The Legal Stuff You Need to Know
This month we’re focusing on how to start a business.
Whether you have an idea that you want to turn into a business. Or you have a business that you want to turn into a moneymaker.
Here’s what you need to consider when it comes to legal strategy…
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Why It’s Important
The legal side of business is a bit intimidating. We're breaking down the four things you need to know: formation, trademarks, copyrights, and contracts. We start with how to choose the right entity and set up a business bank account. Then we're talking about how to protect your brand from competition and protect your work from copycats. And we're breaking down the contracts you need to protect your profits.
A legal entity like an LLC or Corporation is important because it gives you limited liability. That means you won’t be personally liable for the expenses of your business.
Here’s a quick way to tell which entity is right for you.
Whatever one you form, make sure you use a separate business bank account.
A trademark means you're the only company who can use your company name, logo, slogan, domain name, personal name, product name, or hashtags.
It's so important to your business because...
A trademark prevents your brand from being stolen
A trademark is the exclusive right to use a brand nationally.
Only one person can own a company name, logo, tagline, or hashtag. And it's based on who files the trademark application first.
If you own the trademark for your brand, then you're the only one who can use it.
But, if someone else registers the trademark for your brand, then they're the only ones who can use it nationally.
That's a big problem!
It doesn't matter that you were using the brand first. If you want to sell nationally, you'll need to rebrand.
Think about how many brand pieces feature your company name: your website, social media, business cards, products, marketing materials, press links, inventory, etc. You'll need to change all of that, pull back all inventory, and possibly pay monetary damages. You'll lose customers, money, and valuable momentum.
Unfortunately, we see this happen a lot. Someone sees a great brand on instagram or in a store and decides to trademark it first.
So, if you have a great brand, you need to file your trademark application now.
Before someone else does!
A copyright is the ownership of your work...aka your artwork, designs, photos, website, book, music, video, or source code.
If you own your copyright, then you are the only one who can use your work. That means you can stop copycats from stealing it. But, if you don't own your copyright, there's not much you can do to stop copycats from taking your work + claiming it as their own.
So you need to copyright your work asap.
Contracts are an important way to protect your business and your profits. The key contracts you may need are:
These policies make sure your website terms are actually binding on customers. Without web policies, you have to accept returns and other default customer service policies.
This contract is important because it’s the only way that you own the work created when you hire a photographer, graphic designer, web developer, etc.
This contract makes sure you get paid on time and clients follow your policies on cancellation and changes.
Cease + Desist
This letter is how you stop copycats from using your registered copyright work.
What legal entity did you form? Do you have your brand and work protected? What contracts do you need?