Balance. We all want it. We all talk about it, even if we don’t take action to create and protect it in our lives. Whatever we do in our lives, we know we need balance.
Have you ever noticed that when the word “balance” is defined, it is usually done in reference to the stabilizing support on which everything you are trying to balance rests and relies? For example, think of a seesaw. Without a support, a seesaw would just be a plank of wood on the ground. What fun would that be?
TAKING CARE OF YOUR LEGAL FOUNDATION is probably the most exciting thing you can do for your business.
In the world of business, the bedrock of a proper support is the legal foundation of your company. The quality of your support directly affects how happy and successful you can be as a business owner.
OK; I know what you are saying. LLCs, corporations, contracts, trademarks… it is probably much more fun to watch paint dry. I know that getting your legal foundation in place isn’t the most sexy or exciting topic….
Or is it?
Actually, taking care of your legal foundation is probably the most exciting thing you can do for your business.
Why? Because the businesswoman who takes the time to solidify the legal foundation of her business is actually doing something even more profound. She is stepping into and embracing her power. She is honoring herself and her hard work. She is ensuring her future success. She is making a bold statement to the world that she is to be taken seriously.
Wow. at is pretty darn sexy, if you think about it. Brilliant too.
NO ONE CAN OPERATE A BUSINESS in a totally risk free zone. However, risk can be minimized. If you take steps to get your legal affairs in order, it will maximize your chances for the kind of success you desire while minimizing the risks you face for trouble, especially trouble that can undo all of your hard work or even put you out of business. Taking steps to get your legal foundation in order is being business brilliant.
So let’s assume you want to be a brilliant businesswoman who is empowered, successful and taken seriously. How in the world can you get your legal foundation in place starting today?
Glad you asked.
What follows is the first half of a powerful outline for everything you need to do to get the right foundation in place. Take these steps, and you will have a solid start to getting your business legal foundation set.
• Set up a brilliant business structure.
THE BEDROCK OF A PROPER LEGAL FOUNDATION is the entity choice for your business. And very simply, an entity is just a separate and independent thing. at is all it is. But the separateness and independence critical.
You want your business to be separate and independent because if it truly is, then your personal assets such as your house, your car, whatever you cherish, are safe from business liabilities.
THERE ARE SEVERAL FORMS OF BUSINESS ENTITIES TO CHOOSE FROM, but most likely, the only ones you should consider are limited liability companies (also called LLCs), S corporations or C corporations.
If you have never set up any kind of entity, by default, you are a sole proprietorship. e problem with sole proprietorships is that you have absolutely no protection from liabilities that arise from your business activities. at means that if someone sues you to collect on a bill incurred by your business, they can potentially get access to your personal property to satisfy that debt. If you are in a community property state, they will also have access to your community/ marital property if you are married.
The same is true if you have a business partner. If you have one, and you haven’t set up a legal entity with your state, then you are by default a partnership. Just like with a sole proprietorship, if you are a partnership, you have total exposure to business liabilities. And this is totally unnecessary for most of you and very easy to fix.
If you don’t do anything else after reading this article, make a commitment this week to get a proper legal entity in place for your business.
• Get a separate bank account for your business and do not commingle business and personal funds.
The reason for this is that when you are in a dispute and there is a fi ght to reach your personal assets to satisfy business debts or liabilities, the court will look to see if there is truly a separate entity for your business or whether you routinely and as a matter of course blur the line between your personal and business life. If you commingle funds in one account, or use your business card for personal purchases, a court might determine that there is no real distinction between you and the business, and then you could lose the limited liability that was the point behind the separate entity.
• Protect your copyrighted materials.
YOUR WRITTEN OR RECORDED CONTENT (website pages, sales letters, articles and blog posts, etc.) is protected by federal copyright laws. The great news is that you have a copyright in your original works as soon as you create them. You do not have to do anything to have protection. The bad news is that if you don’t at least use the symbol, you make it harder to build a case against someone who uses your creation without authorization. Using the symbol also gives you access to legal remedies if you have to sue for infringement. The reason for this is that unless others have notice of your copyright, they won’t be held to the same standard as someone who does.
Also, for even greater protection, you should register your copyright. You do that by filling out a short registration form and sending it to the U.S. Copyright Office in Washington, D.C. Make sure you include 1-2 copies of the work and the required fee. For more info, go to www.copyright.gov. It is extremely easy to get a registered copyright, and once you get it, you will have access to the most robust legal remedies under the law, including the maximum amount of money damages available.
One thing to keep in mind: If you hire a third party to author or help create work-product for your business (like hiring a professional copywriter or a virtual assistant who helps create your content for your website, e-zine, newsletter, book, etc.), the basic rule is that the independent contractor owns the rights to that work unless you had her sign a piece of paper transferring those rights to you or your business. What that means is that she would be free to use that content in any way she wants, including giving it to a competitor or distributing it herself as her own work-product. So, you must get your vendors and independent contractors to sign a written agreement transferring the copyright in anything they work on for you to you exclusively.
• Get your business name and logo trademarked.
Unlike copyrights, a trademark is not automatic. State and federal laws both provide protection of the right to exclusively use a brand name, a logo, packaging (called trade dress) or anything else that identifies your brand (Tiffany’s even trademarked its color blue!). When you have a logo designed, or you come up with a tagline (for example: “Just Do IT”) or you spend the money on packaging for your product that is unique, I strongly encourage you to get those items registered as trademarks.
Th ere is a two-step process to have full trademark protection. First, begin using the trademark symbol ™ over anything you want protected. That puts the world on notice that you are claiming a trademark in it.
Next, document the date on which you began using the trademark. e start and the continuous use of the mark is one of the biggest factors courts look at if there is a dispute about who owns a mark. So documenting the date is critical.
Finally, file for registration with the United States Patent and Trademark Office (http://www.uspto.gov/). is isn’t necessarily a simple thing to do, so I suggest hiring a good trademark attorney with experience preparing and fi ling applications, and dealing with challenges by the USPTO after an application is filed. Th e date on which you file for registration is also key, so don’t delay in filing. Once you get a registered trademark, you can begin using the symbol.
So, there you have it! These are the first four of eight simple but critical steps to beginning the process of getting your legal foundation in place. In the next issue of Star Lee Magazine, we will cover four more very important steps.
If you make a commitment to get each of these items checked off your list, you will have created a foundation that will make balance possible, and you will absolutely be able to consider yourself a brilliant business woman.
BY JESSICA EAVES MATHEWS
Tags: business entities, C corporation, content, copyright, copyright laws, JESSICA EAVES MATHEWS, legal foundation, LLC, S corporation, Star Lee Magazine, trademark, trademark protection, United States Patent and Trademark Office, USPTO
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