Understanding Your Business’ New Identity

If you incorporate with the state your business has a new identity and it’s important that you understand it so you don’t make a mistake and the LLC or Corporation does not protect you. That’s the purpose of incorporation, for you personally to have limited liability protection from the actions of the business. If you’re a sole proprietorship… it offers zero liability protection for your personal assets.

So… Listen in to learn about your new identity and check out the below photos for a visual example. Not understanding this can lead to you making a $15,000 contract mistake and personally being on the hook for every penny if it.

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A.I. is the Buzz... But Who Owns the Copyright?

A.I. this and A.I. that is growing as folks are chatting and promoting A.I. created content, logos, blog posts, and even chats… like ChatGPT.

But have you ever stopped to ask yourself, who owns the content created by A.I.?

As a business owner, this should be a big question because the answer I am about to share with you should influence your content creation strategy and your strategy to grow and own your intellectual property.

So… let’s break down the basics of Copyrights.

Copyrights are a type of intellectual property that says original created works fixed in tangible form are protected. The owner is the actual creator. Copyrights cover books, blogs, social media posts, graphics, photos, videos, gifs, music, poems, and logos.

Copyrights attach immediately (so no more mailing things to yourself if you were doing that). But filing with the U.S. Copyright Office gives you more legal rights to defend and protect your copyright creations.

If the original creator owns the copyright, then who owns creations made by an A.I. aka Artificial Intelligence?

Well…. according to the U.S. Copyright Office and a few cases…

NO ONE.

There is NO COPYRIGHT for A.I. created content.

What does that mean?

It simply means that if an A.I. created your logo, photos, blog content, anything… there is no copyright and no copyright protection. Any one can use it without permission and without your consent because A.I. creations are part of the public domain aka not private property.

Why?

Well, the U.S. Copyright Office basically says copyrights require a human element as part of the creation. Without the human creativity, there is no copyright boo.

You can use A.I. but now you know that if you want to protect your creations or logo… it is best to get a human involved, at least for now, unless the U.S. Copyright Office changes their mind and decides to apply copyrights and copyright protection to A.I. creative works.

Want copyrights? Use a human.

Not the human creating the work? Don’t forget to transfer and assign the copyrights to you or your business, or else… you still don’t own the copyrights even though you paid.

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Choosing the Right Lawyer

I receive requests for referrals from time to time with business owners asking for a business attorney. But...

Business attorneys are not made equal.

Some attorneys focus on small businesses. Others on large companies or franchises.

Some do only business registration and contracts (that’s limited to state law only). Others do trademarks and copyrights (that’s federal law).

Then there are those who work only with certain types of businesses or issues.

Some attorneys only do trademark registration but not prosecution. Same with contract drafting versus litigation.

Here are a few tips for choosing the right lawyer:

1. Attorney is the proper title for a lawyer who passed the bar exam to be licensed to practice law in a state. Lawyers just graduate law school and are not authorized to practice law.

2. Understand attorneys cannot work with any business. Our law licenses limit us to state practice only unless it’s a federal legal area.

3. Know what legal needs require an attorney licensed in your state versus any attorney. Business formation, contracts, employment law, and legal counsel are all state. Trademarks and copyrights are federal (any attorney).

4. Facts matter and your industry. Be clear with the attorney or check out their website to see if they work with your kind of business. Some industries have more regulations (rules) so a specialized attorney is what you would need (i.e., cosmetics, food, construction, etc.).

5. Check the state bar registry to make sure they are licensed. A fake attorney got found out for trying to represent a woman CEO. Her business is well known but it could have gone another way real quick. Yes, there are scammers in the law. Oh, watch out for attorneys who are disbarred aka they have been suspended from the practice of law and their license was snatched.

6. Check out their social media to see if you like them. You should work with someone who you like or have common values with as they are working with you in and on your business, but you want to find someone you can build a relationship with so that they become familiar with your business and your legal needs.

Now, I see business owners all the time asking for referrals, but because they don’t understand what I shared above and that there are different attorneys for different things, their requests go unanswered.

So, here are a few tips for requesting a referral that gets a response!

1. Identify the area of law.

   Employment law has two sides - employer and employee. It’s best to be specific about the area of law and the side. For example, business attorneys may not do contracts or all types of contracts like Franchise Agreements or Copyright Licensing (#3). Same with Trademark Attorneys who may not do Copyrights and if you need non-Trademark help, your Trademark Attorney may not be able to help you if they are not barred in your state. Which leads us to #2.

2. Identify the state or state’s where your business is located or where you need the attorney licensed in.

   As an attorney, listen up: WE AIN’T GOT PERMISSION TO PRACTICE IN EVERY STATE! State law governs our license and the laws vary state to state, so to be competent, we can only practice in the state we are licensed in. Now, it doesn’t matter if its federal law aka intellectual property (trademarks, copyrights, patents (although patent attorneys need special permission to practice before the USPTO)).

3. Identify briefly your legal needs without giving away too much detailed information aka the specifics.

   See #1. Saying you a need a business attorney doesn’t help if we don’t know what type and for what reason. I’m a business attorney, but some contracts I won’t touch right now like Real Estate. Why? Because business law is must bigger than just business law and same with contracts. Facts matter and experience, not always, can really come in handy.

4. Include your industry or description of your business.

   Your industry matters because a business in the service industry has different legal risks than a food or catering company. Some attorneys are more experienced in working with businesses in a particular industry that gives them insight into how to navigate certain issues.

Facts MATTER! Getting the attorney that is a good match for your business is key and the above tips will improve your chances of cutting through the non-qualifiers and receiving the qualified referrals you’re looking for.

*** Oh, don’t get caught up in EXPERIENCE. Attorneys are required to be competent and just because an attorney has been practicing for years which some think is EXPERIENCE does not mean they are more competent or excellent… just they got longevity in the legal game.

You may not like to hear or read this, but choosing the right lawyer also means asking yourself: Am I the Right Client?

Attorney-Client Relationships goes BOTH ways. You may be paying, but all money is not good money and clients DO GET FIRED! I want to share a few tips to help you not get fired by your attorney.

1. Be Responsive.

   Just communicate. Your attorney is a person too with a life. We understand life be life’ing. Being responsive doesn’t mean you answer in full detail when you cannot. It does mean a quick note saying: “I received your email and I need some time to get back to you. Will do as soon as possible.” This goes a very long way!

2. Communicate in a timely manner.

   There are certain deadlines depending on your case, that your lack of responsiveness can cost you your money and all the time put in on your case or registration. I just read of a client that ghosted her trademark attorney and then a year later asked for an update when they never responded to the attorney’s request, submitted the required information, and was upset the attorney’s fees increased since they last spoke. Do NOT ghost your attorney! No matter how busy life gets… your likelihood of a referral goes down and being branded as a sour lemon client goes UP!

3. Be a person of integrity and pay what you owe by the deadline.

   As a business owner, do you like outstanding invoices? No? Let’s follow the golden rule. Work out a plan if you need to with your attorney to pay what you owe. Most (I believe) attorneys will work with you because we understand life be life’ing. Don’t skip out on the bill. It has a way of coming back to bite you in the end.

4. Respect the fact and hard truth: Your attorney’s world does NOT revolve around YOU.

   You are not the only client your attorney has. Do not expect immediate responses and respect the firm’s communication policy. You are important. You just aren’t the only important client on your attorney’s list (no matter how much you paid). Clients do get FIRED for being demanding or requiring too much attention. (I’m telling you what I read other attorney’s say!)

Those are a few tips… I hope you find the right attorney for your business and that you are the right client for your attorney.

If you’re in Maryland or DC looking for a business attorney, you can schedule a free call at www.legacylegalconsult.com to see if we are a good match.

3 Legal Considerations Before Launching A Business

Here are 3 Legal Considerations Before Launching A Business…

1. The cost

It’s exciting to have an idea for a business but consider the cost of launching if you don’t have a real marketing plan.

This isn’t to discourage you but to help you consider the costs of a business.

Costs to consider:

1. Opening the business: Incorporation fees

2. License and permit fees

3. Annual fees to maintain your business registration

4. Closing the business

5. Capital needed to run your business

This is money? How is that a legal consideration?

I’ve had clients who launched and life happened. So while the business was registered, they were not making money and neglected to pay the $300 yearly tax in Maryland. When they were ready to try again, they had to pay $600+ in taxes and penalties just to get the business back in good standing to do business.

Others have failed to pay the tax and their business was forfeited (taken back by the state and registration cancelled).

Count the cost… there are legal consequences if you don’t.

2. Choose the right entity

Choosing the wrong entity or legal structure could mean more paperwork and more taxes.

There are pros and cons of each and it depends on your business for what works best for you. Whether sole proprietorship (solo), LLC, partnership, or corporation.

Just so you know... sole proprietorships and partnerships don’t offer personal liability protection to their owners (you’re on the hook for the business debt).

3. Choose the right name

A brand is as powerful as its name.

Many have launched with a beautiful name only to get smacked, legally speaking, with a cease and desist letter. The threat of being sued and unable to fight back meant rebranding. That also meant losing out on all the work and money they put into naming their business, product, or service. Imagine having to reprint 200 bottles with your new brand and throwing away the old 250 in storage.

Ouch.

Consider these 3 before you launch and save yourself the heartache.

Want to launch safely? Enroll in the Start-Up 101: Foundations Bootcamp here.

You’ll learn how to avoid the top 3 above and step-by-step launch your business.

Copyright © 2023. Be Empowered Networks, LLC. All Rights Reserved. You may share only if you include the following credit: Chayla Jackson, Esq., www.iamchaylajackson.com.

Disclaimer: This post is for educational purposes only and is not legal advice. Please consult an attorney.

***NEW FEDERAL REPORTING LAW*** Corporate Transparency Act of 2022

READ CAREFULLY OR LISTEN IN… This NEW Federal Reporting Law starts January 1, 2024 and carries with it a $500 per day civil fine or up to $10,000 or up to 2 years imprisonment for criminal penalties.

If you want to skip the headache of a mistake and receive training on how to comply and complete the reports for the CTA, sign up for the Corporate Transparency Act CEO Walkthrough Training. I will walk you through step-by-step and you will have access to the training until 2024. Learn more and sign up at: bit.ly/CTA2024.

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On September 29, 2022, the U.S. Department of Treasury issued the final rule for the Corporate Transparency Act of 2022 (CTA).

Beginning January 1, 2024, the Corporate Transparency Act will require all reporting companies to report beneficial owners who have 25% or more control of the company, company information, and company applicants to the Financial Crimes Enforcement Network (FinCEN).

*** For convenience, you can listen (6.5 minutes) to the legal update on the Corporate Transparency Act and scroll to the bottom for the rest of the newsletter or continue reading to learn more. ***

Have trouble viewing? Click here to watch on YouTube.​

Who must report?

All LLCs, corporations, and any entity created by filing with the Secretary of State are considered reporting companies and will be required file an initial report. Companies formed prior to January 1, 2024 will have one year to file. Companies formed on or after that date will have 30 days. Non-compliance may result in $500 per day of violation and criminal fines of up to $10,000 and up to 2 years imprisonment.

For purposes of the CTA, you are required to report unless you are a non-profit or sole proprietor. Non-profits and sole proprietors are NOT required to report. If you do not have active 501(c)3 status with the IRS, you are classified as a corporation and will be subject to the CTA reporting requirements.

Who is a beneficial owner?

A beneficial owner is any individual who, directly or indirectly, either exercises substantial control over the reporting company or owns or controls at least 25% of ownership interests in the reporting company. Even if you own less than 25% of the company, if you are a senior officer, have the power to appoint and remove officers, or have substantial influence over company decisions, you are a beneficial owner.

What information are you required to report?

For beneficial owners, you will be required to report their name, mailing addresses, social security number or identifying number (active passport or driver's license number), and additional required information.

When do I have to start filing an initial report?

January 1, 2024. For all companies in existence before that date, you will have until January 1, 2025 to file. All new companies will have 30 days after they are incorporated. If there are any changes in your ownership, corporate structure, or you lose your exemption for reporting, you will have 30 days to report the changes.

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Sign up for the Corporate Transparency Act CEO Walkthrough Training. I will walk you through step-by-step and you will have access to the training until 2024. Learn more and sign up at: bit.ly/CTA2024.

Interested in learning more about how to legally protect your business? Join my mailing list today.

Why you should never write your name at the top of a business contract?

I was doing research on indemnification in Maryland for a client and came across this case. 

In previous posts on contracts, I share that your business name goes at the top of a contract as the Party, never your name. 

In this case, they tried to seek indemnification from C&H, who is the owner of a business that used a property manager to rent it’s property. 

The court said NO because:

1️⃣ C&H is not a party to the contract aka their name is not at the top. 

AND 

2️⃣ You cannot sue a member of an LLC absent some exception just because they are a member. The LLC protects them.

🕵🏽 What is indemnification?

It’s a doctrine that requires another party to defend and pay for a legal case against someone else. For example, A sued B, but C must defend B because B and C agreed to indemnification.

You could be paying thousands of dollars. 

To avoid these issues, make sure you’re protecting yourself and using contracts correctly. Watch for indemnify or indemnification language in your contracts. That’s a clue someone wants you to be on the hook if anything goes wrong. But if it’s your contract, you might want to consider having it in there. Client gives you bad info and you get sued because of it… that’s one example of when an indemnification clause is good to have written in the contract.

🗓 If you’re a Maryland or DC business, schedule a free discovery call to discuss your business here.

⚠️ Disclaimer: This post is for educational and informational purposes only. It does not create an attorney-client relationship and is not legal advice. This post may contain an advertisement.

Whose Name Goes At The Top of Your Contract?

You may be wondering, whose name goes at the top of a contract? Or confused about whose name you write at the top of a contract?

The answer is… the contracting party that will be bound to the contract terms.

If that’s your business, your business name should be written at the top like it is listed in the state registry. This is very important as using a name other than what is listed in the state database could result in a contract with a sole proprietorship instead of your LLC or Corporation. That’s bad news because sole proprietorships have no liability protection which means they are suing you, not your company.

Where do you sign your name? You as the owner or authorized agent, sign at the bottom of the contract with your official company title.

Don’t make mistake of putting your name at the top. When things go south, you’ll be on the hook, not your business.

📝 Need contracts to protect your business? Shop now here.

⚠️ Disclaimer: This post is for informational purposes only. This post contains an advertisement.

Got Legal Questions?

This is a popular question and one that trademark attorneys will disagree on.

Here’s my answer:

No. You do not need to trademark your business, brand name, logo, or slogan when you register your business.

First, you are starting out and many entrepreneurs make changes and pivot from their original idea in business to see what is viable in the market.

Until you are sure that the brand, logo, slogan, or business name is the one you plan to build on, save your $200+ on trademarking.

Now, if you know that you don’t want anyone to steal your idea and you are sold on it. Trademark it. Trademarks afford you with broader protection to enforce exclusivity to the use of your trademark for the class you file in.

There are two ways to file: under Section 1(a) Use in Commerce or Section 1(b) Intent to Use.

The first, you must be actually using it in commerce (business) and the second, you intend to use it. If you file under the latter, you will have to pay more fees and file additional paperwork.

So short answer: No, you do not have to file for your trademark at the same time you register your business.

Truthfully, once you know you have gold worth protecting, protect it. This is where I recommend you get a trusted Intellectual Property lawyer to help you navigate the process and file correctly. There are no refunds with USPTO.

See you next Friday for Got Biz Legal Questions?

One Woman's Business Shutdown for Infringing on Iowa's University Trademark

Article Source: The Gazette

Intellectual Property + Business Profits

A woman brought fabric with University of Iowa Hawkeye Logo on it from Joann’s Fabrics. She read the license but it was wrong. She woke up and found out her thriving business she started during COVID19 got shut down. Her website SHUTDOWN. Profits SHUTDOWN. {SWIPE to read the article}

Her argument: It’s not hurting anyone.

When you build a brand you have a right to protect it. That’s exactly what University of Iowa did.

How many face masks or T-shirt’s have popped up with famous logos on them?

Don’t get your business and profits shutdown because you won’t invest in doing it the legit... Legal Way. And for creatives making them be careful you’re not designing a mask, shirt or any product at a clients request with a logo or slogan that’s copyright protected.

Secure Your Profits by Grabbing Your Copy of Build A Legit Business and Avoid Costly Legal Mistakes like this one and many others at www.buildalegitbiz.com

Want to read a chapter of the book before you buy and still learn about trademarks, copyrights, and protecting your brand, click link in my bio or grab free ebook at bit.ly/ProtectMyBrandFreeBook

Article Source: The Gazette

Tax Day: Business Taxes You May Need To Pay

Today is Tax Day!! Thanks to COVID-19 we got an extension.

Make sure you pay all your taxes as a business owner and file your forms.

Last week I reconciled my books, pulled reports and sent myself a Schedule K-1 so I could file my S-Corp return with the IRS. Last night I made sure I paid $300 for my business’ property taxes and submitted the return. Because in the past, I forgot.  So I took precautions. Yes, your business may have to pay property taxes. It’s an asset and separate person in the eyes of the law.

As business owners, we sometimes wear multiple hats.

So if you don’t have access to legal counsel, make sure you’re legally complaint by filing and paying any and all of the taxes in the photo that apply to your business.

Have you filed your business taxes?

3 Ways to Avoid Legal Entanglements in Your Business

Jada & Will and their marriage are the talk of the town.

Soooooo... it’s the perfect time to talk BUSINESS ENTANGLEMENTS.

Before you let another person, potential investor, collaborator, or company into the intimate parts of your business and creative ideas... get a non-disclosure agreement or a confidentiality agreement signed. A NDA prevents disclosure but a Confidentiality Agreement requires the other

party to take preventive measures to protect the information you plan to share unlike a NDA. If they breach... you may be able to sue.

Protect Your Assets & Your Profits.

#BeLegit #StayLegit

#BuildALegitBiz

On top of that, don’t steal someone else’s work. Infringing on another person’s trademark or copyright can cost you a pretty penny.

Don’t get caught up in a legal entanglement. It’s not cute and it can cost you. Purchase Build A Legit Business and Avoid Those Costly and Deadly Legal Entanglements that can kill your business and profits. www.buildalegitbiz.com