Business owners received valuable lessons on how to make sure their business is protected during the Augusta Metro Chamber of Commerce’s Third Thursday Business Builder.
Attorney Rachael Ray of the Enoch Tarver Law Firm led the hour-long training session, sponsored by Rhodes Porter Business Development Logistics Management.
“The Metro Chamber embraced us with this series because we’re bringing on some of the tools and the resources that we actually use already,” said Cynthia Rhodes, the company’s strategist. “And Rachel is one that we use actually for our contracts because as you will hear, the wording is everything.”
Ray said the first questions new business owners ask are how to structure their company, should they have employees or independent contractors, and how to register trademarks and copyrights.
Ray said the single most important thing for any business, new or existing, is to surround themselves with good, local people.
“Having a good local CPA, a good local bank, is really important because you don’t want to be stuck on the phone with an 800 number when you need information now about maybe a loan or credit line,” she explained. “Or you need information about whether or not something’s going to have a tax implication for you down the road, down the line. You want to get that information now. So, if you have relationships with those people here and you can get in touch with them, I always recommend that.”
Once those basic building blocks are in place, Ray said the next step in the process is to determine how to structure the business.
Options are establishing a sole proprietorship, partnership, limited liability corporation (LLC), corporation, or multiple LLCs and corporations. However, without incorporating, the owner’s personal assets are not protected.
“The purpose of the LLC and the corporation is to protect your personal assets, to separate your business assets and liabilities from your personal assets and liabilities. A good way to keep track of your corporate monies is to get a corporate credit card and keep everything as much as possible on one credit card. Even if you get multiple cards and let everybody use them. It’s easy to track everything on one card and one account,” she recommended.
Ray said another consideration is to develop a relationship with a local attorney to establish what contracts are necessary, once the team is in place and the business structure is chosen. Contracts can be between clients, employees, independent contractors, and if a confidentiality agreement is warranted.
She said a mistake some business owners make is to pull contract information off the Internet, however, that can leave gaps in what should be included in contracts.
“Not realizing that there’s a lot of stuff that you guys can include in your contracts, like attorney’s fees, like a damages clause, like an injunction clause, things like that,” she said. “Some of the contract provisions that I’ve found a lot of business owners don’t consider until after they’ve had a breach, or they have a problem collecting on their contracts. The first one is the attorney’s fees for prevailing party provisions. The next provision was jurisdiction and venue.”
She said this is especially important for any company doing business out-of-state. Owners want to have a provision stipulating disputes will be filed on their “home turf,” in the state or federal court jurisdiction in which they are located.
Ray also walked attendees through the often complicated guidelines of trademark and copyright law. Each has two categories, Common Law Trademark and Copyright or Registered Trademark or Copyright.
“As soon as you start using your business name, your business logo, whatever it is, you automatically have a common law trademark, and you can start using that TM next to it. A common law trademark means your name or your logo is protected for your services in your geographic area that you are providing those goods or services,” she said. “Similarly, there is a common law copyright, there’s no symbol for it, that as soon as you make it, it is protected.”
She said the benefit of pursuing a registered trademark or copyright is it can provide protection nationwide. It is also possible to file for international protection. If someone uses your registered trademark or copyright without permission, you can file for statutory damages.
