Legal Q & A for Creative Entrepreneurs - Brittany Ratelle - Live IG replay

Hi guys, thanks so much for those of you watching the replay. I'm going to give it just a minute to spin up here, show up. I don't know, is there an appropriate verb for like make go live? I feel like spinning up is like what your hard drive does, but I don't know, percolate through the interwebs and let anyone jump on who wanted to jump on. But thanks so much for joining me here on Tuesday. Sorry that this the time has kind of bounced around a little bit. I've had to adjust childcare plans because I had someone set and then she had to go back to Australia, which was super sad. We lost Aussie nanny, but now we have Aussie nanny 2.0 and she's also really amazing. But anyway, she had to switch days. So moral of the story is, because I'm a mompreneur and I work from home, sometimes things are messy and I gotta be flexible. And anyway, and my work schedule is around what I can get good childcare for my kids. So, um, sometimes things have to change and adjust. So anyway, um, hi Ben, good to see you. So, um, while, uh, while we're warming up here, if you guys want to put where you're from in the comments or what your business is, and/or, um, if you want to, but I'm always curious to know how people are finding me, um, and what their business is so that I can make sure that I'm developing content and, um, serving you and answering your questions, um, the best way that I can. So let me jump on and make sure my Facebook is live. Okay. Accessing camera. Arizona, oh awesome. Arizona, you probably don't have the winter white snow that we got. Ours happened yesterday. Like literally on Saturday. It's funny, my husband and I, we just noticed. We have a picture of my kids against our tree on Saturday. And we're all, you know, there's our bear tree and we're out playing. And then, yeah, on Monday, yesterday, we woke up to 6 inches of new snow and winter wonderland outside. So pretty crazy how quick stuff like that changes, but my kids were pretty excited because we got to spend the day yesterday morning sledding. So, okay, all right, well, we've got a couple people on. I know some more are joining. Not where I live, but up north, but yes, Washington, very cool. Adrian, blogger, writer, awesome. So I'm Brittany Ratelle, and I am an attorney for creative entrepreneurs, and so what I do for people is I help them with their businesses, their small businesses, micro businesses, indie businesses. There's like a zillion different names that people are calling them now, but basically if you are a small business owner, and especially if you're working in the creative fields— if you're a blogger, designer, graphic designer, photographer, you're an infopreneur and you sell courses online, or even if you sell physical products versus digital products— I'm kind of an attorney that's for you and helping you with your businesses. So I like to get on, I try to get on here every week and answer some questions from people because I understand that one of the biggest barriers to working with an attorney is that they're seen as expensive and, you know, really kind of scary. You know, like it's a big deal to make an appointment and sit down in someone's office and even to know, A, are they the right kind of attorney? B, how much is this going to cost? And I'm embarrassed to maybe ask how much it's going to cost and feel like I'm not savvy enough. And C, is this really useful for my stage of business? Am I even at the level where I need to be talking to an attorney? And if so, What do I need to be talking to them about? And so I kind of am here to help dispel some of that and wade through some of that and give you some clarity and confidence so that you can be the business owner that you want to be. So, okay, so, and with that disclaimer, I will say that while I'm a licensed attorney here in Utah, I'm not your attorney unless you want me to be, in which case please sign up for a free consult. We can talk about your business. If you want to work with me and decide that we, gel together, that it's a good fit, then you'll sign an official engagement form, and that's how I become your attorney. So, this is not it. So, anything I talk about today is just for your information, education, acumenical purposes only. So, if you have specific questions about how what we talk about might apply to your particular business in your jurisdiction, please talk with a licensed attorney wherever you live. Okay, so with that, I'm gonna jump on to the questions that I got beforehand. And if you guys afterwards, I'll open it up to anyone else. So if you have just those in queue and then you can write them in the comments as soon as I kind of talk about the couple that I got before. Okay. The first was someone wanted to me what to walk through the benefits are of that, what the cons are. And the first thing I responded to her is I actually have a podcast episode that really directly answers this question. So my first response is please listen to that. Please go listen to that. It's podcast episode number 4. My podcast is called Law and Wit: Creative Counsel for Entrepreneurs, and you can listen to it wherever you listen to podcasts. And that talks a lot about what is an LLC, why is it a good idea, what are some of the costs involved. So really directly answer that question, but I'll give you the elevator pitch answer, which is an LLC is a limited liability company, and it means that you are officially setting up as a business separate from you as a person. And it's a great idea pretty much universally. I don't think I've ever actually not recommended it to someone if they were making any kind of money in any type of business anywhere, um, because it separates your business assets from your personal assets. So that means when you have a problem in your business, it's just limited to a business problem. That means if someone sues you, um, whether they slip and fall at your party or your restaurant, or they get one of your bath bombs and it does some crazy allergic reaction, or you hire someone to do your website design and then there's an awful contract fight and someone now is suing you and saying you didn't pay or you stole their stuff or their ideas. You know, these are all the things that can go wrong in a business. There obviously, there's a million. That all just stays within the business. So if someone wants to sue you, they can only get at your business assets, what you've put into the business. They can't get at you your car, your home, your retirement accounts, your spouse's income that might be mixed up with yours and your personal assets. So it's a really great, really great thing, um, it's to do for your business. So, um, the cons, really only cons are, is that there is some money involved and it depends on where you live. Here in Utah it's really reasonable. Um, I— registration fees are under $100. And if you work with an attorney, I do these for people on a flat fee. I set up their LLCs for them, single-member LLCs. I set up For $350 flat fee, I take care of everything for you. I send you the little form, you fill it out, then I do it for you. You don't have to worry about anything. You just answer the questions and I make it happen like magic. Um, multi-members are, um, meaning you have more than one person in your LLC, like it's more like an LLC partnership, um, are usually $500. So because that it's a little bit more complicated because we have to work on the operating agreement and how that's going to work, and that's a really important agreement that says This is what the ownership shares are in the company. This is how we're going to handle voting on stuff. This is how we add someone. This is how we kick out someone. This is what happens if someone wants to sell and is done with this business. All of that needs to be laid out in your operating agreement. And so single-member LLCs, you can do them on your own. You don't have to use an attorney, but, and some people don't, but multi-member LLCs, anytime you're working with another person, I really, really recommend you sit down with an attorney because those kinds of questions that I just ran through, can get really messy if you haven't set up clear expectations and a discussion at the beginning of how things are going to be run in this business. Who gets what when things are going bad and when things are going well? Because of course there is never a problem until there's a problem. So, um, so that's LLCs in a nutshell. And you can find more information about that wherever you live in your jurisdiction if you search for your Secretary of State, like, business website, um, is usually where you're— and they'll usually have What are the filing requirements? What are the fees? Again, in Utah they're under $100, but like in California, they're $800 and $900, so, because that's just California being fun about encouraging entrepreneurship. So, there you go. And so that's LLCs. The other question I got was how to make a legal agreement. So this is otherwise known as a contract. And a contract basically has a couple different requirements. Versus what makes it actually a legally binding agreement. There needs to be a meeting of the minds, meaning there needs to be a clear indication that you guys came together and intended to form a contract. Like, it wasn't just we were talking about something and then maybe, you know, and then suddenly it happened. Like, there needs to be, you know, a formal moment that you guys have decided, like, we are signing a contract. Obviously, this is why written contracts are so much better and preferable and all stages of business because you are looking at a contract, you are reading the terms, and in that contract it will talk about what's the consideration, or basically the compensation. What is each party getting because of this contract? And maybe one party gets money and maybe one party gets services. That's a really common contract that we have, um, or product. Um, another thing that's really important in a contract, um, is that you're making sure that the parties have had time to consider the terms of the contract and to consult legal counsel if they wanted to. That's a provision that's, you know, one of the boilerplate provisions that's in a lot of contracts. It's really important to set out what law will be governing that contract, and that's kind of called a governing, you know, choice of law provision, and that's usually found at the end of contracts. There's a couple other provisions that are kind of the boilerplate that are usually at the end of most contracts that kind of set out Responsibility. Severability clause is really common. That basically says, even if one part of this contract is found not to be enforceable, that there's some bad voodoo about it, everything else is still good to go. So that's really important. So, you know, the main idea for a contract is that it needs to be written down. That's not to say that oral agreements can't ever be enforced, or something like that you do in an email, but it's certainly not preferable because someone can say in an email, "Well, I sent that to you on this date," and the other person can say, "Well, I didn't get it. I didn't respond back," or, "It got sent to my spam folder," or something else happened. There's not that mutual execution and signing saying, "I read this and I agree that this is what happened." Thanks, Trey. That's my brother saying, "Love you, Six." Thanks for jumping on, especially since you're in Hawaii. Aren't you on the beach? That's where I want to be. I want to be in Hawaii. Soon. We're actually gonna go back in a couple months for my sister's wedding. We're so excited. Anyway, where was I? Contracts. But anyway, written contracts are really preferable. There's a couple areas of law where they have to be in writing. Anything that deals with real estate has to be in writing. Anything where performance, meaning actually doing the work, whatever you're talking about, takes more than a year, should be in writing. So just as a default, you should put everything in writing, and then you're safe. Okay, so put everything in writing, please put it in writing. I've been working on a case for someone who unfortunately they didn't have it in writing. There was a parting of the ways in the company. You know, he says these guys owe him money. The other company says, "No, they don't because of this, because we think there was a non-compete." None of this was in writing, so now it's just, you know, he said, he said. That's what happens when you don't have things in writing, stuff like that. Again, there's not a problem until there's a problem. So please get stuff in writing. And if you have questions about that, sign up for a free consult with me because I draft custom contracts for people and I have a pretty robust bank of some. So I can usually get you a really cost-effective solution if there's one that you need for your business. If you need a template because you're doing the same kind of business over and over, you're a photographer who's taking pictures, you're a food stylist who's doing this, you're a model and you don't have a release, actually, usually it's people on the other side, photographers who want one, but you know what I mean. Um, you are a media agency, a digital media agency, and you provide this list of services for clients, but you don't have that in a contract yet. Come talk to me. Let's get that written out so we can protect your business and make sure people have clear expectations about what you're doing and what you're not doing in your business. And what, um, so you don't have scope creep, so you don't have issues with payment, you don't have issues with intellectual property, um, about who owns what. Those are the kind of things that I deal with a lot when people haven't set out expectations in contracts. So contracts are great. Yay! They're a good thing. Okay, the next question I had was, "How might my state business license expiring affect my ability to file taxes?" This one's a little nuanced. I will put the asterisk on this, that this is probably a question you should also ask your bookkeeper/CPA, because anything filing taxes is actually more of an accountant realm and not necessarily a legal matter. But I will say that you can file taxes and should file taxes. You should. You should be doing that as an upstanding citizen of our fair nation every year. And whether your business license expires shouldn't really affect your ability to file taxes under your business. Even if you are a professional, like an LLC, one that's like a professional licensee, like some law firms do that, or some like doctors groups do that where they're a professional LLC and you have to be in a licensed profession to get that designation. Even if your license expired at some point— Hi, can I talk to you in a minute? I just need your phone. Okay, just a minute. Yeah, you don't need my phone right now. Okay. She loves the phone. So, but even if something like that expired, you should still pay your taxes and it wouldn't affect, you know, till the next fiscal year. So, In taxes, you always have the option, even as an LLC, to be designated as an S-Corp, but you have to do that by the first month of the year. So, um, talk to your accountant if you think that that's an issue and you want to change how you're going to be taxed versus LLC, which is pass-through taxation— mean everything passes through your clear LLC and down to you as a person, both your profits and your losses. If you want to change that and be taxed as an S-Corporation You can stay with an LLC but just be taxed differently. That's something you need to do the first month of the year in January. So that probably just ended. So, but be thinking ahead for next year if that's something you want to do. Talk to your CPA. You just have to file some forms and you can make that happen. Thanks for the laughing thing. Yeah, that's classic, classic. You know, that's, that's the 5-year-old. She just wants to be on the phone. Okay. Okay. Someone else is super random but wants to I'm about to start a book review blog and was wondering if I can post book review book covers as that's a violation of copyright law. This one, I'm pretty sure that you're gonna be fine. Certainly you're okay with talking about the book and especially if you're just showing a cover of it and you give credit, meaning you're sourcing who it's from and not making it seem as if this is your original creative work that you are somehow, you know, represented or endorsed by this, you know, you make it very clear what the purpose is that you're using the photo for, you're going to be fine because you're going to probably be covered under fair use. And fair use is a really nuanced conversation. A lot of people always ask, is this fair use? But the one designated category that obviously this would fall under is review or criticism. So that means if you are a food critic, you can talk about a restaurant and you can put a picture up of a restaurant because you are talking about it. If you are a movie critic, you can do the same thing. So as a literary critic, if you're talking about a book and reviewing a book, um, you're going to be able to reference that book and have parts, little excerpts from it, talk about it, um, and put artwork up that shows the book. So as long as it's very clear that you're not copy and pasting the whole book, you're not trying to interfere or pass yourself off as you or the book, which you wouldn't, you know, you're not going to do that. So yeah, so that should be, that should be totally fine. So, but I would And make sure you're sourcing. That's always good practice. And because it's only going to be, you know, someone's only going to make it into a problem if they don't like what you wrote and they're going to try to raise a stink and be like, oh, by the way, you stole my cover art. And then, you know, it'd be nice just to be able to point them to say, actually, I didn't, and here's how I sourced it and made it very clear that this is yours and I'm just trying to identify the book so that people know. So, okay. And then the other one that I got beforehand was someone wants to post reviews of products that I purchased and the products given to me. 'Where does the line of defamation begin? I won't slander, but there may not be great things I have to say about a product or its ingredients.' So again, this, because you're acting in a, you know, as someone who reviews goods and is giving, you know, criticism, your own personal opinion, you are going to be fine. Defamation only comes into play where you are, and it's really hard to prove with anyone who's like a public figure or who would be a company, and that's what I would— someone who's selling goods, you know, if you have a problem with something that you ate and you decided to write a review about it, you would have to— the company, if they tried to sue you for defamation, would have to prove that it was false, the things that you were saying, and you knew it was false but you did it anyway. And that's a really, really high standard to meet when you have someone who's a public figure who's decided, like, I'm gonna sell things as a public business and push my goods into the marketplace. So That's why defamation is not going to be an issue when you're reviewing a product that's in commerce. You should be able to say whatever you want to. If you want to have, you know, you can put the little parentheses at the beginning saying, "These opinions are just my own," and just to make it clear that you're not saying like it's a statement of fact, like this thing is garbage. It's just your opinion that they're garbage. Even if you didn't do that, you're still going to be fine. You're going to be fine. People need to grow up and pick their big boy undies on, big girl undies on about that people can say something that they don't like your product. That's okay. That's part of having a product. Not everyone's going to love it. That actually should be a good sign to you because if your product is for everyone and everyone loves it, then it's probably kind of a vanilla thing. Anyway, be bold. That's what I think. Be bold. Okay, those are all the ones that I got beforehand, but I have a couple more minutes left. So yeah, so I'll open it up to anyone else who jumped on here who might have a question. So if you do, go ahead and put it in the comment box and I'll see if I can answer it for you. And while people are doing that, I will stick my other two resources that I have for you. I mentioned my podcast, Long Wit. It's a weekly podcast. I try to be. I didn't put out this weekend, but weekly podcast. You can listen to it wherever and it's all about creative counsel for entrepreneurs. I have a mix of interviews that I have from successful creative entrepreneurs in different fields who are people from bloggers to graphic designers, um, people who are, uh, I have— I had my friend Noelle on there who's a brand strategist for the Wyndham Hotel Group, so a luxury, luxury hotel, um, group that has multiple brands. And she talked all about managing a really luxury brand and what that looks like, and on that business end of working with bloggers and influencers. And it was really good. I had the Allison Show on there, I had Miranda Anderson of Live Free Creative on there last week, so great resource. And then I mix with that kind of legal tips about things like this, questions that I get enough, a lot, that I think would be really helpful to have in a format like this for you to be able to listen. Okay, Cozy Geek says, "How do you decide if your product idea is similar to something else already in the market?" That's a great question. So, you know, the thing is, what the product is, it really depends on what the space is. If it's something that you think that it already has a patent for it in terms of a physical product, and you think that what it does is unique enough that the way it does it is different than anything else and someone's already taken steps to protect that, then, you know, you may have to think about your design and you should go and look up that patent and read on it, which you can, they're in the public domain, and then decide if your idea is unique enough that you could also secure protection from it. If it's something else where it's like a creative work, meaning, you know, you see something that you're inspired by and you want to create your own design, you know, you see some cool hand lettering and you also want to do some hand lettering of something, for that it really becomes a little bit more nuanced discussion of how close is it to the original. You should look into, are you going to be, if you're charging and using it for a commercial purpose. That's different if it's just for a private purpose. How close of a work it is as a whole, you know, if you have only a little bit that's inspired of something versus, you know, 90% is the same and you only put your own little flourish at the end. So that's hard to say without having more context, but those are generally the kind of things that you should be thinking about when you're considering what else is in there and if your idea is unique enough. So But if you have more questions about that cozy with your— it's a product for quilters to use but it's not patented. Okay. Yeah, if it's something that's not patented and it's something that solves a problem that's functional enough, then I think, yeah, you should start pursuing that idea and then you should talk to someone who does patent work. You know, talk to an IP attorney who does. I don't do patents, so I'm not the girl for you. But I know some people who do. But talk to someone who can do a little bit of work in thinking about that, about how it would be addressed in the marketplace in terms of— because there's a whole strategy in how you do the drawings and how you go through the process depending on what type of good it is and what it is and how you want to market it. But I think those are really good steps to think about in the beginning because a lot of people don't think about that until later on, until they've already picked a cute name and launched a website and branding strategy and a launching strategy and spent all kinds of other money and time and effort, and then they get around to like, oh, I should probably check on legal protection, and then they find out that someone else has the exact same thing. And they've, you know, either it's a trademark or a copyright or a design or utility patent, um, and that, you know, can be real devastating to find at that stage in the game. So I think it's really smart to be upfront about that, um, and to at least start that process of looking and talking to someone, um, And then really doing some really good testing of the marketplace. I think that's the other really thing that a lot of creative entrepreneurs look over is, will the market pay what you want to charge for to solve this problem? Because there are things that can solve a problem and yet they're not at a price point or they're not going to be marketed enough or advertised enough to the right people for it actually to be a feasible business idea. So I think it's really smart to have all of that mixed together. I really like Pat Flynn's Start from Scratch book. I read that and I thought it was a really good overview of that process in terms of what should you be thinking about when you're trying to launch a new business and solve a problem. And it works on, you know, you introspectively as a business owner and what you should be doing in terms of launching a new product and all the questions you should be asking about that. So I would recommend that book. Okay, and then Julie asked, can I publish a Book of Mormon in a different format, wide margin, and then sell it? I'm pretty sure you can. That one, you're going to have to talk, you would have to talk to, the Book of Mormon is owned, the intellectual property, by the Intellectual Reserve, which is the copyright arm of the Church of Jesus Christ of Latter-day Saints. So, that'd be a conversation you need to have with them to get licensing rights to it. But I think I've seen someone else recently publish their own wide version. So, but anytime you have a copywritten work like that, you need to talk to the original person who owns it. To see, are they available for licensing? And they might be. They might just say, that's fine, we're happy to have you license it in this format. And they might even license it to you for free. But that's definitely a conversation I would have with them. So, okay, I have time for one more question. So whoever can get in here quick, I'll have them answer it and then we'll wrap up for today. Is that, listen to my podcast. Longwit Creative Council for Entrepreneurs. And the other one is I have a newsletter that gets sent out every week that has tips. I also send out the link to this. I post these on YouTube so you can watch the rebroadcast, or you can send to a buddy who missed it who might find this useful. Um, I put those links on my newsletter. Um, I kind of summarize what come of my tips that I gave on my Instagram account, which is really great because we all know is the algorithm sometimes it's your best friend and sometimes it's your worst enemy, and it doesn't serve you up the stuff that you want to be seeing. So I, you know, I understand that you as a business owner probably want all the legal tips like this that you can get, all the free legal advice. So I make sure I do a little summary of that in my newsletter so that you can get those tips to you. So sign up for that at BrittanyRatelle.com/newsletter and you'll get a little freebie kind of overview checklist of things, legal issues you should be thinking about with your creative small business. So you'll get that when you sign up to be on my newsletter. So I make it short and sweet. I know that your email inbox is precious. Heaven knows I guard mine like a dragon, you know, at the portcullis. But in honor of that, I try to make this short, sweet, funny, digestible, useful. And if I don't have something good to say in those categories, I don't send one out. Because I'm not just gonna waste your time and ramble on in there. So, 'cause life's too short for rambling emails, people. Life's too short for any of that. So, okay, I don't think anyone else jumped on. All right, so I'll close up for today. I hope everyone has a great week. I don't know if I'll be able to do next week because I'll be at Alt Summit in Palm Springs. Anyone out there gonna be at Alt with me? Anyone? Anyone? So I'm gonna have to play it by ear because I'm just gonna be busy doing all kinds of Boss Babe things in my pink blazer, which is definitely coming with me. So it might be the next week that I come back and circle back and can do another one of again. So if you have stuff that's come up that you've been thinking about percolating, make a note of it, a question, and then I'll let you know on my Instagram. I'll put it in the highlights when I'm back and you can join me again. If this has been useful to you, please share with a friend. You know, I've been working legal work in the last few years, but the marketing side of this and the advertising and the social media is all very new to me and I am very much an amateur. I'll agree to that. So I would love for you to share this with someone if it's been helpful to you. I would really appreciate it. So anyway, thanks so much for being here and have a good day. And thanks so much for being on Facebook, guys. So appreciate it and you have a good day too. Bye.