The Art of Online Business
Safeguard Your Success: Essential Legal Tips For Each Stage of Your Online Business | w/ Braden Drake
Wed Jun 14 2023Description
This episode covers the importance of layers of protection for your business, including insurance, legal documents, taxes, S corps, intellectual property, copyright protection, worker misclassification, and proactive legal measures. It provides practical advice and resources for online business owners to navigate these areas and avoid potential legal issues. The episode concludes with additional resources and recommendations for further learning.
Insights
Layers of Protection for Your Business
Risk-averse individuals and businesses with employees require more layers of protection. The stages of business progression determine the need for additional layers of protection. Essential layers for businesses in the zero to 30K revenue range include contracts and insurance.
Insurance and Legal Protection
Insurance is a cost-effective investment for online business owners. Forming an LLC provides a layer of legal protection. Contracts such as independent contractor agreements, terms of service, privacy policies, and operating agreements are important legal documents to consider.
The Contract Club and Taxes
The Contract Club offers contract templates for different programs at an affordable price. Paying quarterly taxes is essential to avoid penalties and interests from the IRS. S-corps are a tax status that can be applied to an LLC or corporation.
S Corps, Intellectual Property, and Copyright Protection
Filing as an S corp is beneficial for saving self-employment taxes. Stage three involves intellectual property considerations like trademarks. Copyright protection for course content can be filed on your own.
Copyright Protection, Worker Misclassification, and Legal Action
Registering a copyright provides additional protections. Outsourcing bookkeeping is advisable at stage four of business growth. Worker misclassification is a compliance area that online businesses should be aware of.
Worker Classification and Proactive Legal Measures
Online business owners may need to classify support people as employees. Enforcement of worker classification rules varies by state. It's important to proactively address legal and employment issues in your business.
Conclusion and Additional Resources
The episode concludes with additional resources and recommendations for further learning on the legal side of running an online business.
Chapters
- Introduction: Layers of Protection for Your Business
- Insurance and Legal Protection
- The Contract Club and Taxes
- S Corps, Intellectual Property, and Copyright Protection
- Copyright Protection, Worker Misclassification, and Legal Action
- Worker Classification and Proactive Legal Measures
- Conclusion and Additional Resources
Introduction: Layers of Protection for Your Business
00:00 - 07:15
- The concept of layers of protection for your business is introduced, comparing it to layers of clothing.
- Risk-averse individuals and businesses with employees require more layers of protection.
- The stages of business progression determine the need for additional layers of protection.
- For businesses in the zero to 30K revenue range, essential layers include contracts and insurance.
- Insurance is often overlooked but crucial for legal protection.
- An example is given where a client faced a potential $50,000 lawsuit for copyright violation.
Insurance and Legal Protection
06:53 - 13:25
- Insurance is a cost-effective investment for online business owners.
- You can start by consulting your existing insurance agent, and if they can't help, ask for referrals from peers or online communities.
- The coverage level of insurance policies varies based on the size and nature of your business.
- Forming an LLC provides a layer of legal protection by separating personal assets from the business in case of lawsuits.
- Contracts such as independent contractor agreements, terms of service, privacy policies, and operating agreements are important legal documents to consider.
- The Contract Club offers a variety of contract templates for different programs at an affordable price.
The Contract Club and Taxes
12:57 - 19:00
- The low ticket offer is a program called the contract club, which provides all the contracts needed in one place for a price of $30.
- The contracts are templatized and made more general to benefit everyone in the contract club.
- The offer has been successful, selling around 1200 units and generating $30,000 in revenue last year.
- Affiliate agreements, licensing agreements, and other templates are included in the contract club.
- For more specific or high-value transactions, it is recommended to hire an attorney.
- To join the contract club, visit notavglaw.com.
- In addition to contracts, paying quarterly taxes is essential to avoid penalties and interests from the IRS.
- Quarterly taxes are a compromise between sending automated payments with every income and paying at once.
- The penalty for not paying quarterly taxes is around 4% of the tax owed.
- S-corps are not a type of entity but a tax status that can be applied to an LLC or corporation by filling out a form.
S Corps, Intellectual Property, and Copyright Protection
18:37 - 25:39
- S-corps are not a type of entity, but a tax status that requires an LLC or corporation first.
- Filing as an S corp is beneficial for saving self-employment taxes.
- Salary is considered earned income and subject to self-employment tax, while additional profit is not.
- To file as an S corp, it's recommended to have around $70k in profit and an LLC business entity.
- Determining the salary for an S corp involves considering industry standards and the hats you wear in your business.
- Stage three also involves intellectual property considerations like trademarks, especially after establishing name recognition.
- Filing a trademark is best done through an attorney to avoid mistakes that weaken the trademark.
- Copyright protection for course content can be filed on your own and is less complicated than trademarks.
Copyright Protection, Worker Misclassification, and Legal Action
25:09 - 32:13
- Copyright protects works of authorship, such as content.
- Registering a copyright provides additional protections and allows for seeking legal fees without proving actual damages.
- Sending a threatening email can be an effective way to stop copyright infringement.
- It is recommended to copyright everything, including new content created each month.
- Outsourcing bookkeeping is advisable at stage four of business growth.
- Worker misclassification is a compliance area that online businesses should be aware of.
- California has strict rules regarding worker classification, known as the ABC test.
- The ABC test requires control and direction over the work, the person hired having their own established business, and the work being outside the usual course of the hiring entity's business.
Worker Classification and Proactive Legal Measures
31:46 - 38:39
- Hiring a podcast manager as a contractor requires them to have their own business
- The hiring entity's business must be outside the usual course of the work being hired for
- Online business owners and course creators may need to classify support people as employees
- Enforcement of these rules varies by state, with California being strict
- Jurisdiction is based on where the worker is located, not where the business is based
- California's strict enforcement has led some companies to stop hiring from the state
- The law regarding independent contractors in California is poorly written and confusing
- Similar tests may apply in other states, such as a totality of the circumstances test
- It's important to proactively address legal and employment issues in your business
- Don't wait until something happens to take action on these matters
- Connect with the speaker through their podcast, book, or website for more information
Conclusion and Additional Resources
38:13 - 40:02
- The podcast is called 'Unfuck Your Biz with Braid and'
- Braden has a book with the same title
- Braden offers a signature program called the Contract Club, which is a group program in course
- They also provide one-on-one legal and tax services
- All the links mentioned in this episode can be found in the show notes on RickMolready.com
- It's important to keep up with the legal side of running an online business
- RickMulready.com/braden is an affiliate link to join Braden's contract club for $30
- Subscribe to the podcast and leave a rating and review on Apple Podcasts if you haven't already