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Legal Beyond Your Paid Offers
It's not ALL about your paid offers... there are some tasks every business owner needs to take. Click on the tabs below to learn about those universal legal issues.
Plainly Legal™ Helps You Get Set Up Legally
Starting an online business is an exciting venture filled with endless possibilities. But, it's crucial to ensure that your business is set up the right way from the beginning to protect yourself legally and financially. Two key steps in this process involve setting up your business entity and getting your finances in order. This guide will help you understand why forming an LLC and organizing your finances properly are vital steps toward building a solid legal foundation for your online business.
Create An LLC For Your Business
You aren't legally required to create a separate entity to run a business; you can just get started and the law will treat you as what is called a "sole proprietorship." While this is fine when you are just getting started, it is not a good long-term strategy. Long term, we recommend creating an LLC (Limited Liability Company) because it provides you legal protection and some tax advantages without being overly complicated.
Why An LLC Is Better Than A Sole Proprietorship
One of the main benefits of an LLC is that it provides limited liability protection, which separates your personal assets from business debts and obligations. If your business is sued or incurs debt, your personal assets like your home and savings accounts are protected. In contrast, a sole proprietorship leaves you personally liable for any business debts or lawsuits.
But here's an important note to remember... you are always personally liable for your own actions. Creating an LLC won't protect you from being sued personally if you do something wrong; it will protect your personal assets as your business grows because you can't be sued personally for mistakes your contractors or employees make.
Creating an LLC also doesn't complicate your taxes or record keeping. LLCs don't require a lot of paperwork, and you report the profits from your business on your personal tax return. The only major downside of an LLC is that you will have to pay some fees to your state to set it up.
As your business grows, having an LLC also gives you some additional tax options. You can opt to be taxed as an S-Corp. This adds some additional burdens on you (e.g., you are required to pay yourself through payroll and have to file a tax return for the business), but it also comes with some tax advantages. This is a more advanced topic that you'll want to discuss with a tax professional as your business grow.
Putting it all together, it is 100% fine to start your business as a sole proprietorship. But, as your business grows, you should most definitely form an LLC.
Why An LLC Is Better Than A C-Corp.
The big businesses you know and love are almost certainly what are called C-Corporations. This structure involves shareholders (who own the business), a board of directors appointed by the shareholders (to make major strategic decisions), and executives (who operate the business day-to-day). While you certainly can opt for a C-Corp. for your small business, it is rarely a wise decision.
As compared to LLCs, C-Corps. have significant record keeping obligations. These involve keeping records of shareholder meetings, board of director meetings, and other corporate niceties. This is rarely worth your time!
Beyond the record keeping requirements, opting for a C-Corp. will almost certainly mean you'll pay more in taxes. Unlike LLCs, C-Corps. are required to pay corporate taxes on their profits. Then the C-Corp. can distribute what is left over to shareholders as dividends, and the shareholders have to pay individual income tax on those dividends.
While C-Corps. can have their place, it doesn't make sense for most knowledge brands. If you think those benefits might apply to you, spend the time and money to talk with an accountant and a lawyer.
Set Up Your Finances
Properly managing your business finances is just as important as choosing the right business structure. Here’s how to lay a strong financial foundation for your business:
Get An Employer ID Number
Get an Employee ID number from the IRS to track your finances. You'll use this to open bank accounts and to report profits to the IRS in the future.
Create Business Bank Accounts
You should have a separate bank account for your business. If you use this account for all business transactions, it will simplify your life come tax time
Set Up An Accounting System
You should set up a system to manage your business finances. While you can do this manually, we recommend using a system like Xero or Quickbooks.
When you sign up for Plainly Legal™, you'll get access to our Legal Task Manager absolutely free to help you manage all the different legal tasks. And we include links to relevant government website and recommended tools to help you get your business set up the right way.
Plainly Legal™ Helps You Protect Your Brand
As a business that sells knowledge and expertise, your brand is pretty stinking important. While you are selling a product, your brand is how people remember your business. And people will make judgments about products based on how much they trust your brand. While there are a lot of things that go into branding, your brand names are the foundation of your business identity. It's how you bottle up the reputation and goodwill you've worked so hard to build. You need to protect your brand.
When it comes to protecting your brand, we aren't just talking about your primary brand. Your brand names includes anything you are known for. That includes your overall brand name, product names, and names for things like your podcast or video show. Once you compile a list of the different brand names you use, there are two steps to consider:
Step One: Run A Trademark Search
When it comes to brand names, the most important step is to make sure you aren't going to get into legal hot water by using someone else's protected brand name. If someone else is already using the brand name, you probably can't legally use it.
To run a trademark search, you need to search Google (or your favorite search engine) and the US Patent and Trademark Office's database. Search for the exact name you want to use and any similar names (e.g., different parts of speech). If someone else is already using the name, your best bet is to find another brand name to use.
Step Two: Register Trademark For Crucial Names
Assuming you've run a trademark search and it comes up clear, the next step is to decide whether to file to register a trademark in the name. Registering a trademark has benefits, including nationwide protection. But it is not free and will likely take 18 months to complete.
Generally speaking, it is worthwhile registering a trademark for your overall brand name and for any other brand names that are important to your business and that you expect to continue using for the long term. We use and recommend Markavo.com to handle trademark registrations.
When you sign up for Plainly Legal™, our Legal Task manager will help you identify all the brands names you need to vet. And we have negotiated a special deal with Markavo.com to get you a $50 discount on trademark filings (even for our free users!). Click the button to get started with Plainly Legal™, and we'll simplify the process of protecting your brand.
Plainly Legal™ Helps You Get Your Website Legal
As an online business owner, your website is a critical part of your business. Making sure your website is legally compliant and protected is an important part of dealing with the legal stuff. This involves getting some written policies in place, getting consent for tracking, and making your website accessible under the Americans with Disabilities Act. Plainly Legal™ can help you every step of the way... from identifying the issues to creating the legal policies you need on your site.
Create A Privacy Policy
Multiple laws require you to inform website visitors about the personal information you collect about them and what you do with that information. You do this by creating and posting a privacy policy on your website.
The Legal Document Generator inside of Plainly Legal™ allows you to create your privacy policy in a matter of minutes.
Create Website Terms of Use
Considering how important your website is to your business, you need a legal policy that sets out the basic rules of the road for your site. That's where your terms of use come into play. Your website terms serve as the basic agreement between you an website visitors.
With the Plainly Legal™ Document Generator, you can create your website terms of use by following the simple prompts.
Deal With Website Cookies
If you have any tracking pixels (or just about any other code) on your website, you are using cookies. A few laws require you to disclose and get consent from users to use cookies. You've probably noticed those "Cookie Consent" banners on websites these days. You need to get that set up for your site.
Here at Plainly Legal™ we use (and recommend) CookieYes as a simple cookie solution. You can use it to place a consent banner and perform the other necessary tasks.
Make Your Website Accessible
Under the Americans With Disabilities Act (the "ADA") you are required to make your website accessible to people with disabilities. This is a complicated topic that requires a bit of technical know-how.
We recommend using UserWay.org as a resource to understand and implement website accessibility on your website. They have resources and a free plug-in you can use.
When you sign up for Plainly Legal™, our Legal Task manager will help you identify all the legal issues with your website, and our Legal Document Generator will help you generate the legal policies you need to have in place. Click the button below to start with a free legal audit.
Plainly Legal™ Helps You Market Legally
Figuring out all the legal issues you face in marketing your business can make your head spin. There is A LOT to figure out from intellectual property law issues, the right to publicity, and rules about deceptive trade practices and truth in advertising. Don't despair, we are here to help. Here's a quick overview of the issues you need to be thinking about. To go deeper (and get a custom) plan, sign up for our free plan to get your custom legal to-do list.
Don't Misuse Copyrighted Material
Copyright law protects all creative content that is created by a human being. And "creative" is a low bar here. A good rule of thumb is to assume that everything that you find on the internet or a book is protected by copyright law. That includes written content, designed material, memes, gifs, videos, music, and anything in between.
While there are some narrow exceptions, the general rule is that you can't use anyone else's copyrighted material without their express, written permission. So, if you want to use someone else's content... get permission. And for the love of all that is holy, get licensed stock images, music, and videos. Our Legal Manager will help you identify all the risks here.
Guest Releases
You may have heard of a concept called "name, image, and likeness rights." It is a concept that comes from an area of law known broadly as the right to publicity. In a nutshell, you can't use anyone else's name, image, or likeness for commercial purposes without their permission. And some states require that permission to be in writing.
For online businesses, this means you generally need a written or electronic permissions from anyone who appears as a guest on your platform. Think podcast guests, guest experts, and the like. You can easily create those releases with our Legal Document Generator.
Claims & Testimonials
Under federal and state laws, you are prohibited from making deceptive claims in your marketing. While there are a lot of issues here, the key rule is that if you make claims about the results of using your product, you are legally required to tell people what the typical results are. And you need data to back that up. If you don't have that data, you can't make results-based claims. So be careful with the "promises" you make in copy.
This rule applies to your testimonials too! If a testimonial includes information about the results that customer got, that is considered a claim about your products. You can't just say "results not typical," you also have tell people what the typical results are.
Testimonial Releases
Remember way back when we talked about the right to publicity? Okay, maybe that's not "way back" since it's only two sections up... But that rule applies to your testimonials too. Assuming your testimonials comply with the "no unsupported claims" rule, you also need to get a written release to avoid issues with name, image, and likeness rights.
Look, chances are that people giving you testimonials aren't going to complain (so the risks here aren't huge)... but they will also be more than willing to give you written permissions. So add "get a release" as your testimonial workflow. You can easily create a testimonial release with our Legal Document Generator.
Marketing legally is a big topic that creates lots of tasks. Luckily, Plainly Legal™ can help you identify and deal with these tasks. When you sign up for Plainly Legal™, our Legal Task manager will help you identify the legal issues with your marketing, and our Legal Document Generator will help you generate the legal releases and agreements you need in place to avoid issues. Click the button below to start with a free legal audit.
Plainly Legal™ Helps You Hire Legally
As your business grows, you are going to need help from other people. That means building a team. Luckily, as a small business, you won't have to deal with a lot of the complicated employment laws out there. But that doesn't mean there aren't legal considerations when it comes to building your team. There some specific issues you need to consider, whether you're hiring a virtual assistant, contractor,
Employee vs. Contractor
The first issue you need to consider when you are hiring a team member is whether they are an employee or a contractor. One of the most common mistakes we see in the online business world is people assuming that they get to choose whether someone is an employee or a contractor. That's not the way it works; the law dictates this decision.
In broad strokes, if you exert considerable control over how the person does their work, they qualify as an employee and you are required to deal with all the tax issues involved. You can't simply "agree" that they are a contractor. Inside Plainly Legal™, we direct you to a resource to help you make this all-important decision.
Contractor Agreements
When you hire a contractor, one of the most important steps is to create an agreement that governs that relationship. Many people who work as contractors will have their own services agreement for you to sign, but if they don't have an agreement, you need to create one.
That agreement needs to set out the work they'll do for you, how much you'll pay them, who owns the work product (hopefully you!!!), and requires them to protect your confidential information. The Legal Document Generator inside of Plainly Legal™ makes it simple to create these agreements with all the legal niceties to protect yourself.
Employees
Hiring employees adds some tasks to your list, from setting up payroll to getting the right agreements in place. Specifically, you need to create agreements that set expectations about their work, that transfer ownership of everything they create to your business, and require them to guard your secret sauce.
Inside of Plainly Legal™, we guide you through the process, including telling you our preferred payroll provider for small businesses and helping you create the written agreements you need.
As your business grows, so will your team. And that can add headaches. Luckily, with Plainly Legal™, those headaches don't have to include legal headaches. Our system makes it easy to quickly identify and address the legal issues you face when you build your team. And as an added bonus, as your team grows... you could even delegate the task of dealing with the legal stuff to someone else! Click the button below to get started with Plainly Legal™ absolutely free. Once you complete your legal audit, you can decide whether you need to subscribe to a plan that includes creating agreements.