Since launching my business almost seven years ago, two major things I’ve learned are to get everything in writing and to make sure contracts get signed before money is exchanged. During this time I have had several regrets come from no contracts and from me losing thousands of dollars when hiring someone or when someone was hiring me. However, now, I don’t work with clients until a contract or retainer agreement is signed and payment is paid in full.
Hello everyone! My name is Brandi Howard. I have had the pleasure of guest blogging before on Imperfect Concepts. I’ve answered some of your questions in the past on Trademarks, finances, legal mistakes, and have even posted about the importance of limiting your liability. And as I’m sure you’ve already heard from Tasha, this month I’ll be launching a legal education website for small business women called, “Brandi Howard Law Education for Entrepreneurs” (BHL).
One of the most overlooked aspects of owning a company is the legal aspect, in my opinion. Most people know they need to register their legality that’s about it. They don’t think further than maybe getting their “Doing Business As” form with their city. Which is a huge mistake. You never know when all your hard work is going to pay off and you business becomes known worldwide. Then it’s too late, your business unprotected.
Today we are talking about the importance of copyright protection—particularly for those of you who have digital products or products that can be “knocked off.” Copyright is a type of intellectual property protection. That phrasing is especially important for those of you with digital products, i.e. prints, illustrations, or e-books, which are particularly easy to steal. No one likes to work and create a product only to see it stolen and others benefitting from it.
One more time – we are going to talk about the Limited Liability Company or LLC. I have been getting a lot of questions lately that all basically boil down to the question: “is it necessary for me to set up and LLC or sole proprietorship?” The answer to such s general questions is — it depends. Really the only time that it depends is when you are thinking about setting up a corporation, limited liability partnership, or professional corporation/partnership/etc. If your default is to be a sole proprietor or a traditional partnership, then the answer is always YES, you must set up your LLC.
You have gone through the emotions and even made pro’s and con’s lists about your dream business. Now you are ready to launch your business but you are lost on how to actually do that. In Kick Start Your e-commerce Consultation I walk clients through a 5 week course on how to launch their business, including: site design, branding, payment gateways and much more.
Business is difficult, and legal compliance doesn’t make it any easier. However, contracts are something you have to get use to as a business owner. There are many things that you can walk yourself through, particularly on the compliance side, as there are state agencies that make proactive efforts to help you meet regulatory obligations. However, contracts are an area where you are set out in the woods on your own.
Last month we discussed the basics of what you as a business owner should be looking for in a contract with your designer. This month we are going to take a deeper look at a few parts of the contract that can be unique to the design field.
This segment of your relationship with your graphic designer is brought to you by the school of hard knocks and painful lessons learned. When I started my venture into designing for business owners I was naive and excited. Believing that people would honor their word if I honored mine, I did not have contracts, down payments, kill fees etc. Everything was working well with the first several clients but then I learned why you have to have a contract. One month in particular, I had three wonderful clients lined up that I had completed several hours of work for.
I have insinuated this point in previous articles and I think by now, I am at least partially preaching to the choir. However, for the sake of being thorough — we should briefly talk about why you should separate business and personal finance. I’m going to give you both a legal take and a personal take on this issue. I will also suggest a couple of best practices to help maintain separation.
I am the type of person who just wants to do it. An idea comes to me and I want to get it done. I don’t want to sit around, discuss and think about it all day, I want to execute it. Most entrepreneurs share this sense of urgency—the need to execute. It is a huge part of what makes your business successful. However, what the best entrepreneurs are interested in is when you get it done, that you’re getting it done right. Getting it done right starts you off with a solid legal foundation that will save you a great deal of headache and unnecessary expense.
1. What is the difference between a sole proprietor and LLC?
A sole proprietor in the eyes of the law makes a person a business. Any name you give the business is considered as you doing business as that name. In the distant past the benefit of sole proprietorship over other forms is that business profit is taxed as your personal income; whereas, with a corporation, it is taxed as the corporation’s income and then pays out to you as the owner, who is then taxed again. Sole proprietorships also do not require any paperwork. You just start doing business, though you do need to file for an assumed name certificate if you are using another name than your own and will have to deal with appropriate sales tax issues, etc. The major downside to a sole proprietorship is unlimited personal liability. If your business has a contract dispute or a tort claim against it, you are liable and your personal assets are reachable. When you have co-owners or business partners in a sole proprietorship, it becomes a partnership instead, which is an identical form, but more complicated and sometimes more regulated due to the additional owners.