Guest post by The Legalpreneur, Andrea Sager, a small business lawyer.
When I built my law firm, I was intentional—I wanted to focus on developing a practice that catered to small business owners and start-ups. I loved the passion, resilience, and drive each entrepreneur poured into their business, and I was committed to helping small business owners reach each milestone. I started my legal tech company for the same reason.
In both my tech company and my law firm, I noticed a recurring pattern of small business owners not running their business like a business. It’s often the same story—what started off as a hobby soon became more profitable than a 9-to-5. But because the foundations of a business were already established, the entrepreneur didn’t know how to pivot into running a formally structured business. If you fall into that category, or if you’re a business owner who still has not consulted a lawyer, this article is for you. Here are three legal requirements for starting a small business to help secure and protect your brand:
1. File as a legal entity
One of the first things I make sure all my clients have is Interns. This means the small business owner has filed the appropriate documents as one of the following: sole proprietor, LLC, partnership structure, or corporation (including S-corp). Which entity you file under is dependent on your business size, purpose, and revenue. Consult an attorney or tax professional before making this decision.
2. Prepare contracts
You may also need independent contract agreements. If you are commissioning someone to build out your website, build a course for you, or work in your business—and they are not an employee—it’s imperative that you implement independent contractor agreements. In the agreement, be sure to set out a clear scope of work, estimated timeline, payment structure, and an intellectual property clause clarifying what you own and what the contractor owns.
3. Intellectual property protection
Filing for IP protection is a lucrative way to secure your business’s intangible assets. It’s also an important step in solidifying your business’s name and branding. I generally recommend clients first conduct a trademark search before naming their business, to ensure that they can move forward with their selected name. Once you’ve found a name that you can use, trademarking it will ensure that you have exclusive rights to it.
Other modes of IP include copyright law and patents. You’ll want to use copyright law to protect content that you produce including, but not limited to, the verbiage on your website, social media content, and any courses that you make. Patent law, on the other hand, protects any new and innovative technology that you create.
Legally protecting your business does not have to be scary, but it is something that you need to pay attention to. Remember to keep things simple, get it in writing, and consult an attorney as soon as you can.
For more information and resources on protecting your business, visit the Nationwide Business Solutions Center.