Brittany Ratelle - October 16 Small Business Legal Q & A - IG Live replay

Hi, I'm Brittany Ratelle, and this is my Monday weekly live small business Q&A session. That's a lot. That seems like a lot. And something that's pretty simple. I'm here, I'm an attorney that's licensed in Utah, and I help entrepreneurs, creatives, folks like you, online business owners, makers, influencers, bloggers, vloggers, a whole bunch of different kinds of people who are making money and hustling online. A lot of them who are doing things either service-based or information-based businesses, and I help them set up their legal stuff. And I'm here every Monday. I try to be here to answer any small business questions that you might have. I'm gonna give it a few minutes just so that everyone has time for it to join in and for people to jump on. Hi, Mitzi, glad to see you here. Salt, Freshly Married, thanks for joining me today. Again, I'm Brittany Ratelle. I'm an attorney licensed here in Utah. I do have to give the disclaimer that while I am a licensed attorney here to practice in Utah, that any information that I give today is for informational or educational purposes only. Obviously, this medium is not the traditional attorney-client relationship. You'll note no leather-bound books behind me, no fish tank— not that you don't always have to have that— but But just so you know that anything that we talk about today obviously doesn't have any privacy because this is live and not private at all, and that it's just for your benefit, for your education information. So if you have any questions about what I've talked about or how it might apply specifically to your business, please consult with a licensed attorney. So sorry I have to say that. That's just part of the shtick as being an attorney. You gotta, gotta CYA. But since we have a couple people on, I'll go ahead and start. Let's see, our first question— maybe I'll do Freshly Married because I know she's on. I also got one from Silently Surviving Souls. Well, maybe do that next because I want to make sure she can hear it. So Freshly Married, she asked that I'm making video courses, not free. Great, because making money is great. And want to include some material from professionals in the industry but don't know if it's okay to use some of their theories and research in my content. "how would I properly cite them and is that enough?" And this is a great question because obviously online courses are having a moment, in case you've been living under a rock, and they're proliferating across the internet and people are finding all kinds of different ways to package up what they do or what their expertise is and finding a way to try to offer that to other people in an online course format. My advice is when you are looking at source material and best trying to understand how you could package that and share that in a legal way is to ask yourself, for what purpose am I sharing this information? And is this the only way that I can share this information? So I'll try to kind of give you an example. So say you are doing a course about, you know, strengthening your marriage, like Freshly Married might be doing. And you have a statistic or you have a chart that you have from somebody. Say a chart because it's a little easier to talk about graphics. So if you have a chart from the Gottman Institute or someone else in the space, Laura Markham, who does a lot of work in working on marriages, and even if it doesn't have their copyright information, a little, you know, little C circle or watermark in the bottom, you got it from their website or from one of their books, you know, it belongs to them and they're the one who created it, that image belongs to them. So in the world of copyright, whoever is the person who creates the image, whoever snaps the picture, Whoever fixes the idea that goes in their head into a tangible medium that you can share, that person now owns the copyright to that. However, there is some room for fair use, which I'm sure you've probably heard the term before. And fair use is the copyright doctrine here in the US that says that we recognize that there are circumstances when you should be able to use something from someone else because it's for a literary purpose, it's It's for criticism or commentary. Like if you are reviewing a movie, it's okay for you to cite things about that movie because that's the whole purpose is you have to be able to refer back to the source content. If you're doing a parody, an SNL skit of something, it's okay for you to use some language, even some direct quotes or some likeness. It's okay to draw on those elements because it's parody, it's humor. Because you're trying to refer back to that original content. In the case of a course, the fair use test is a four-pronged test. And the fair use test is basically you're supposed to look at the purpose and nature of your use. You know, why are you taking someone else's content? What are you going to do with it? The nature of the copyright work. It's different if you're taking, you know, one slogan or one statistic that someone published on their website that said, 50% of marriages don't work if couples don't go on a date night once a week. Say someone did that and did some research and now has posted that somewhere. If that's all you're citing is just that one statistic, you're not copying the whole study and putting it on your website or, you know what I mean? It's about a scale thing. So it's looking at how much content have they put out and how much of that, how big is your piece versus what they put out. That's what that is, the amount and substantiality of the portion taken and the effect of the use upon the potential market. And that's looking at the commercial element. By you posting this content and having this in your course, are you making it difficult for this person who owns the copyright to do their job and to make money from what they do? So this, you know, is what happens a lot when people, you know, copy t-shirts from other people or artwork, you know, If someone has created a really cool custom artwork on a t-shirt and they are selling it and then you just copy and paste the image and you find someone who can print it and do the exact same t-shirt, do you think it's making it difficult for now that original owner to make money now that you have a competing product? Or do you think that people who are buying yours are confused and maybe think that you are the artist and actually own the copyright material? It's likely. So, that four-prong test is something where it's on— the onus is on you to kind of work through that and think, um, and is what I'm doing in terms of taking this content going to be enough? Um, the best practices, kind of practical speaking, to help you out is, um, if you're going to use someone else's content or really need to for your whatever your purpose is, the best thing you can do is link to it when you can, because that way you're just referring people to other work or where to find information, and you're not taking it wholesale and putting it in too. So link when you can. When you can't, maybe when it's inside a course and that seems impractical or cumbersome for your students to do, then I think you definitely want to cite. You want to make sure that you're making it clear that this is not your information. You want to put either the website or the name of it and their copyright information, even maybe even describing that all rights are reserved to that organization, that you are not claiming that this work is yours, that you have the freedom to disseminate it. And if it's something that becomes an important part of your course, that, you know, if you're relying upon it a lot, I would even probably go through the steps of asking permission to use it. So, and if it's something especially that's academic in nature, if it's research, then it's likely that they're gonna be fine with having you use it. Even if it's something like a tagline or statistic, you know, people are usually reasonable, you know, as soon as they figure out, oh well, you, you were gonna credit me, um, you're not trying to steal my stuff. Um, what makes people nervous is people just wholesale scraping everything on their website and then packing it up and selling it as yours. Because we know that happens online now. There's people who— that happens, everything that happens on their blog, every post, every picture, every thought gets scraped up by bots, um, and put on someone else's website and, and sold as theirs. And that's what's really frustrating when someone— because we all know how how long and taxing and how much of a labor of love content, original content creation really is. So, um, does that answer your question, Freshly Married, um, kind of about that? So a lot of it comes down to exactly what it is you're using. Um, again, I would be more careful about images, um, than it was about actually using a statistic. A statistic, if it's just something that you're citing, you're probably going to be fine there. If saying this organization found in a study that this happened, so "Okay, you used my exact example with the Gottman Institute." Okay, yeah. I just, they're one of the ones that I know that I know they're in the marriage space. So, but I, if again, if it's just a stat, I think you're gonna be fine. If it's a graphic of theirs, I would ask first and see if there's another way that you can give the information and maybe create your own that's based on it, but that's not copying and pasting exactly from their stuff. So, because I don't know, this, I get this question a lot, but just 'cause something's on the internet, That doesn't make it in the public domain, people. Public domain refers to something that was published before 1927 and its copyright has died because we only allow a certain amount of time for copyright to live and then it has to go, has to be put to sleep, has to be rest in peace. So public domain is not a Google image search. Just because you found it on the Google machine does not mean that it's yours to use. Be mindful of that. Okay, the next question that I was gonna tackle is from Silent Surviving Souls, Silently Surviving Souls, and she says, how do I get "A business license for photography." And the— if you have— and I'm assuming that she means that she's gonna run, or she is running, a photography business. You're welcome. And is wanting to know, "How do I get a business license?" Business licenses, also sometimes called business permits— they're really the same thing— are offered at the city level. So that is a city ordinance normally that says the City of Provo has made a decision that we like to know who's running a business within our city limits, and we just want them to go through this process so we know what type of business it is. Are they doing any kind of harmful processes, any loud stuff? Is there foot traffic that we need to know of? Um, they want to keep kind of control over who's running businesses. So if you are running a business and want a license or a permit to do that, which I, I suggest you should, then you would go through your local city. So let's look up their website. They should have a portal under there, under, you know, commerce or small business department is sometimes what it's called. And they should have, hopefully online, and may have a really easy process. Like I know for Provo City, because that's one that I deal with a lot because I'm based here in Provo, Utah, they just have, they have an online PDF or PDF that you fill out and print out, and then you can either submit it online and you can run it into their office. So there's normally a fee attached with that to cover their processing costs, and then you renew it annually. But you know, you've been in a Vietnamese restaurant and you see that they've got the owners proudly displaying their picture of their family and then they have their business license and their first dollar. That's what we're talking about, is that business license. So it's that you get an actual certificate that says you can have a business. That sometimes gets confused with business registration, which is having a DBA, having an LLC, or having an S corporation or a C corporation. Those things, which are official business entities, are things that are done through the state level. So those, you go to your state department website, usually it's your state commerce or secretary of state for whatever your state is, like in Utah, and you go through the process of registering your business. If you haven't done anything to set up your business yet, if you have not registered for your business, and you would, you would remember it if you had done it, then you are a sole proprietor right now, today. That's what you are. That's your default status. That is the Times New Roman of businesses. If you haven't done anything else to change it, that's who you are today. And that's fine, but it doesn't offer you any liability protection. It means that your business stuff and your personal stuff is all mixed in. Your assets, your liability, your house, your business payments, your home payments, everything's all mixed in one bucket. So it means that if you get sued in your business, if something happens, if a contract goes wrong, if someone falls, slips and falls at one of your events, if someone takes one of your products and something happens to them and they sue you, they can now come after everything that's attached to you. All of your business, all of your personal assets, your home, your mortgage, your retirement, everything that's all mixed in together because you told the world that that was all mixed together because you ran your business as a sole proprietor. If you don't like that idea and you'd like to have some separation, then what you need is probably an LLC. And an LLC is normally the easiest and the cheapest, the least government, really boring paperwork intensive business entities to set up. So, and that LLC stands for Limited Liability Corporation, Company, because it's exactly what it says. It's giving you limited liability that says when I'm doing business under my LLC and I'm out here doing business things and I'm wearing my boss babe heels and I'm signing contracts in the name of my LLC and I'm making deposits into my bank account in my LLC and I'm buying product from someone else, from my vendors, for my LLC, that is different. That is a different shtick. That is not Brittany as a person. That is Brittany Ratelle as an LLC. And that's one of my LLCs that I have set up. So, um, and that's— and you can also use your LLC to go and set up your business bank accounts in the name of your business, which is really helpful for keeping track of your finances. If you're worried and concerned about bookkeeping and how onerous of a task that is, get yourself a separate business entity because it makes your life so much easier. You have a separate card for that, you can have a separate ledger for your inflows and outflows of your business, and if you don't have things separated like that, it makes it really hard to know how your business is doing. I mean, how can you know what your costs are really, what your expenses are, what money's coming in, what money's coming out. It's really hard to get a realistic picture at any point in time of how your business is doing if you haven't separated your accounting and your bookkeeping like that. So that's kind of a step one that I really recommend to most people. The fees are usually nominal. In Utah here, they're $75 to set up, and then they're $15 a year to renew. That's it. And what you need to do it is you— there's a couple steps, but you go in and get your EIN, which is your electronic identification number for the IRS, and it's basically a new Social Security number for your business, so it's under that number and not your personal Social Security number. And then you have to set up, and then you set up articles of incorporation. And if you use an online portal, a lot of times they do it for them. In Utah, they do that for you as you go through the little process. And then you set up an operating agreement, and that's the document I recommend using an attorney for. Yeah, you can go online and do it with Rocket Lawyer or LegalZoom or there's a million different websites selling you, you know, to set up your LLC. But look, make sure you're looking at the costs there and what they're actually providing for you, because sometimes it's actually cheaper in the long run to go with actually a professional who knows about your jurisdiction, who knows about your business, and that way they can set up the operating agreement, which is basically your internal document for running your business and tells you how it's going to be set up, who has ownership, Who's putting money in? How is ownership going to come out of that? The money going to come out of that? What happens if business fails? What happens if there's debts? What happens if you get sued? Um, all those tricky hard questions which need to be answered and set up at the get-go to protect yourself. So thank you, Hannah, for telling me I look fabulous today. That's my sister, and I did not pay her to say that, but, um, she is my fashion— my fashion advice, so that's good. That means a lot coming for her. So Those are the two questions I got originally, so I wanted to hit those right off the bat. But if there's anything else people have questions about, put them in the comment box. The time is yours, people, to jump on up there, step up to the plate, and if you have something that you'd like me to address, I'd be happy to do that. So I'm gonna turn my— I don't know why my desktop is beeping at me, but I'm gonna turn that off. So if you have any other questions about Content online, copyright, employment. I could speak a little bit to that. A little bit about taxes. I'm not an accountant, but I know a little bit about that to advise my clients. Running online giveaways, doing a little event planning. I was doing a little cleanup for a friend of mine, unfortunately, who had an event planning snafu this weekend that I was sorry to hear about, so we were talking about that today. "When do we need to copyright our work?" Enzyme, thanks so much for asking. So that's a good question. As soon as you put your ideas in some sort of fixed medium, meaning as soon as you write a blog post or even it's as simple as you put it on paper. As soon as you write it, you have actually copyrighted your work in terms of the law. That you have put people on notice that this is actually now something that you've created. And you could put the little C and symbol right then and there. In terms of your name. You could, you know, put all rights reserved, which is what I suggest people do. So that's why you see that in the footers of websites. Registering your copyright is when you actually go to the USPTO office, the US Copyright Office, and go through the steps of registering your copyright. And it's a little bit more time-intensive, it's a little bit more expensive, and a lot of people find that it's helpful to have an attorney, someone who does intellectual property law, walk them through the process. So And I usually only recommend that, because it's a cost-benefit analysis, you know, when you have something that's kind of become a big part of your business. So if you have a book, I would suggest copywriting your book. So if you have a flagship product of yours, something that now is bringing in a significant amount of money and you think is probably a likely target for people trying to rip off, then it's probably, it might be worth going through the copyright process. In terms of trying to copyright and register your whole website, I think that's really challenging because websites are super dynamic and especially for most people who have some sort of blog and online content creation attached to it, it's gonna be changing all the time and technically you would have to be updating that copyright all the time. But if it's something that you've put a significant amount of money and investment in and you think that you're gonna be able to see a good return or you've already seen a lot of return on it, then I think it might be worth going through the steps of copyrighting that because you get different protections. You can actually sue for different remedies and get those back if you've actually registered it. So if you haven't registered it and it's just on, you know, if it's just on a piece of paper and you say, look, this is mine, and you see someone else has copied it, you have to prove actual damages, which can be challenging. You have to prove that by this guy copying my stuff and putting it on his stuff, "He has ripped me off and cost me X amount of dollars." And that's really hard because you're trying to figure out who would have bought from you but then didn't because of this other person. You can understand how that would be— that's really challenging to try to prove. When you've registered it, you don't have to go through that crazy math. You just have to say, "Look, it's mine. I registered it on this date. This is the exact same content. This guy obviously did not have it registered, so I deserve damages." and it's a statutory benefit that you get, a remedy that you get. You don't have to prove anything, so that's what's nice. Mitzi asks, "How do we handle taking taxes out? About what percentage of our business income goes to taxes and other government fees?" So about taxes, it depends on if you're planning, if you are in the position where you're paying quarterly taxes., but most people find that they're usually taxed somewhere between, you know, it's like 30 to 50% depending on if you're running your business as an LLC and what your expenses are. So, you know, that's, that's a little bit probably more of a technical CPA question, so I would suggest consulting with your CPA. But most people find that they should be careful about how they're paying themselves from their business. So a lot of people I know decide that once they set up their business and they have kind of a general amount of money that are coming in each month that they then decide to have a set amount that's kind of a paycheck for them that then will go into a personal account. And normally that's a safer way of keeping your business and private money separate than you just having that, using that as a piggy bank that like, oh, this is my business account on PayPal and I just saw a really cute shirt and now I'm going to buy that from the same account. You see what I'm saying? So it is important to try to, um, pay yourself a paycheck and, and have that as an amount that you pay yourself. And then once it goes into your checking account or whatever, then it's, it's your money, just like all the money that would be in there is your money. So, um, but that's a good question in terms of— and it depends on how you're running your business and if you're being taxed as an LLC, which is just pass-through taxation, or if you're being taxed as an S corporation or a C corporation. So, and that— a lot of that changes as you scale your business, as you add employees and you have different balances of revenue and profit, that can change over time. So that's why get a good CPA, keep them on speed dial. I know, because I know people who've, who've been really disappointed that they didn't make that jump sooner rather than later when they were like, we could have been saving a lot of money. So as you start to grow and get bigger, which is awesome, I hope that you get to that, please, please talk to a CPA. So, okay, let's talk event planning. What type of legal snafus could I get into with throwing a party promoting my business? Great question, Hannah. So, um, and I just talked to someone about this this weekend because they were throwing a big event at a space, um, and they had, you know, they, they had emailed and talked to the owner of the event space and, um, they decided that it was going to be a set fee and they were going to get, you know, 3 hours booked. And she paid the money and then the morning of the event, um, she gets, uh, an email, either an email or call or something from the event places. It's like Oh, by the way, um, we're still selling regular tickets to just the general public during your same block. And she was like, what? What the heck? I, I, I rented this event. Like, that's what it means to rent out an event place. I thought we were on the same page here. Um, and obviously this business did not think they were on the same page there. And so now she has people coming who are like using all their stuff and in her space and this really, um, big event that she set up and they're not paying the same rate. And anyway, it's a mess and it was, hours of work and stress trying to get that all straightened out on the morning of her event, which if anybody who's done event planning knows, it's stressful enough just running an event when you have everything in the line, but when you're in a position where you've already had snafus about your contract, and she did not have a contract, so that was my first thing I said. I don't like to say, "I told you so," but if you are doing event planning, please, step 1 is please set up a contract. With your vendors. So that means that your space that you're renting out, if it's not your own space, if it's not something that you own yourself, you're working with a third party, please have a contract. Either they should have one and you should read over it and know what you're signing, or have someone talk to an attorney to know what you're agreeing to, or offer your own contract on your own terms to know how are you handling the deposit and what does that cover, you know, what kind of condition does the space need to be in before or after. Is it technical enough that you need to be doing a walkthrough and saying, "Look, this was damaged and this was damaged and this was not me." How are you going to handle— is there liability insurance? Is that something they provide? If someone slips and falls and gets hurt, is that something that you should provide as an umbrella policy for this one-time use? Or maybe if you do events a lot, then look at a policy that covers different locations and uses. Because that's something I've been to, you know, a lot of fun blogger parties and dancing parties and I know that's my weird lawyer nerd mind, but I always think about like, what happens if someone gets hurt here? I wonder if they've talked about that, about if someone gets hurt, you know, and I know we don't like to think about like personal injuries ambulance chaser attorneys coming in and ruining all of our fun, but it's something you need to think about and at least make the decision if you're going to decide that that's not in the budget or you're not— that's not going to be part of your risk management then, but at least know what you're deciding to skip. If you know what I mean, and not just be like, I'm just gonna put my head in the sand and pretend like that's not an issue. So contract liability, you need to talk about releasing details of the event. If you are the one who gets to have control over advertising, if they're gonna do advertising for you or not, you want to make sure that you have it clear about what amenities are being offered and if there's anyone on call. I've been to events where there are problems because restrooms were not up to par where they should have been, they weren't stocked, or they were— some things broke halfway through the event. And then you have a giant line of people waiting in line, you know, at an event. And if you're at like an all-female dance party, that's a problem. And you've got 40 pregnant women in line who are like, what the heck is going on? Why didn't anyone cover this? So, um, those are things to think about in terms of event. If you're doing it at a commercial space, you know, say you're running a pop-up shop or something, I would want to make sure that you have it clear on how are you going to be processing payments. Are you gonna be using their Wi-Fi? Is that okay with them? Are you gonna be using part of their cash wrap services? What about their staff? What's the expectation of how— what the store is gonna look like before? What is it gonna look like after? Are you gonna pay for cleaning? Is that part of the event fee, or is that extra? Just all of those things that need to be covered, and it should be covered and spelled out in a contract that you have with someone. So just spitballing, that's what I can think of in terms of event planning. So not to scare away, because events are great, live person events, and they can really add a one-on-one dimension that you can't get in other ways. But, um, you need to be thinking about those things beforehand so that you are setting yourself up for success. So, can you make a liability policy for attendees when they buy your ticket? Yes. So, and I've done that for clients before, is I've suggested that on their ticket checkout page that they have their terms right there so that they've agreed to, um, But, although you should have that to say, like, you know, everyone over 18, you assume your own risk of liability, coming to this space, there are maybe inherent risks involved. You guys have all seen that. You kind of know what the language will look like. But even the most broad signing away your life liability, say you're going rock climbing in a place, and you know the kind of liability waiver you're signing there that basically says, "The sky can follow me and I still can't see you." you, in most states, you can never waive gross negligence of a business or an employee. Which means that even if you have people sign that and you have people at your event who— what would be a good example for gross negligence? They are serving alcohol and they are not checking IDs, or they see something that's broken and someone decides— and someone even tells them, "Hey, this is broken," and they don't do anything to fix it. They just, they just leave it there and they can see it's really dangerous, that could still be considered negligence. You know, that a reasonable person should have done something to fix that, should have set out a sign that says, "Sorry, we're having a problem with this," you know, "Wet floor." That's why you see those wet floor signs all over the place, is because a grocery store knows that they have an obligation to try to warn you about things that they know about that are problems. So you want to be careful when you're running an event that Even if I, I agree you should have a liability waiver and that should be part of your ticket onboarding process as people are checking out, um, just know in your back of the mind that there's always some way for people to sue you if you really screwed up. So you, you guys got to be— do what a reasonable person would do. And if you're being reasonable and having your best efforts to try to keep people safe at your event, then you're probably going to be fine. But just something to think about, um, in the back of your mind. So Okay, thanks. We had a couple more people join in. I'll reintroduce myself quickly. I'm Brittany Ratelle. I'm an attorney that helps small business owners, online business owners, bloggers, entrepreneurs, creatives, makers, all those folks. And I run these Q&As on Monday. I try to hop on here every Monday and answer any questions that people might have. So we had a couple come in today. I can do about— I probably have about 5 more minutes left, so if there's anyone else that wants to add something, that has something that they'd like me to answer, go ahead and put it in the comment box, and I'll see if I can answer it for you. You're welcome, Freshly Married, thanks so much for joining me today. So, and, um, go ahead and put it in the comment box and I'll see if I can help you out. If you like what I'm telling you, if you want more information for your small business, um, and your online business, I give tips, free tips on my Instagram that you found me on. I'm on Facebook, uh, I'm on Pinterest, uh, my website's just my name, BrittanyRatelle.com, and I have a couple free guides on there. I have a course about influencer marketing that's about like the FTC compliances, you know, the hashtag ad that you've seen, about when you have to do that and why if you're a content creator, if you're selling things online. Um, that answers a lot of questions there. That's a free video course, that I have. I also have a guide about, kind of a legal cheat sheet checklist about running a creative business, that's available. So, and if you sign up on my Instagram here in my Linky Tree, I have the sign up for my newsletter. If you sign up for that, where I kind of give all these tips every week, I kind of give a review of what I cover in this session as well as what I'm talking about on Instagram and on my blog, then I'll, I'll send that free cheat sheet to you. So that's a business checklist. So sign up for my newsletter if you're interested, because as we all know, on Instagram today, sometimes you see content and sometimes you don't. And so, um, there's no guarantee even if you follow me that you're gonna see all the stuff that I'm, that I'm posting, um, because Instagram decides if it's relevant to you, not you. So, um, if you don't like the algorithm running your business legal strategy, then please sign up for my newsletter and that way I can make sure that at least once a week when my newsletter goes out that you can get those tips in your inbox. I really try to be careful about your time in real estate. I understand that our inboxes are precious, precious real estate. I myself have an overflowing inbox, so I don't want to waste your time and energy with stuff that I don't think would be helpful to you. So I take that charge seriously. So sign up, and I promise I'll be a good steward of that resource. Okay, if no one else has any other questions, then I'll wrap it up for today. If something comes up this next week, join me on Monday. Share with a friend that you might have, another fellow entrepreneur or business owner, and let them know that they can hop on and that I'm here to be a resource to you. So that's why I'm here, because I don't think this legal stuff has to be necessarily boring or scary. I think that there's a way for us to talk about it and for you guys to get this stuff taken care of so that you can move forward and feel strong and confident that you, you are a real business owner. You could treat yourself as a real business owner. You can get this stuff taken care of so that you are on the best path to success going forward. So, okay, have a great Monday and talk to you later. Bye.