The online world can be a messy place for legal advice. I’m going to discuss some of the biggest and most dangerous legal myths I’ve seen, such as LLCs versus sole proprietorships, using free contracts when starting out, whether it’s true that the online world is a Wild West, and whether you really need an LLC or business insurance – or both.
In this episode, you’ll hear…
02:21 – The dangers of following anonymous online advice
05:20 – Know-it-all Facebook ad comments
07:50 – The myth of waiting
13:58 – LLCs vs. sole proprietorship
16:32 – Copy-pasting someone else’s contract
21:36 – The internet is not The Wild West
22:53 – The difference between LLCs and business insurance
Beware armchair legal experts
If I had a dollar for every piece of terrible legal advice I saw online, I’d be a kabillionaire. Most of that is coming from well-meaning folk (who also happen to not be lawyers) repeating the same myths that have caught on in the industry, creating a sort of feedback loop. This leads to two things: people following this advice and getting burned, or losing trust in the legal profession because of what they hear.
MYTH: “I’ll wait until my business is bigger to get legal protection.”
You don’t have to be working with clients to be sued – you can be sued just for the content you talk about. Many people hold off on their legal protection because they find it daunting, but the truth is you don’t have to do everything all at once. Focus on a holistic, well-rounded legal approach to protect your business from the very beginning, and scale that up as you go. Just don’t leave yourself completely vulnerable.
MYTH: “I don’t need an LLC, I can just use a sole proprietorship.”
LLCs are not that complicated. In some states, the registration fee can be higher or there’s a franchise tax, but in most states the registration fee difference between an LLC and a sole proprietorship is minimal. On top of that, people don’t really understand what benefit they’re paying for in an LLC. As a sole proprietor, there is no legal protection between you and your business – if your business gets sued, you get sued. That means you’re personally liable for whatever may happen in your business.
MYTH: “The internet is the Wild West of law”
People assume that because the internet is so new, there are no rules. That’s just not the case! Not only are there rules that directly apply to the online world of business, but if there aren’t rules directly related to what you do, the courts will still find rules that are close and find a way to apply them. It’s important that you’re doing the best you can be operating ethically and legally – even online.
Hopefully this busts some of the myths and bad legal advice you’ve heard that you weren’t sure about. It’s important to know who you are getting your legal advice from and that they know what they’re talking about.
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Resources Discussed in This Episode
- Top Legal Mistakes to Avoid for Online Businesses
- Top Legal Mistakes to Avoid for Online Business Guide
- Episode #2: “Scope of Practice for Coaches: What You’re Legally Allowed to Do”
- 7 Legal Myths Keeping You From Being Legally Legit
- Why Free Legal Contracts Wouldn’t Cut It for Kristen Zavo
If you’re ready to legally protect and grow your online business today, save your seat in my free workshop so you can learn how to take the simple legal steps to protect the business you’ve worked so hard to build. Click here to watch the free workshop so you can get legally legit right now!
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DISCLAIMER: Although Sam is an attorney she doesn’t practice law and can’t give you legal advice. All episodes of On Your Terms are educational and informational only. The information discussed here isn’t legal advice and isn’t intended to be. The info you hear here isn’t a substitute for seeking legal advice from your own attorney.
On Your Terms is a production of Crate Media.