a competent attorney to assist in the import or export of your product is a crucial decision. In cross-border transactions and depending on the complexity of the transaction, it is often recommended to select a U.S. business attorney who will then select local counsel in the country where the transaction will occur. Gonzalo Law LLC can navigate you through the international sales transaction process.  You will be able to review and discuss options for a sales contract, letter of credit, bill of lading, and contract of affreightment as well as commercial Terms under the ICC Incoterms and more.

Legal counsel will assist you in understanding how choice of law considerations should be integrated into your international cross-border transaction or agreements. Counsel can provide advisement on to deepen your knowledge of how public international laws, regional supranational laws, domestic laws, and uniform codes and harmonizing measures will affect the import or export of your product into a particular country. You can also determine if it will be necessary to obtain a federal court judgment that will assist you in the import of your product into the United States.

Q: How do I finance my small business exports, foreign investments, and (or) projects?

A: In addition to financial institutions, there are several government and local organizations that provide funding for small businesses.   Although Gonzalo Law LLC strongly recommends carefully calculating the financial investment necessary to export or import your product, sometimes additional financing is necessary. When that is the case, an individual should first research the available opportunities with through grants and government funding. The small business association may also be another resource for obtaining financial assistance. The small business association cites that many small businesses are under the misconception that they are too small to be able to compete in the international market. It is noted, however, that 97% of all exporters are actually small businesses. There are several options that include loans, insurance, and grant programs that assist in a business’ ability to export out of the United States. For more information on financing your export venture contact your local small business association and follow-up with Gonzalo Law LLC when you are ready to get started on the process.

Q: Are there any free resources that I can utilize to learn about the export process before hiring an attorney?

A: Yes. Gonzalo Law LLC encourages its clients to thoroughly educate themselves about the export process for their export. Your initial consultation with the firm will include some complimentary hours of service in regard to learning more about the export process.

In addition, the U.S. government also offers several free resources that you can utilize as you learn more about exporting your product. The U.S. government export page cites the Customs and Border control websites and more especially their pages on legal, trade, and import/export are helpful tools. Also, the export import bank of the U.S. is another resource of information on the export and import process.

Further, the Export Legal Assistance Network (ELAN) is an innovative program, established by the Federal Bar Association with assistance from the U.S. Department of Commerce and the U.S. Small Business Administration’s International Trade Program, lawyers from the Federal Bar Association volunteer to provide an initial legal consultation free of charge to companies just beginning to export. Under ELAN, knowledgeable lawyers help export companies learn the legal aspects of international trade. ELAN has regional coordinators throughout the United States, each with three or more attorneys ready to provide free assistance on the initial stages of the process. The International Trade Administration, Bureau of Industry, and Security also offer resources for individuals seeking more information.

Another useful source for legal information is the American Bar Association (ABA). The ABA publishes numerous books on the subject of international business. Some of these publications include guides to the legal aspects of doing business in specific countries and guides to foreign law firms and law groups abroad if you would like to consider additional options for local counsel in a foreign country. The ABA’s complete catalog is available on the web.

Once you believe you are ready to begin the export process, contact Gonzalo Law LLC for assistance when preparing your international sales documents and much more.

Q: What should I consider when making the decision to begin exporting and how do I begin?

A: There are many ways to become involved in exporting, from filling orders for domestic buyers (such as export trading companies that then export the product) to exporting products yourself. However you choose to export, the development of a detailed and thorough strategy is an important part of the planning process. Steps in developing a strategy include:

  • Evaluating your product’s export potential;
  • Determining if you are really willing to make a commitment to international markets and evaluating whether your company is “export-ready”;
  • Identifying key foreign markets for your products through market research;
  • Evaluating distribution and promotional options and establishing an overseas distribution system;
  • Determining export prices, payment terms, methods, and techniques;
  • Familiarizing yourself with shipping methods, export documentation procedures, export financing, and other requirements for exporting.

The Trade Information Center (TIC) trade specialists can help your company analyze its export potential. The Export Basics section of the website is also available to help you better understand the export process and evaluate your company’s export-readiness.

Q: What are the most important considerations when I am preparing to import my product and how can an attorney assist you?

A: Gonzalo Law LLC believes it is important that clients understand that there are different considerations required when importing a product into the United States.  These concern how a product is classified, whether the proper valuation process was employed, that the rules of origin have been reviewed, and that the product has the proper markings.



PRIVATE AND EMERGING BUSINESS

Q: What type of business should I start?

A:  Before you start your business, you will want to review and consider the best legal structure for your business needs.  Some of the considerations that you will want to make include the tax implications of your selected structure, legal asset protection afforded, the payment structure for employees, government reporting requirements, whether you want centralized ownership or management of the company, shareholders and a board, and what future goals for expansion of your business.

You will want to review your options carefully prior to making a final decision.   Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute.

– Sole Proprietorships

– Domestic Business Entities

  • For-Profit Corporation
  • Nonprofit Corporation
  • Domestic Limited Liability Company (LLC)
  • Partnerships
  • S Corporations
  • Partnership
  • Limited Partnership
  • Limited Liability Partnership
  • Professional Corporation

– Foreign Business Entity

  • For-Profit Corporation
  • Nonprofit Corporation
  • Foreign Limited Liability Company
  • Partnerships
  • S Corporations
  • Partnership
  • Limited Partnership
  • Limited Liability Partnership
  • Professional Corporation

If you would like to conduct further independent research and gather more information on the process, then you can contact the business services section of the Ohio Secretary of State at http://www.sos.state.oh.us/SOS/Businesses/BusinessInformation/starting.aspx.  You can also find additional information, if you look at the Small Business Administration’s Business Types web page.

For legal guidance on selecting the best business form, you can contact Gonzalo Law LLC directly through our Contact Us page.

Q: Why is it important to determine if a person is an employee or an independent contractor?

A:  A business will want to be very clear on whether a person is an independent contractor or an employee because the federal government has very strict requirements for employers as it concerns their employees.  Depending on the number of hours an employer has an employee work, an employer may be required under state and federal laws to provide health benefits to an employee.  There are also certain tax requirements at the state and federal levels.

Determining whether one is an employee or an independent contractor requires reviewing several factions.  One must consider whether the person for whom the services are performed has the right to control how the person performs the services. It is not based merely on how the person is paid, how often the person is paid, or whether the person works part-time or full-time. There are three basic categories of factors that are relevant to determining worker classifications: A) Behavioral control, B) Financial control and 3) relationship of the parties.  After a careful review of the facts of your situation, legal counsel will be able to assist you in determining whether you have employees or independent contractors.

Q: Should I consult an attorney when drafting and reviewing contracts?

A: Yes.  Based on knowledge of local laws, an attorney will be able to draft your agreement so that it is consistent with current the legal requirements as it concerns that area of law subject to your agreement.  Knowing these legal principals will enable legal counsel to ensure that both sides rights are equally protected.

An attorney is not only compensated for including the required information in a contract, but also for research and reading current case law on the subject.  This allows legal counsel to review the precise aspects of contracts the local courts have overturned or invalidated and be sure that no such provisions are included in your agreement.  Also, counsel is able to draft agreements with your current and future business requirements in mind.  This will allow your agreement to be a valuable investment overtime and not only in the present moment.

When reviewing a contract, it is important to fully understand your legal rights and obligations.  Prior to signing any legal agreement which will substantially affect your rights, you should seek the advice of legal counsel.  Legal counsel can assist you in negotiations and explain what will be required under the legal agreement at issue.

Q: What are the Requirements for a Valid Contract?

A: In order for an agreement to be binding in a court of law, a contract must contain the following elements:

  • Mutual Assent: Each party must have a shared understanding regarding what the subject matter of the contract is. For example, for a delivery contract, both parties must understand that the word “ship” does not refer to a sea vessel, but rather means “to deliver”.
  • Offer and Acceptance: One party must make an offer by clearly communicating their intent to be bound in a contract. Likewise, the other party must render their acceptance in unambiguous terms.
  • Consideration: This where both parties mutually exchange something of value in order to make the agreement binding. The consideration may simply be a formality, such as giving $1. Sometimes contracts can be enforced in a one-sided promise where only one party renders consideration.

A contract is agreement between two parties which creates a legal obligation for both parties to perform specific acts. Each party is legally bound to perform the specified duties such as rendering a payment or delivering goods.


NONPROFITS AND CHARITABLE ORGANIZATIONS

Q: What is the difference between nonprofit and tax-exempt status?

A:  Non-profit status is a state law concept.  Nonprofit status may make an organization eligible for certain benefits, such as state sales, property and income tax exemptions.  Although most federal tax-exempt organizations are nonprofit organizations, organizing as a nonprofit organization at the state level does not automatically grant the organization exemption from federal income tax.  To qualify as exempt from federal income tax, an organization must meet requirements set forth in the Internal Revenue Code.

You can contact the internal revenue service further information or click on our Contact Us tab for legal advice.

Q: How can I legally maximize the revenues from my tax-exempt organization while staying consistent with state and federal laws?

A: Legal counsel will work with you to complete a comprehensive analysis of the compensation and organizational structures of your tax-exempt organization.  This analysis is completed in conjunction with a review of the U.S. tax code, federal and local statutes and case law, and best financial practices for tax-exempt organizations.  When this analysis of your tax-exempt organization is complete, a detailed report of whether your organization is both compliant under local and federal law as well as best financial practices will be available.

Non-profits provide public services that are considered valuable and important to society.  As you begin to maximize your revenues, you should note that the government offers tax-exemption as an indirect subsidy, in exchange for valuable public benefits.  If your organization is tax-exempt it will fall under the IRS tax code 501(c). This exempts the organization from paying federal, state and local taxes. Furthermore, donors can deduct their gifts to your organization from their federal and state tax returns. However, tax-exemption excludes employment withholding taxes, Social Security and some state and local taxes. Most Ohio municipalities impose an income tax.  As such, it is vital to ensure that you have maximized your revenues most efficiently while managing and growing your tax-exempt organization.

Click on our Contact Us tab to find out more about the tax-exempt entity status.

Q: Do I need a tax-exempt number for my organization?

A: No.  Unlike some states that issue numbers to organizations to indicate that these organizations are exempt from state sales taxes, the IRS does not issue numbers specifically for exempt organizations.  While the Internal Revenue Service does issue Employer Identification Numbers (EINs), these are merely a unique identifier, similar to a Social Security number for an individual. Applying for and receiving an EIN says nothing about the organization’s tax status; however, your organization needs an EIN to apply for tax exemption.

Q: What employment taxes must tax-exempt organizations pay?

A: As confirmed by the IRS, tax-exempt organizations have important responsibilities as employers while operating and managing their activities. Before an organization becomes an employer and hires employees, it needs a federal Employer Identification Number (EIN). If the organization has employees, it is responsible for several federal, state, and local taxes. As an employer, the organization must withhold certain taxes from employees’ pay checks. Employment taxes include the following:

  • Federal income tax withholding (FITW)
  • Social Security and Medicare taxes (FICA)
  • Federal unemployment taxes (FUTA)