Note from Meryl – we met Sarah at the DCBKK conference in Bangkok earlier this year. There aren’t many professional services experts (accountants, attorneys etc) who understand online businesses. We had some great chats with Sarah and were impressed with her knowledge, so we asked her to put together this post on ‘knowing your legals to protect your business’. Take it away Sarah! 

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You’ve Got Your Accounting Set – Now What About Legal?

As a small business owner you know that there are some important steps to take in order to protect your money and your business. At the core of any smart business is a strong legal foundation that will protect your business as you continue to grow.

So today I’m going to give you the legal low down on how to protect your online business. Whether you are selling products, 1:1 services, or software services, there are a few key pieces that you need in place to #protectyourpassion (and your income!).

 

For EVERYONE

No matter your type of small business, there are some things that everyone needs to do if they have a website and are making money from that website (or hope to one day).

Make sure your Website is Legit with a Privacy Policy

A privacy policy is a legally required and NECESSARY part of your website protection. It is basically a disclosure document, the main purpose of which is to inform (and therefore protect) consumers.

Anyone with a website collecting any email or contact information has to have one.

In the United States, because of California law, if you don’t have one, you can get fined $2,500. No thanks. And no, it doesn’t matter where in the US your business is located, because your website shows up in Cali! Canada, Australia, UK, and Europe all have similar privacy laws. A privacy policy is fairly straight forward and you can get an attorney drafted template easily – grab yours!

 

Protect Your Website with Terms + Disclaimers

So how can Terms and Conditions and Disclaimers help? Well, these documents are about protecting your business and content. The Terms (may also be called Terms of Use or Terms of Service) outline how your website should be used and what people can (and can’t do) with your content, as well as protect your intellectual property (blog posts, opt-ins, videos, etc).

The disclaimers, similar to those in a contract, protect you from liability (that means losing dollars!) should anyone go off the rails and misuse the information you put out there and end up physically, financially, or mentally injured.

 

Google First

When picking a name for your business, product, or service, you want to make sure no one else is already using it in your industry (or you could potentially be opening yourself up to trademark liability).

So Google It. IMMEDIATELY. And don’t just check page 1 – go up to page 10-15 and see if anyone in your industry is using it. This is the quickest way to weed out direct competitors that may have trademark rights.

Wait, what are trademark rights? Meaning someone else already has a claim to that name. If they are in a similar industry and also doing a similar service (online course, membership site, coaching, etc.) they likely already have a legal right to it.

Here are some handy resources to find out more about business name availability in different countries:

  • California (USA)
  • Australia
  • Canada
  • UK
  •  

    For ANYONE SELLING A PRODUCT

    This includes pretty much anything that is not a 1:1 service, so whether that is a physical or digital product, monthly membership site, recurring SaaS service, etc.

    Use Terms of Purchase for EVERYTHING you sell

    You probably have heard this term (see what I did there?)

    In your business, there are various LEGAL TERMS that you need in place.

    So what are Terms of Purchase?

    Note: these may also be known as Terms of Service. (I know, it’s all confusing – what’s important is what is IN each one, not what they are called.)

    Basically, it’s a legally binding document that is an agreement between you and your customers that exists to protect you and your income!

    Terms of Purchase are located on your checkout page or next to your purchase button with language like: “By buying this product you agree to our Terms of Purchase.”

    Here’s an example of how this might look on your website:

    What else?

    • Terms of Purchase are directly tied to a product, monthly signup, group program, membership site, or online course/digital product.
    • They include terms depending on the type of product (eg, a physical product will include return and shipping terms while a membership site will include cancellation policy)
    • Includes your refund policy (what happens if someone buys it and changes their mind?) and disclaimers to protect you and your business.

    It’s worth mentioning that just having an FAQ section or similar Terms in the footer are not cutting it in the courts of law. They are finding that customers need proper notice of what they are buying in order to be bound by the Terms.

     

    FOR 1:1 SERVICES

    A custom contract is THE most important document you need in your business to lay your legal foundation and ideally you should have this in place before you collect your first dollar.

    This document outlines the details of your package, what you are providing (and NOT providing) and the policies you have in place.

    For example, what happens if your client comes to you after 3 consulting sessions and wants a refund after she has paid in full? Will you give it to her? Will you hold back a percentage as a service fee? What are you legally obligated to do?

    The other important part of a contract is having the proper disclaimers in place. A disclaimer protects you from claims or liability and is basically saying that you will not be held legally responsible for anything that may happen to your client as a result of your work together.

    Finally, your contract should include things like: how long the agreement lasts, how you are being paid, , protection for your intellectual property, confidentiality, and more! Getting this piece in place is super important to protect your biz and income.

    You will also want a contract in place if you are hiring independent contractors, web designers, working with a partner, etc. ANYTIME money is exchanging hands – get something signed!

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    Follow the above and you will be setting a strong legal foundation in your small business.

    Questions? Feel free to reach out – always happy to connect with other entrepreneurs and make sure they are protecting their passion!

    Note – none of the above should be construed as legal advice, this is merely educational information.

    Sarah Kornblet

    Attorney for Online Entrepreneurs at sarahkornblet.com
    Sarah Kornblet, JD, is an attorney for online entrepreneurs.After several years at a law firm and a few career jumps, she ended up falling in love with online business and now spends her time helping entrepreneurs achieve their dreams in a smart and protected way.

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