The legal side of running a business can be confusing. As TpT sellers there are a lot of questions about what we should be doing and shouldn’t be doing that come up in our Mastermind Group. We are addressing those today and if you want to continue the conversation at www.growwithusmastermind.com.
We know the legal side of running your business is a heavy and serious topic. But, we also know it’s so important to help you grow your business that we address these types of topics. So, we brought a guest on our podcast to help answer all our TpT seller legal questions.
Brittany Ratelle is an attorney who helps creative entrepreneurs build more confident businesses. She provides 1:1 custom legal services and digital products/education to help creative entrepreneurs get a handle on the business side of their growing empires. She believes in the power of cute office supplies AND good contracts and hosts a weekly podcast, Law & Wit: Creative Counsel for Entrepreneurs, with business tips and inspiring founder stories. Brittany lives with her husband and four kiddos in her beautiful hometown of Coeur d’Alene, Idaho and loves to rock out in her minivan, knit, sew, ski, and issue empty threats to her sewing machine.
What we love about Brittany is that her whole focus is creative entrepreneurs and because of that she gets the unique situations of TpT sellers and bloggers. So many times it seems like it’s impossible to find professionals in the legal and financial world that really “get”what it is that we do, but she’s definitely one of them.
Are there DIY Legal Templates I can use?
April actually found Brittany because on her website she has an incredible library of DIY legal templates in her store. As an attorney she knows exactly what business owners need. But, she also knows that many that are starting out in the creative entrepreneur world don’t have the budget to run out and pay an attorney to draft up every document, contract, and legal website wording that they need to have.
Her templates are created to help for those that can’t afford that one-on-one service. The templates are made to be do-it-yourself and are super easy to fill out. It doesn’t take a lot of your time and won’t leave you feeling confused. And, they are GDPR compliant, so you don’t need to worry about that hype either.
How do I handle customer testimonials?
Using customer testimonials isn’t as simple as slapping a quote, image, and link of someone up on your website. You want to make sure you have their permission to do so. The last thing you want is someone that loved your products or service to feel caught off guard because they saw themselves on your website unexpectedly.
Right now, April is gathering testimonials herself and using one of Brittany’s templates. This way she’ll know that everyone has signed off and she can move forward. To make it easy, she’s uploading the template in HelloSign so it’s easy to send electronically to the people that need to sign. It makes it super easy and you don’t need to print anything and waste time mailing documents back and forth.
Brittany also uses HelloSign but shared there a plenty of other choices you can use. They either work solely for electronic signatures or have e-signing features as part of their benefits which make it really easy when onboarding new contractors:
Do I really need to make people sign contracts?
There are a lot of people that are leery about asking people they work with to sign contracts. They’d rather just do a handshake deal and take them at their word. And, you might be worried about making people think you don’t trust them by putting a contract in place, but the truth is–a good contract protects both parties.
Contracts should spell out details like whose doing what, how sales will work, what happens if you need to give refunds, who will have the legal right to use the final product along with how it will be used. They are designed to protect you when things are going great and when they aren’t. And, it’s much easier to put them in place and figure things out before you run into a problem.
As TpT sellers, copyright is one of the topics we have a lot of questions about:
How do we keep people from stealing our resources?
Copyright is one of the main ways that we can protect our work whether it’s handouts, online courses, books, and even music. Brittany shared with us that it’s true that the minute you create something it gets some protection under Copyright law. However, you can’t take advantage of the full benefits until you register your work.
How do I Copyright my work?
I love the way that Brittany explained this on the podcast. She shared that to get the full perks you need to go into the electronic copyright portal, which she described as a “ghetto 90’s website”, in order to register. The website is: https://www.copyright.gov/registration/
Brittany recommends that you handle copyrighting your work on your own as opposed to paying someone to do it for you. It’s something you might be doing often depending on if you have a blog and how often you create new products and it’s not worth paying someone else to do the work for you.
If you want some help on exactly how to do this, Brittany has a digital course that is set to come out in April called Rip Off Resilient. It will answer all your questions on how to register your Copyright so make sure to watch her website for that.
How does Copyright help me?
If you have completed the process of Copyrighting your work you can claim statutory damages. So, if someone steals your curriculum, worksheet, photography, or whatever else it is, and they don’t listen to a cease and desist, you can sue them. And, you don’t have to prove that you lost sales or incurred damages in order to do so. All you have to do is prove that you published it first. This saves you a ton of time from having to figure out things like what you would have made from the sale based off past sales of similar products. It simplifies the process. s
Often the threat of a lawsuit is enough to get people to take things seriously if they’ve copied your work. But, if they aren’t afraid of it and you have Copyright then you can take the to court. And, you can collect attorney’s fees from them as well.
How do I Copyright a bundle?
One thing we run into as TpT sellers is that we often create bundles full of individual resources. Brittany shared that we can Copyright a collection if we have published and released each resource within 3 months of each other. So, if you have resources that you sell in pieces or as a whole, you can Copyright it all at once as long as you stick to that rule.
Another hot topic for TpT sellers is trademarks. Brittany shared a wealth of information on this topic as well:
What is a trademark?
Trademarks were actually designed to protect consumers. They are in place to allow consumers to trust that if they see a brand name or logo on something that they can trust they are actually going to get that product.
If you trademark your business name or logo it becomes your responsibility to make sure that no one else is using it. If you don’t monitor your own trademark, you can actually lose it.
Can I use a similar character or work of something that is trademarked?
Ok, we’ve all been here before, wondering if the few changes we’ve made to a character make it ok to use. Brittany shared that according to the trademark law, if there is a likelihood that people could be confused between the two goods or services than you could be infringing on a trademark. It’s kind of a gray area so she encourages people to think about if you were to show both works to the average person if they would be confused about if it’s the same.
It’s also a good idea to trust your gut. If you keep asking yourself if it’s too close, then it probably is.
As a teacher working in the classroom you can get a lot of grace in using images from large companies like Disney and things like that. However, when you start making money from the things that you are creating and taking it outside of the classroom, you can get yourself in some serious trouble.
Large companies, like Disney Co., have the manpower and money to take you to court. They aren’t bluffing when they send you a letter and they have people whose entire job is to look for these types of things. It’s not worth the risk to your business to use Trademarked images on your website or in your resources. Just don’t do it.
How do I trademark my business name?
- Search online to make sure no one else is already using that business name that is also selling related stuff like resources, curriculum, or teaching materials. If you find that someone is already using it then you’re going to want to seriously consider changing your name.
- Head to the Trademark electronic search system and see if you get any results. This search goes on exact matches so you’re going to want to use a few different spellings and alternatives to see if there is anything close.
- Trademark you name. You can hire an attorney to do this step for you. When Brittany works with entrepreneurs on Trademarks she handles all the research as well and digs through all the searches for you. She also helps you determine how to describe what it is you do because this is one of the parts most people struggle with when applying for a trademark.
One of the most common mistakes that Brittany sees people make with Trademarks is getting too specific with what they do. When you do this it makes it hard to protect other things that you might start selling in the future. For example, if you offer curriculum and then later decide to offer online courses, you want to make sure everything will be covered under your Trademark. An attorney will help you work through that and determine the best options and descriptions.
How much does it cost to work with attorney to get a Trademark?
Working with an attorney to get a Trademark is not always cheap, but it can be very important. Brittany charges $1,000 for Trademark work. That might sound like a lot, but when you start investing into bigger projects, it’s totally worth it.
April shared an example with us during the podcast. She’s currently working on a big project that will be it’s own website and include a full curriculum that she plans on selling to school districts. She’s invested over $5,000 into the project already. It’s well worth it for her to make sure her work is protected because she’s investing a lot of time and money into it.
The process for getting a Trademark can be really confusing. Brittany has found that many people that try to walk through the process on their own end up abandoning the process before they complete it. Choosing the right classes to register for can be confusing and really add up when you’re choosing more than one because they are $275 a piece. And, it doesn’t help that they were created years ago, which leaves a lot of gray areas when it comes to the digital world.
When can I sue the TM symbol?
Even if you haven’t filed for a Trademark you can use the TM symbol. This will help discourage people from using your work. However, if you want to make it legal and actually put power behind it then you want to go through the process of having your Trademark registered. This is when you can start using the ® symbol instead of just the ™.
How do I protect my blog?
We’ve spent a lot of time talking about using a blog to build your business lately. And, this is my big focus for the year. Brittany shared some important information with us on how to protect our blogs and the content that we share on it.
What you need to put in your footer
In the footer of your blog you should have the © symbol along with a disclaimer stating the date it’s published or updated. Some people use a date range including the year the blog started through the current year and others just use the current year. Then, you also want the words “All rights reserved” along with your name or business name.
Putting all this in the footer makes it so people can’t use the excuse that they “didn’t know” that they couldn’t use the things they found on your site.
Register everything on your website
You really want to register everything on your website. This can be tricky when you have a blog because you are constantly updating it. The easiest way to do it is package up everything on your website together into one PDF. There are plenty of programs you can find online that will help you do this. Then, register the entire PDF for Copyright.
Some bloggers redo this process once a year while others do it once a quarter or even monthly. Determine what type of schedule you want to use and then make it part of your regular work schedule and add it on your calendar.
You want to include some language that “all rights are reserved” and that you don’t allow use of your content, images, or anything else without written permission.
An important note on sharing the work of others
Remember not all “sharing is caring”. Brittany mentioned that she constantly sees the line being crossed on social media. People will either screen shot or share something that is from someone else without getting their permission. Sometimes they’ll even give credit to them, but just because you give credit doesn’t mean you have the right to use their work. Make sure you get permission from people before using their work.
Most people won’t mind if you use their work if you give them credit and link back to their website, but that’s not always the case. So. always cover your bases and ask for permission.
What type of business should I have?
Limited Liability Company, Sole Proprietorship, S-Corp. It can be confusing to know what the difference is and how your business should be filed, so Brittany shined some light on the options for us.
What is a sole proprietorship?
If you start selling products or making money from a blog and don’t file as a different type of business you are automatically a Sole Proprietor. You still need to make sure that you report any income you make on your taxes and you can still deduct any qualifying expenses that you have.
What are the benefits of an LLC?
The way Brittany describes the benefits of an LLC, or Limited Liability Company, is that it “puts a fence, a beautiful little fence, in between your business and personal assets”. This can be really important because if someone comes after your business it won’t become a personal problem as well.
If you have a sole proprietorship and someone comes after your business they can also come after your personal assets. This includes your house, your savings account, and pretty much any other asset that you have. However, if you are filed as an LLC they can only go as far as your business.
LLCs are filed on the state level of whatever state you reside in. Usually you file for your LLC with the business division of your Secretary of State. For the most part, it will cost you around $100 to file. Then, you will pay a fee between $25-$50 each year to renew. However, if you reside in California they require that you pay a franchise tax annually that is around $800. When weighing the cost of an LLC consider what your peace of mind is worth in knowing that your personal assets are protected.
Why you want to get an EIN
When you go through the LLC process it will prompt you to get an EIN. This is basically the social security number for your business. This is really helpful to have because it will allow you to open a separate bank account in the name of your business and make it so you don’t have to give your social security number out to everyone that you are doing business with. Your EIN takes the place when you are asked for your TIN, or tax identification number.
This helps you to keep your business and personal money separate. If you have an LLC you need to do this. If the IRS sees that you are co-mingling your funds then you can lose your LLC because it looks like you aren’t operating like a real business.
And, from personal experience, I can tell you that it made everything a lot easier when I separated my business and personal funds.
How to obtain an EIN
There are plenty of businesses out there that you can find online that will “help” you obtain an EIN–DON’T USE THE M! They will charge you a fee and it’s not worth it. It’s totally free to file for an EIN and it only takes about five minutes to do it. You file straight through the IRS website, you get your number right away and can print out your SS-4 form when you’re done.
When should you file as an S-Corp?
An S-Corp allows you to operate as an LLC but be taxed as a corporation. If you are making around $40-$50k a year it might be worth making the switch from an LLC to S-Corp. It allows you to avoid paying too much tax on your income.
If you are wondering if this is a good move to you talk to your accountant. If you don’t have an accountant, find one. A good accountant will more than pay for themselves. They can run the numbers for you to tell you how much it will cost you to operate and file taxes as an S-Corp and how much it will save you in taxes. When you have these numbers you will know if it’s the right time or not.
How should I legally prepare to have someone take over my business if something happens to me?
When you have a business, it’s important to have a business succession plan. A lot of people avoid doing this because no one wants to think about death. However, it’s something that is going to happen at one point or another and planning for it will help you have peace of mind that your family will continue to be taken care of if something happens to you.
Make sure you gather together any information that someone would need to step in and run your business, or access the funds. What login information do they need? What passwords? Write out directions on what they would need to do and prioritize what’s the most important. Then put these documents with your estate plan in a safe area.
Brittany used to do estate planning and offered us some really helpful information. But, she also encourages everyone to seek the counsel of a licensed attorney in their own area.
General estate planning information
Brittany shared that there are four things you need to have in place:
1. Basic will that puts all your assets into a trust. This should include guardianship of your children. Even if you don’t have financial assets, if you have children and want a say in where they go if something happens to you, then you need to do this step.
2. Family trust where all your assets go. You can also have your LLC go into the trust.
3. Financial power of attorney which allows someone access to your bank accounts and gives them the ability to sign for you. If you are in a coma or unable to act on your own behalf, this allows someone to act for you. They could get access to what you’ve given them access to
4. Health care directive which is your living will. When you have your wishes record they are more likely to be followed. You also want to have a conversation with the person that will see out your wishes.
Why planning is so important
If something were to happen to you, the last thing you want is to make a difficult situation harder for your family. Having life insurance in place is a great idea so your family can be provided for. They won’t have to jump into figuring out your business while grieving. However, if you want them to eventually have the chance to run your business if they want then you need to have a plan in place.
It’s hard to think about, but it’s so important. Start thinking about a plan and looking at what steps you need to start taking to work towards that plan. These are the things that are worrying you or in the back of your mind right now. If you take care of these things, it will help you have peace of mind about the things that are outside of your control.
Interested in more information?
If you are interested in continuing the conversation jump over to our Mastermind Group and check out the Brittany’s Law & Wit podcast. Brittany has also generously provided our Grow With Us followers a freebie which you can access here.