Legal Basics You Should Know as a Business Owner

I know legal stuff sounds pretty boring and dry, right? But consider the consequences… lawsuits, your products stolen from you without any laws being broken, fines and penalties, and higher taxes. Now do I have your full attention?

It’s important you know these basics as a business owner. They’ll keep you, your clients, and your products safe, and they aren’t that hard to implement, once you know these 5 basic rights and obligations.

1. Photos

First thing’s first: just because a photo is marked, “Royalty Free,” does not mean it’s free to use. All Royalty Free means is that if you comply with the terms of service (which vary from photo to photo and might include a fee) you won’t owe anything else. The same applies to photos considered “Creative Commons.” There may still be strings attached, so don’t assume you can use a photo marked this way.

The smart way to use stock photos is to buy them from a legitimate stock photo site. They will make all of this legal stuff easy on you and give you the rights you need in exchange for the cost of the photo.

Also keep in mind that if your web designer or VA uses an illegitimate photo on your site, YOU will be considered liable and could owe the owner.

2. Contracts

Every person who does work for you, no matter how big or small the project, needs a contract with you. Period.

You can find basic, fill-in-the-blank agreements online for contractors, but be sure they come from legitimate legal websites. Review them at least annually to make sure they are up to date.

3. Trademarks

Trademarks are used to protect names of brands and products.

It’s important that you do a trademark search for your company name, as well as any major products you want protected, to see if YOU are violating an existing trademark someone else has registered under that name. Trademark violations have actually sunk small businesses in the past, so it’s not something to mess around with.

As long as the name is not already protected, you can take steps to secure a trademark for the name. Then you’ll need to come up with a plan to check regularly for trademark violators because even with a trademark, that responsibility is all on you. Setting up a Google Alert is a good, simple way to check.

4. Copyrights

Many entrepreneurs think they’re protected as long as they put a copyright symbol © on anything they produce. Not so. In fact, the law would not protect that alone.

You have to register a copyright in order for it to be enforceable, which you can do for your books and e-books, products, photos, websites, articles, and blog posts.

You can search and obtain copyrights on the US Copyright Office website.

5. Business Structure

Did you know there are 6 different ways you can structure your small business? Each has strengths and weaknesses, and you can choose what works best for you, depending on who owns your business, how you choose to report taxes, and how you want to structure profits.

The Small Business Administration outlines the different choices you have so take a look if you’re not sure your business is set up optimally.