The “legal side” of your business does not have to be a daunting, illusive thing on your to-do list, that doesn’t get done for months, simply because you don’t quite know where to start, assume it will be extremely expensive, and frankly don’t have the time to learn about all the stuff you need to know!
This is why I’m here!
Here is your quick (ok I realize it’s a bit long, but I tried to keep it as brief and easy as possible while still giving you all the info you need!) guide to what you need to know, and when to get more in depth with your legal knowledge.
FIRST: Once you decide to start a business, you’ll likely come up with a business name. The first thing you’ll need to do is check (1) The United States Patent and Trademark Office (USPTO) website’s Trademark Electronic Search System (“TESS”) AND (2) your Secretary of State’s business website to make sure no one else is already using that name. We tend to worry a lot about other people stealing or using our business name, but forget about the possibility that we may be using someone else’s name without realizing! I know I just threw a lot of words at you, but it’s not as complicated as it sounds. To check these websites, go HERE and select “basic word search” to search your business name. To search the secretary of state, just run a quick internet search for “[YOUR STATE] Business Search” and it should be the first link to pop up.
SECOND: Once you’ve confirmed no one else is currently using your business name idea, you need to decide what that business is going to be in terms of structure. This means you’ll be choosing a business entity. The most important thing to consider here is what you want your business to look like, and what (if any) protections or characteristics you want your entity to have. There are two main business entities entrepreneurs within the United States use: the Sole Proprietorship, or the Limited Liability Company (LLC).
A Sole Proprietorship is the easiest, quickest, and cheapest option that will allow you to check it off the list quickly and fairly easily. However, this option offers you no legal separation between your personal assets and your business assets, which means you may be personally liable for the debts (and any judgements) against your business. This means your personal bank account, house, cars, etc. would likely not be off limits to satisfy a judgment against your business. In order to set up a Sole Proprietorship, you simply need to start doing business, in order to become a sole proprietor. If your business name is anything other than your legal name, you’ll also need to file a fictitious business name, or “DBA” with your county clerk’s office. This is also pretty easily searchable via an internet search for “registering DBA in [YOUR COUNTY]” ßNotice this is county not country – don’t go alerting the United States military just yet.
The second option is an LLC, which requires a bit more time and paperwork upfront, as well as additional startup costs to complete; however, you are afforded legal separation between yourself and your business – your business becomes a separate legal entity, apart from your personal assets. This means any judgment against your business or debt incurred by your business would likely not impact your personal assets. Setup varies somewhat by state, so you’ll need to again do an Internet search to confirm the “how to” in your state to complete setup. Typically, startup includes registering your name and filing Articles of Organization, as well as paying the registration fee, and any other annual fees. You’ll also want to make sure you are aware of any annual maintenance, upkeep, and fees that may be owed to the state in order to keep your LLC in good standing.
To keep it short and sweet – your Disclaimer is the document where you advise those coming to your website that the information you post is just general information/education, and is not meant as advice that should take the place of a personal consultation with their doctor, lawyer, accountant, therapist, etc. which will help remove liability should someone come to your website and misunderstand or misapply information they find on your site.
Your Terms and Conditions are a longer document that lay out the ground rules for your website – this is where you let people know everything posted on your site is your original content that they may not steal or use without permission, you include additional limitations of liability, your refund policies if applicable, and applicable law/dispute resolution, should someone attempt to file a claim against you based on your website. This is crucial, as you don’t want someone in another country to be able to file a claim against you in their home state/country, requiring you to go there and defend yourself.
[Website templates specifically for online entrepreneurs available HERE.]
FOURTH: Your Agreements. Once you start working with clients and taking people’s money, you NEED a written, signed agreement in place (even if it’s your friend, even if it’s one of your first clients). This agreement will outline everything your program includes, payment and refund info, limitations of liability, dispute resolution information, additional protections for your content, and more. It will become a crucial document should a disagreement arise between you and your client, and if not, you’ll have it just in case. Ideally, you and your client sign this agreement, are extremely clear on what services you’re providing, and you never look at the document again.
FIFTH: Protecting your Work – Copyrights and Trademarks. This may not come into play until a bit later, but I see so many questions on this subject, it’s worth mentioning. [See my guest post from Marketing Solved on the difference between copyright and trademark HERE.]
SIXTH: Releases and Waivers. Once you start obtaining testimonials, holding retreats or live events, etc. you’ll want to make sure you have a Release and/or Waiver in place for each testimonial or event, signed by each participant before they arrive or submit the testimonial. This is extremely important to ensure your liability is limited, and your clients understand they are participating voluntarily, and giving your rights to use their image and words (if you plan on taking photos, etc.).
If you’re ready to get the legal side of your business squared away, and stop tip toeing around the Internet hoping you’ll stay under the radar until you figure it out (we’ve all been there!) check out my online entrepreneur-specific templates and done-for-you STEP BY STEP instructions HERE!