Skip to main content

Legal Responsibilities

Lesson 20 from: Turn Your Talent Into a Business in 12 Steps

Beate Chelette

buy this class


Sale Ends Soon!

starting under


Unlock this classplus 2200+ more >

Lesson Info

20. Legal Responsibilities

Lesson Info

Legal Responsibilities

The prophet and laws is in the workbook we just went through the exercise on page number forty two and now on a number of forty three there is also a sample profit and loss I'm just going to show you this so you have this right here and I put a simplified version right there on the screen for you to take a look at and basically a profit and loss is pretty simple one side's for income the other side's for expenses and depending on what comes out of his either a profit or loss and you know that's the feminine familiarity familiarity with the numbers good let's talk a little bit about what's happening on the legal side we're going to be talking about business business entities which entity to select we talking about what the law is and we have a pretty exciting guest and his name is dan nelson and then nelson is coming to us life from new york he is from nelson michalak l l p in new york and he will be answering the questions off what legal responsibilities are for a business he's going t...

o give us a brief overview off cop a diva a c corporation as corporation llc a copy ride you can find him at www dot n m I p law dot com or contact him dan at n m I p law dot com so let's bring him on right now hey, you're looking good where in the world are you right now? You new york and los angeles I'm in los angeles I flew in from seattle last night. All right, excellent. Well, thank you so much for taking the time to be with us today. Thanks for having me. Excellent. So I just wanted you to tell our international audience and now american audience a little bit about what sort of legal responsibilities are off a business? Sure, I understand that they've been given some information about different corporate structures so I won't spend too much time on that. But just to give a breakdown when you do business, you either do you business as yourself for some corporate entity it's father d b a. When you just do business yourself without a legal structure, I wouldn't recommend it d be a a reason that I wouldn't is you have personal liability for all of your actions when you do business as a d v s so there isn't any what there isn't any legal protection it's often referred to as a liability shield that the corporate fiction creates a liability shield and it does so in a couple of different ways depending on the kind of corporate structure a corporation has liability protection for its officers and shareholders. So while the corporation maybe liable for certain actions, the individuals themselves aren't liable unless there's something called piercing the corporate veil, which I'm sure is his language that some of you have heard on dh that's difficult to do so in in a corporate structure you have protection personally for from liability of course, if you commit intentional towards or personally do things that constitute copyright infringement or something, you might still be individually liable for that. But generally before functions of the corporation inc is liable and the shareholders in officers aren't there some distinctions between types of corporations there are s corpse and see corpse and partnerships and l l sees the difference between an s corp and a c corp is just taxation as corpse have what's called passed through taxation where the corporation itself isn't taxed on earnings that's passed through to shareholders and they pay taxes on their proceeds eso its advantages from attack station standpoint in most cases from a c corporation. Of course, if you're going to set up a corporation, I would consult a tax professional about your individual situation in which is better. They're also partnerships on dh with l o p s and l l sees you see even the letters a lot and I think when diatta introduced me a unity is my firm's nelson and mcculloch opie as because nelson mccullough is a limited liability partnership and that's a form of limited liability entity you also see the term I'll see youse quite often, and the reason that you see these words when people are using their business names is because it's a requirement that you identify yourself as an llc or elope, because hello, seasonal opie's have limited liability and it's important that when you communicate with others, you're doing business with that, you convey to them that you're an llc, or that you're now elke it's often misunderstood what an llc is, even what it stands for now, I'll see is a limited liability company. A lot of people think loc means limited liability corporation, but there isn't any such thing. Corporations are liable for the acts of the corporation, and that could be in excess of the value of the corporation. So there you see corporations, bankruptcy and chapter eleven reorganization of the corporate assets l l cities are limited liability companies in the arc of corporate history, they're relatively new and there companies for which the liability is limited to the assets of the company. So there isn't personal liability for the members. They're called members, not shareholders and loc, but also the liability of the company is limited to the assets of the company on dh most entity is for small businesses should be set up as elsie's because of that protection, one thing that's important to keep in mind for creative professionals is when you go and you consult with your tax professional, you consulted a lawyer about what sort of entity to set up. You need to make sure that the entity you're doing business with is the holder of the rights in the material. If your licensing photographs, for example, some people get in trouble because they start a company and their licensing the right to something that they personally own on dh, there are a lot of headaches and hassles that could be caused by that, so my advice would be to register copyrights, for example, in the name of the entity you're going to be doing in business with. This is especially true now, as courts around the country in the united states at least are moving towards not allowing assignments of copyright for the purposes of litigation. And I think largely that that's a good thing for copyright owners. But contracts, for example, with stock houses that say the stock house has the right to pursue copyright claims are generally held to be unenforceable. And even recently there have been some cases holding that an assignment of copyright for the purpose of litigation is invalid. It's a common sense policy because the copyright owner has exclusive control of their copyrighted material and in the absence of a transfer of copyright ownership, it's just the copyright owner who has the right to bring a claim so coarse are suspicious of efforts to contract around that to assign that right to someone else that's a very good thing for people own content because they are you, dooley not in harmony with their agents in terms of their interests, that agency's general are much more willing to compromise copyright claims cheap because they're not the owner of the copyright, and they usually have a closer relationship with the license or or the infringer. In case of infringements, I'm going to talk a little bit about copyrights most people who are in the business of creating work, our photography on dh, most businesses that are in the business of licensing that don't pay as much attention as they should to their copyrights, and to the terms upon which they licensed their copyrighted material. Most people don't understand that if you create things, usually the copyright, and what you've created is the most valuable thing that you have, you can make it much more valuable on the easiest way to do that is by registering it. When you register your copyrighted work with the copyright office, you get enhance protections. Registering copyrighted material is a prerequisite to suing anyone for copy right infringement, so there are only two scenarios. There is one where you create a photograph, someone steals it, and then you register copyright, and then you sue them or you created you register copyright, then someone steals it and then you shoot him. In the second scenario, you khun get statutory damages and you could get attorney's fees for having what's called pre infringement registration. As somebody who represents photographers and copyright litigation for living, I can tell you that that often the difference between whether it's worth pursuing and french men, whether it isn't whether you have the potential upside that's normally created by the opportunity to have statutory damages, the opportunity to recover attorney's fees and costs, and so it's absolutely essential that you register your work it's easy to do, you can do it in the united states and left trying to me in on copyright dot gov, you don't have to be a us citizen and it doesn't even have to be a us work to register with the copyright office here on dh. There are some exceptions in the copyright law here for four and works foreign residents, but I would still advise if your licensing works in the united states that you register those words prior to licensing none with the u s copyright office. Okay, uh, then I'm going to stop you right here because we actually have quite a few questions that are coming in, so I would like to take a few questions if that's alright with you, sure, thank you. Hi, dan. This is jean marie. I'm one of the hosts here creative live. This is fantastic. The course fifteen minutes with him. I wonder what that's worth right lucky let's just exactly. So colin gee wants to know your thoughts on legalzoom it's z let me find the right word really feel it rhymes with scram legalzoom is a compiler of publicly available legal documents I don't know that it's a much of benefit to people I don't know if it's any more benefit and going on google and pulling things out, but be very careful when you use forms you know there's something to richard doesn't is it not worth it to use a lawyer, but be careful using forms and be careful using lawyers if they're outside the realm of their expertise or even if they are depending on lawyer is I just got done was a three day arbitration in seattle that was caused by on arbitration clause in a photographer's contracts that require mandatory binding arbitration in seattle. The photographer gave up but his constitutional right to go to federal court in public for free to vindicate his rights because he took some boilerplate that had been written by an attorney proposed by a trade organization, a standard terms and conditions no one should ever have an arbitration clause in their contract if they're not a multi billion dollar company who has pr issues to give up your right to go to court over and vindicate your rights for the right to pay somebody for hundred dollars an hour to pretend to be the judge is not anything that anybody should ever do who might have a conflict with anyone bigger than them so I would recommend that you you know non don't put alone necessarily and not to be careful about the choice of counsel but the terms and conditions that you use are important and it was not something I would cut and paste off the internet because if you cut and paste it from the wrong place it could have a real ramifications down alive okay well this was really incredible information thank you so so very much and again the your email if anybody has any questions or any serious copyright issues they either can go to the website and that's an m I p law dot com or dan at an m I p law dot com and thank you so very much this was a real treat to have you here thanks for having me thank you all right and what you also will see in the workbook we have another law firm which is lane powell from seattle who has very, very generously given us this incredible overview off all the legal forms with all the you know knots and belts and whistles as to what is what's on the page is forty nine through fifty hard on fifty two in the workbook and it talks about l l pllc as corpse e corp and all the good stuff so if you have any questions we have a lot of this in the workbook dan dan nelson uh is one off the premium premium attorneys when it comes to copyright law in the united states and across I want to say almost the world now he's won some very serious very important landmark cases that have to do with copyright protection so I do definitely recommend you guys to follow him and to look him up a little bit and follow these these types of things we're nearing the end of this segment I mean see even something as exciting is law and finances goats by really quickly um some of the other things that are required for legal are you know you have to do your v yearly filings there's usually a minimum minimum tax you have to in the united states when you are corporation there's a secretary ofthe state filing that you have to renew every year which is the right to whatever have the corporation was like twenty five dollars and um there's terms and conditions purchase orders we talked about contracts copyright dan talked about a little bit terms terms and conditions and there's nothing that which I call a mutually beneficial agreement or also known as a contract so the way I feel about contract is very straightforward if you and I agree verbally to the way we do business cannot can we not put this in writing should or should we not put this in writing a month and the reason is because we want to manage expectations so I usually try to stay away from contract shal terms that say in perpetuity throughout the universe media not yet invented and this came in because ah lot of the contracts you know, back in the days when I first started in the magazine world there was no there were no digital rights I mean all we did on the computers as shocking I know we're just write letters and then print them out and fax them to people that was to the extend of off digital rights and you know, they're changed rather rapidly so you know, the company said, well, you know we're going to do this really easy we're going to deal with rights that are not even yet invented I think that's not since and that's how I negotiate with everybody it's like we can agree and I'll give you what you want but you have to know what it is that you want I mean that's kind of a requirement to do business because if you say, well, I want you to give me something and then I'm going to give you something in return but I'm not really going to tell you what that isthe is a bad baited a bad way to do business so I say when you say throughout the universe are you going to put up billboards on mars because if you want to I'll be happy to put that in there well if you do a direct mail campaign on jupiter you know do by all means tell me because I'll be happy to you know put that in there but unless you do that we're not putting that in there because it makes no sense right? And by the time you probably need new imagery or no consulting agreement or you know, new diet or new piece of jewelry to look good so beat clear about what it is and if you do a guarantee be specific about what their return policy is what we're going to do if somebody doesn't like your stuff but if somebody's comes and says the program you did you deliver to me isn't working so if somebody comes and says well, you know here you are you talk about business building and I followed the twelve steps ah step by step and I learned nothing yeah try me but you know it is possible that some people just don't like you so what's your return policy how do you handle that and you want to do it in such a way that you think about this ahead of time so when something happens you have a policy to fall back on as our policy clearly states that is posted online, you have x amount of days to review the material and then, uh, ask for a you know, either a refund or redo, or we will refund you. We will, we will hold a restocking fee and you get x amount or you have to return it to us. But you have to pay the shipping will be happy to ship it to you, but the shipping is on you because, you know, and we take it back because if you changed your mind and we take it back if it didn't fit, we exchange it, if it so what? You know, remember the what next scenario we talked about? So this is the what if something goes wrong scenario? What if somebody doesn't like you? What if they hate your product? What if they dislike you? What if they threaten to sue you? We in america happens all the time people like, well, so you go ahead, it's very expensive, it's not that easy to sue people. I mean, it comes a huge, huge, huge, huge price. Um, you know, is it worth it for you? Even though if you're right and they're wrong, is it worth it for you too? Spend time, energy and money versus just for funding this person the thousand dollar package or whatever that sort of other thing is right. So you have to and I want you to think about this before this happens. So when it does happen, you step back from the entity remember our entity and we look at the entity and we go like what's the best thing for the business not even our feelings are hurt and we angry and disappointed and mistreated but what's best for the business. So that's, how I want to think about do you have any questions on that wee dio beyond? We have a question coming in about memos of understanding, which is a very simple written agreement. Do you use that or die and that I actually prefer proposals and, uh, deal memos have fine as long as it is clear what it isthe when you going to deliver it, how you going to deliver it? What's included? And who is doing it so there's? Ah, very specific way you know you want you want to cover, you want to cover that. So I prefer for me. I literally write proposals and what I do because it trains my mind in case you haven't figured it out, I suffer from entrepreneurial a d d I have too many ideas, so for me at deal memo or proposal is a great way for me to focus so I said I have a format and my format goes, what are the three things? What are the objectives that I want to achieve for my client? The objective number one is to help them build a business model that works for them objective number two was the most important to identify revenue streams that people that take this course can go and immediately start take money and make money number three is to create a comfort level with everything relating to business. Those are my three objectives then I go into how I'm going to do this and I literally write down where you're going to sit down we're going to go through the twelve steps we're going to fill out the worksheets we're going to, you know, workshop a little bit we're going to take relevant example going to bring other people in so that in my head I already think about how the whole process is going to our comic gonna deliver and so when I take that to the client, then he sees what I see and then when we actually do it then you know then they understand oh it's a program it's an online broke I'm going there, I'm going to have to do twelve steps and then this guy be workshopping I might be sitting in the hot seats king hotsy, you were so brave, I was so proud of you. You like, can I get off? No, I appreciate that very much that you stuck with it. And so that's, really the part. As long as you're clear about what it is, if it's something that's like, well, I'm going to deliver something that's yet to be determined at that time that we don't know yet that somebody's going to execute that we haven't identified yet. That's bad. So specifics are really good, and I'm going to close this segment with a quote from john quincy adams. If your actions inspire others to dream more, learn more, do more and become mohr. You are a leader.

Class Materials

bonus material

Beate Chelette Workbook
My Creative Business Plan
Fix Your Life Workbook

Ratings and Reviews


HI BEATE! I love your German straight forwardness being German myself. ....watching your creativelive course i had to almost laugh when u talked about the job test when u where still in school. i had exactly the same experience. i wanted to become an artist, goldsmith, or photographer. same reaction of the woman of the "arbeitsamt" with the same great idea to offer me apprenticeship to become a secretary in a dusty office. %) not really ME! i would love to see you to accept my invitation on linked in because I love your kind of teaching ... very direct - down to the point, without loosing time! i respect your work and i am very glad that creativelive found you to share your knowledge with creative people who are very good in their creative area but maybe not so much on the business side. YOUR COURSE IS AMAZING! congratulations and a big "THANK YOU!" KRIS P.S. BOUGHT THE COURSE !)

a Creativelive Student

They must have not had the review feature up yet when this course originally broadcast, because no other way I could be the first person inspired to leave a review. This is simply the best actual business building course I've come across in a long time. It teaches you how to build a business, not just market one. Every other course I come across that presents itself as "business" or "entrepreneur" this or that is really just a marketing course for small businesses. Now don't get me wrong, marketing is certainly key if you want to be successful, but there is a lot more to successfully running a business than marketing. Lipstick on a pig, comes to mind. This is a course that will teach you how to become a successful entrepreneur, with part of the final day focused on marketing, which is the right balance given the responsibilities and requirements of a true business venture. So much out there is really just teaching people how to market themselves as if they were an employee without any company around them.

Chad Robertson

As an analytical person with creative spirit this was the perfect class for me. Beate has the passion of an artist coupled with a sharp, almost engineering intellect. I sometimes find with courses, online or not, that topics discussed do not apply to my journey. Not the case here. Everything was useful and the course materials provided invaluable. Highly recommended.

Student Work