Running a regular legal check-up of your creative business sounds boring. But it is critical to building a foundation to support your big goals. And unless you turn it into a habit, then it’s hard to change your pattern of behavior. (Pssst…my favorite book about habit forming is The Power of Habit by Charles Duhigg [affiliate link].)
And you probably don’t have strong habits around performing a regular legal check-up of your creative business.
To help you form a new habit, this post is three of four I’ll be doing this year. Each one outlines a set of legal tasks you should complete in your creative business that quarter. (You can see the January tasks here, the April tasks here, and the October tasks here.)
- check if you have all the required permits and licenses your business needs
- decide if it’s time to register your business name, logo or any product/service names as trademarks with the USPTO
- pay your taxes
- if you are doing business under something other than your legal name (or your LLC/corporation’s legal name), get a Fictitious Business Name (FBN) or Doing Business As (DBA)
- if you have employees, update your employee manual
- if you are an LLC or corporation, document all major business decisions and hold any required meetings
Check if you’ve got all the required permits and licenses your business needs
In most places, just by running a business you need a business license.
But you also might need a:
- seller’s permit
- home occupancy license
- fire permit
Based on your location and the type of business you are running, your requirements will vary. A good place to point you in the right direction is this directory from the Small Business Association.
Additionally, many city and county websites have a section dedicated to small business owners. And this part of their website usually explains what you need to do to run a legit business within their borders.
Your assignment: Double check that you are current and hold all the permits and licenses your business needs.
Decide if it’s time to trademark
You can register your trademark too early and you can register it too late. But at least once a year it’s a good time to evaluate if you are in the sweet spot to register any trademarks in your business.
Your assignment: Read this post to learn if you are within the registration sweet spot. If you are, make an appointment with a lawyer, because trademarks are one thing you should never DIY.
Pay your taxes
To make your annual tax time a little easier, each quarter you should pay your taxes. You might owe:
- estimated self-employment taxes to the IRS
- collected sales tax to your state tax agency
- employer’s taxes to the IRS and your state tax agency
Your assignment: Send checks to the appropriate agency (And if you don’t have a system to set aside the government’s money, I highly recommend Profit First by Mike Michalowicz [affiliate link].)
Different legal and business name: obtain Fictitious Business Name (FBN) or Doing Business As (DBA) statements
A Fictitious Business Name (FBN) or Doing Business As (DBA) statement is required when:
- your business name does not include the legal name of all of the owners
- your business name suggests that it is owned by multiple individuals
- the name the public associates with your business is not the same as your LLC or corporation name
In this video I break down examples of when you do (and don’t) need a DBA, plus share how to get it and why you should take the time to get it.
What kinds of things should you examine to decide what the public thinks your business is named?
You’ll want to look at your:
- website URL
- website header
- invoices and what appears on their credit card statements
- email footers
- business cards
Your assignment: Apply for a FBN/DBA with your city/county for any required names. (Note: these statements are the same thing but have different names from place to place.)
Employers: update your employee manual
Part of being a good boss is providing tools and resources for your employees. And one of these things is an employee manual that explains:
- how to do their jobs safely
- the rules surrounding their employment
- any benefits you provide
Maybe an employee forgot the social media password and changed it. And then when you tried to log in, you couldn’t. To make sure this doesn’t happen again, you’ll outline a system for updating and storing passwords.
Maybe you’ve decided to offer profit sharing to your employees. Because you believe this will incentivize good employees to stay or to reward their investment in building your dream. Since this is a new benefit, you need to outline to your employees how it will work. You’ll tell them how profit is calculated, how profit will be distributed, and what happens if they leave.
Your assignment:
- If you have an employee manual: pull out your employee manual and update it
- If you don’t have an employee manual: open a blank Google Doc and start outlining how you expect your employees to behave
LLCs and corporations: document all major business decisions and hold required meetings
The whole reason you created your LLC was for three big benefits. And to keep your fence strong, you are required to document all major business decisions.
To document your decisions, you don’t need to do anything fancy. It can be as simple as summarizing notes from a meeting or writing down what your plan is. (In legalese, these are called Minutes of a Meeting and Written Consents.)
Your assignment if you are a corporation:
- If you haven’t held your annual shareholder meeting and board of directors meeting, hold one
- Write down all the major decisions you’ve made in your business in the second quarter of 2017 and add them to your central file
Your assignment if you are an LLC: Write down all the major decisions you’ve made in your business in the first quarter of 2017 and add them to your central file. (Don’t have a template for these? We’ve got one in the artist’s Courtyard.)
#TL;DR
In July, there are between three and six legal tasks you should tackle to legally maintain your creative business:
- check if you have all the required permits and licenses your business needs
- decide if it’s time to register your business name, logo, or any product/service names as trademarks with the USPTO
- pay your taxes
- if you are doing business under something other than your legal name (or your LLC/corporation’s legal name), get a Fictitious Business Name (FBN) or Doing Business As (DBA)
- if you have employees, update your employee manual
- if you are an LLC or corporation, document all major business decisions and hold any required meetings
