Readers want to know: Alan S. Schwartz, chairman and CEO of the Detroit-based law firm Honigman Miller Schwartz and Cohn LLP, answers your questions *.

Jumana Judeh, president of Judeh & Associates Inc. in Dearborn, asks: "What is the best way to handle an employee complaint in order to help protect against future legal action?"

A: The relationship between employer and employee is governed by numerous state and federal statutes as well as a vast body of common law. While an employer's response to an internal complaint by an employee necessarily depends on the nature of the complaint, some general principles apply. Every employer should have a written complaint procedure, which should be distributed to employees at the time of hire and periodically thereafter. Training should be conducted periodically in order to ensure that employees know how to make, and respond to, a complaint. All complaints should be investigated promptly and confidentially by appropriate personnel. Complaints should be resolved quickly and fairly in compliance with applicable law. An employer must avoid taking retaliatory action against any employee who files a complaint in good faith. If an investigation reveals that an employee has violated company policy or otherwise behaved inappropriately, the employer should take disciplinary action proportionate to the offense, up to and including termination. At the conclusion of the investigation, the company should appropriately inform the complaining employee of its conclusions and actions taken.

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Margaret Blohm, president of Margaux & Associates LLC in Dearborn, asks: "What are the differences in legal protection of a sole proprietor and LLC?"

A: The primary difference in legal protection of a sole proprietorship and an LLC is that the sole proprietor is generally exposed to unlimited personal liability for all of the business's debts and obligations. That is because a sole proprietor is generally legally inseparable from the individual who owns and operates the business. Conversely, an LLC is a separate legal entity that should, if properly formed and operated, provide limited liability protection for its members. Like shareholders of a corporation, members of a limited liability company are generally not liable for the acts, debts or obligations of the LLC. The members' liability for the LLC's acts, debts and obligations is generally limited to the capital they have contributed, or have agreed to contribute, to the LLC. LLCs are managed by the members or by managers, which sole proprietorships are generally managed by the proprietor. Often LLCs are governed by an operating agreement setting forth the rights, preferences and privileges of the members and the duties and obligations of the managers. Because LLCs are separate entities, it is easier to provide for continuity of the business conducted in an LLC after the founder dies.

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David Setsuda, president and CEO of AM Press LLC in Royal Oak, asks: "What is the difference between a trademark, copyright and patent?"

A: A trademark is a commercial symbol--a word, name or design--used to distinguish one's goods or services from the goods or services of another. Trademarks identify the source of goods and are used by consumers to make buying decisions. Over time, trademarks evoke associations in consumers' minds about the style, quality and price of the goods. A trademark infringer is someone who uses a trademark that so resembles someone else's trademark that it deceives or confuses consumers as to the source of the goods. "Copyright" refers to the bundle of exclusive rights recognized under federal law in "original works of authorship," e.g., a book, song, movie, newspaper, other pictorial, graphic and sculptural works, or architectural works. Copyrights cover an expression of ideas or thoughts in some concrete form, not the underlying idea or thought. It is unlawful, without the consent of the author, to copy, perform or display a copyrighted work, or to incorporate a copyrighted work into a new work. "Patent" refers to the grant of a property right to an inventor by the U.S. Patent and Trademark Office, namely "... the right to exclude others from making, using, offering for sale or selling ..." an invention in the U.S. The U.S. Patent and Trademark Office will only grant a patent if the invention covers a new, useful and non-obvious process, machine, article of manufacture or composition of matter.

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Sharon Weatherspoon, president of I * Logic Inc. in Troy, asks: "What are the vital components of any business contract?"

A: A good business contract should help create and memorialize a meeting of the minds of the parties. It should do so in a way that provides a guide to the parties' conduct and an enforceable legal remedy for failure to perform their duties. The contract should help the parties consider the important steps and contingencies involved in their transaction so that they reach agreement on its important terms. It should then clearly express the agreements reached on these issues to help guide their conduct in accordance with their original expectations. Several vital components are common to most contracts. The agreement should identify the exact parties bound, and they should sign the agreement. It often describes the basis for, or background of, their coming to an agreement, and should also describe the steps the parties must take to get what they expect from their agreement, including description of the consideration involved and the actions required of each party. The agreement should also clearly describe the allocation of risks among the parties, which may include representations and warranties of the parties, provisions for indemnification from loss, remedies for breach and limitations of liability. The agreement should also provide for the term of the agreement, how it can be terminated and what happens after termination.

* These answers necessarily are limited to a general summary of the issues involved and do not constitute legal advice.