Hey, it’s Marie Forleo and you are watching MarieTV, the place to be to create a business
and life you love, and this is kinda like Q&A Tuesday. I’ll tell you what’s going
on. There’s a topic that hardly anybody talks about and it is so important. In fact,
it’s so important that if you don't get it handled, it’s the kind of thing that
can take you and your business out. What I’m talking about is how to protect yourself legally,
especially if you’re an artist, creator, or entrepreneur. Now, y’all know I am not
a lawyer and nor do I play one on MarieTV. However, I have brought an amazing attorney
in today who’s gonna help me out, and this woman is incredible. She’s one of our B-School
grads, she is so smart, and she’s someone that I turn to when I need legal advice and
council.
Jo-Na Williams’ story began 15 years ago as a background vocalist for independent artists
and it took a fortuitous turn when she was not credited or compensated for her work.
As a result, she’s committed her life to educating and protecting artists and entrepreneurs
through her work as a lawyer and business adviser through her companies: J. A. Williams
Law, The Artist Empowerment Firm and The Artist Empowerment Group. Her clients include Grammy
nominated musicians, award winning coaches, talk show hosts, international speakers, and
bestselling authors.
Jo-Na, thank you so much for being here.
Thank you so much, Marie. It’s so great to be here.
Well, I’ll tell you, I have wanted to cover this topic for a long time because we get
a lot of questions about it and I know it’s a very big subject area and, of course, we
could sit here for days, but we ain’t gonna do that. We’re gonna keep it focused today
about 3 main areas. Really, the most important areas that we need to get handled legally
if we want to move ahead and really have a strong legal foundation. So the first is choosing
the right business structure. What do we need to know, Jo-Na, about choosing the right business
structure? How do we make that decision?
Well, first of all, Marie, I’ll just tell you, there are lots of misconceptions about
this. Most people think that you should just jump and just register whatever, but the bottom
line is is that the most important thing that you need to know about having a business structure
is that it protects your personal assets from the debts and liabilities of your company.
So it’s basically putting a shield around you personally and allowing your company to
contract with your clients or provide services and things like that. So you really wanna
make sure that you pick the right one for you and you don't wanna just jump to an LLC.
That’s what most people do. They think, “Oh, business structure. Perfect. I’ll
just go register an LLC.” But that may not be the best option for you because it depends
on your tax situation. You may have kids, you may have other assets, your company might
want to grow to a different level. So you really should just talk to an accountant and
a lawyer to decide which one is best for you.
I love that. And just coming back to my own story, when I first started, I was terrified
to even talk to a lawyer because I felt like, “Oh, I can’t afford that.” So that’s
actually what I did was talk to my accountant and that was the best thing that I did because
exactly as you said, we went through my specific tax situation and he also asked me about where
do I see the company going and that’s how we made that decision. So I love that. So
for people watching, it doesn't have to cost that much money. Right? I know that that’s…
money is always the big thing. That was my big thing. Oh, I can’t afford it. So when
it comes to choosing your business structure, if you can’t necessarily afford to go to
a lawyer right now, an accountant is a good choice.
I think that’s… that is a really great option. If you decide that you can’t afford
to have a lawyer work with you, then, yes, talk to an accountant if you’re strapped
for cash and the most important entities that you… that give you the legal shield are
the C corp, the S corp and the LLC. So you wanna speak to your accountant and find out
specifically which one would actually work for you based on your tax situation. But I
wanna talk about a little bit about the misconception about it… a lawyer being a lot of money.
Yeah, absolutely. Because I know that’s what holds so many of us back from even thinking
that we can get all this stuff handled is I can’t afford it. So when do you have to
say to people if that’s their excuse?
Well, as you know in our industry, it’s often that people want to pay for solving
a problem versus prevention. Right? And, I mean, and that’s all of us. We all… when
the stuff hits the fan…
That's when we’re ready to pay. Of course. I mean, it happens… I didn't want my dog
to go pay for him to prevent him to get fleas, but once he got fleas I spent hundreds of
dollars to get rid of them and now, of course, I want to prevent them from ever happening
again. So same thing.
Yes. Absolutely. And so I like to liken it to if you have a car, for example. You wanna
pay for regular oil changes, tire rotations and things like that so that your engine doesn't
break down. So that’s gonna cost you a lot more money than if you were to just pay for
prevention, preventative care. Or if you go to the doctor, for example. Instead of going
when you’re getting sick, just going regularly and getting your checkups and making sure
that your health is ok. It’s the same thing with having a lawyer for your business because
your business is its own entity, so it needs to be taken care of, right? So it needs to
have that legal health. So you wanna make sure that you have a lawyer on your team,
kind of like a doctor for your business.
Yeah, no. I mean, that’s great. And that analogy because think about it, and I know
this, as the business gets bigger if you don't have the right legal foundation in place,
something happening legally can be fatal for your business.
Absolutely.
It can totally take you out.
And I’ve actually… I actually had a client come to me a long time ago and she… this
was the situation that happened with her. She didn't get the right advising about her
business structure and she ended up paying 50% of what she made that year in taxes and
it did shut down her business. So it was heartbreaking for me, but luckily we were able to take care
of it. But you don't wanna have something like that happening just because you weren't
able to talk to a lawyer or an accountant about the right business structure for you.
So it’s something that’s really important to your business to make sure you get that
handled.
Yeah. So what do we need to know about protecting our goods and services?
The thing that you need to know the most about this area is if you don't have something written
down, you’re creating a bunch of verbal agreements with people that have no terms.
So it’s really important that you have a service agreement. And the service agreement
is going to outline what you’re providing the person, what their obligated to pay, you
wanna make sure you have your return policy clearly outlined…
Yes.
...and for people who are in high risk type of professions, you wanna make sure that you
have some type of disclaimer because it’s just as important to know what you’re going
to be responsible for and what you do as a service provider and what you don't do. So,
for example, if you’re a health coach, you wanna make sure that you have some type of
agreement or some type of disclaimer in there that says, “Hey, I’m not a therapist,
I don't prescribe medication,” X, Y, Z. So these are the kind of things that you want.
But it’s really important that you talk to a lawyer about this part of it because
then they’ll be able to look at what are the areas that you are… that you are providing
services in and how they can prevent against the ones that you aren’t. So it’s really
important to make sure that you talk to an attorney about that part of it.
So do you have any idea like a ballpark figure of what someone could expect to pay to get
a service agreement and these kind of disclaimers in place?
I think it really just depends on the lawyer because some lawyers, they charge on an hourly
rate and some of them charge on a flat fee. What you wanna do is interview the ones that
you’re thinking about hiring and then ask them what their fees are and what’s associated
with it and then you can make your decision from there.
I love that. And I love this idea of interviewing several lawyers because I’ve worked with
many in my career and I wish I would’ve done more of that because you can really get
a good sense of how people interact and all that stuff, so perfect answer.
It’s a relationship. So you wanna make sure that if this person is gonna be the general
counsel in your business and gonna help you with developing your business and understanding
what you need as you grow, you wanna make sure you have the right person doing that,
so it’s important to interview.
Ok, so our final area today is about business relationships, and I think this is the one
that you are the most passionate about. So what do we need to do to handle ourselves
legally with our team or anyone that we’re doing business with?
Well, Marie, this is one of the areas that I absolutely love talking about because so
often it is missed in our industries, especially when you’re an online entrepreneur. You
are hiring VAs, you’re hiring different team members, and it’s so important to make
sure that all of your business and that your personal information is protected. So you’re
exposing them to passwords, client records, all kinds of credit cards.
Yes.
So it’s really important that you have some type of agreement in place that makes sure
that they are not gonna take that information and distribute it outside of your company.
So you need to have some type of independent contractor’s agreement and you need to make
sure that it has a nondisclosure in it. And that means that you come into my business
and you can’t take anything outside of my business when you leave.
Yes. Thank sweet heavens. I remember a little while ago when I first started getting all
of my NDAs in place, I breathed a sigh of relief because I felt terrified. There’s
a lot of sensitive information and a lot of projects and ideas and book things. And I
know it maybe not is the best thing in the world that I’m like, “Oh, God. What if
that gets out?” But it made me feel so much better and it always makes me feel so much
better.
It’s so true. And also when you’re an online entrepreneur, most of us don't have
the privilege of seeing our teams or bringing them… or flying them in. So you really need
to make sure that you have the right people in place and how you ensure that, take a preventative
measure, so to speak, is to make sure that you have something that they’re signing
that makes sure that they understand what it is that they’re going to be providing
you for services, how you’re going to terminate the contract in the event that they don't
work out, and all of these various different things like protecting your IP, for example.
So it’s really important to have that and the other thing, if you’re in the United
States, if you’re planning on paying someone over 600 dollars in a given year, you wanna
make sure that you get their W9 form as well because you’re gonna have to issue them
what they call a 1099 form at the end of the year so you can write that income off that
you paid them.
Right. And it’s really important that you do that because you want as much money as
you can get in your business and you wanna keep it. You don't wanna pay it to Uncle Sam.
Yes. You want to keep it all tight and right and above board.
Exactly. And obviously W9s, that’s appropriate for a contract based worker.
Absolutely. Absolutely. And also, what I always tell people to do is get the stuff right up
front. As soon as somebody comes to you and they want to work with you and you're like,
“Great, this is gonna be a great relationship, I wanna work with you,” first thing you
do is send them the independent contractor’s agreement and then send them a W9 to fill
out because if you… the relationship doesn't work out and you decide that you don't want
to hire or you don't want to use them anymore, you wanna fire them, it’s gonna be really
hard for you to get that form afterwards. So…
That’s like a pro tip.
Yes.
That’s a total pro tip. I love it. Get it up front.
Get it up front.
Jo-Na, thank you so much for being here today. This was fantastic.
Thank you so much Marie. It was so much fun.
So if you wanna learn more, everything is right down below. So Jo-Na and I have a challenge
for you today. If you don't have all your legal ducks in a row, what’s one step you
can take right now to start making that happen? Tell us about it in the comments underneath
the video.
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