Top Five Legal Tips for New Business Owners
- Set Up an Entity.
Personal liability protection is one reason why it is important to form a business entity. If this structure of your business does not protect you personally from lawsuits, then you might be personally liable if you are sued or default on a loan. You might lose your home or your car. Forming a business entity may also give you more credibility and give your business a tax advantage.
- Act Like an Entity.
Registering your business as an LLC or Corp gives you liability protection that a sole proprietorship does not. However, merely filing the Articles of Organization/Incorporation does not grant you blanket liability protection. Keep business assets separate from personal assets, maintain proper records, sufficiently capitalize your account, etc.
- Protect Your IP.
Know the differences between patents, trademarks, and copyrights. As a writer, you should especially understand copyright law basics. Copyright registration protects creative expression made in fixed, tangible media. Copyright owners have the exclusive right to make copies of the work, distribute copies of the work, and display the work publicly. You have a copyright by default. However, you have no right to enforce your copyright or sue without registration. You need to register your work within three months of making it available to the public to avail yourself of all remedies under the copyright act.
- Understand the Difference Between a License, an Assignment, and a Work Made for Hire.
These words have different legal implications and using them incorrectly could mean the difference between ongoing royalties or the loss of all IP rights.
- Get it in Writing.
Even if you are doing work for friends, or as a favor, it is important to put down everyone’s expectations in writing. This is especially true if there could be any confusion over IP rights, timeline for the project, number of re-edits, etc.
