Today we are talking about solidifying your business’s legal foundation and avoiding common legal landmines with Yasmine Salem Hamdan. Yasmine is the Founder & CEO of Coaches & Company. Her goal is to help entrepreneurs protect and secure their legal assets so that they can continue to scale their businesses on a firm legal foundation.

 

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Meet Yasmine

Yasmine Salem Hamdan is the Founder & CEO of Coachesandcompany.com, a leading source for business education & legal tools designed for modern-day entrepreneurs. Yasmine is also a business & brand protection attorney, mom to a 3-year-old toddler, business advisor, and entrepreneurship educator based in Dallas, TX.

 

The 3-Pillar Framework For Building A Legal Business Foundation

To begin, Yasmine starts by highlighting the importance of getting the legal foundations of your business started sooner rather than later. Having this legal framework in place allows your brands, ideas, and other skill sets to flourish at a quicker and smoother pace because you are able to eliminate last-minute administrative paperwork and avoid unforeseen legal setbacks. 

Building on this, she continues by saying that the majority of legal landmines can be avoided, or resolved easier and quicker if business owners take the time to be proactive rather than reactive about their legal liabilities. 

Yasmine emphasizes this point by stating the fact that anything can happen. And when something legal inevitably does threaten your business, choosing the ‘reactive’ route is always more expensive, more time-consuming, and more energetically consuming. She finishes by saying that your business and the hard work you have put into it are worthy of a solid legal foundation! 

This leads Yasmine to her 3-pillar legal framework. She states that having these 3 pillars ensures that your business is protected. The 3 pillars are 1) forming your business entity, 2) having an understanding of your intellectual property and protecting it appropriately and 3) having the right contracts in place.

 

Pillar #1 – Your Business Entity

Yasmine first focuses on pillar #1: Your Business Entity. The first step is always forming your entity. When you do so, you should have a solid understanding of where financial liability and tax accountability fall based on the type of entity you have chosen. 

She continues with an example, if you have a sole proprietorship, everything is one and the same: your business is you and you are your business. So all financial and tax liability falls directly to you, rather than your entity. 

On the other hand, if you have an LLC or Corporation, you and your business are two separate entities. This means, that financial and tax liability falls on your business entity rather on the business owner. Yasmine elaborates further by explaining that if something were to ever happen (client/team member is disgruntled, etc.), only the assets of the business (and not you as an individual) are at risk. 

Yasmine highlights this limited liability protection as one of the major benefits of creating a separate business entity. In addition, she says having that separate entity also provides legitimacy to your business.

Once you have created a separate business entity, Yasmine adds that the best thing you can do is to keep financial, legal, and tax records separate from your personal records. This provides additional legal security in the event that your business is ever at risk by ensuring the liability falls on your business and not yourself. 

Lastly, Yasmine notes that there is no legal responsibility to create an entity before you start doing business. However, the liability protection and legitimacy a business entity provides are beneficial for any scaling business. 

 

Pillar #2 – Your Intellectual Property

Yasmine then moves on to the second pillar: Intellectual Property. She starts off by saying that this is one of the legal landmines she often sees business owners encounter. 

Yasmine begins by defining intellectual property (IP) as assets that aren’t necessarily tangible; you can’t physically touch them. Intellectual property is intangible material that still holds value. For example, this material could be in a written, video, or audio format. 

Continuing, she addresses two major points when it comes to avoiding common legal landmines surrounding intellectual property:

First, she says you should not decide on a brand name before doing a trademark search. This is to ensure you are not infringing on anyone else by using the name, slogan,  tagline, etc. that you have selected. 

Yasmine gives an example by saying that she will often see business owners select a business name, slogan, tagline, etc., invest in branding, and create a website, only to run into an infringement issue and be forced to entirely rebrand after investing so much time, effort and money into building an audience.

She then gives one more warning on this subject: even if the trademark is not the same, it can still cause infringement issues based on the principle of ‘the likelihood of confusion’. Yasmine highlights this point using an example: if you opened a coffee shop named ‘Starbuckles’ (as opposed to ‘Starbucks’ coffee chop), then Starbucks would have the right to raise infringement issues because your company name and service are too similar.  If the name and products or services have enough similarities (even if they are not exactly the same), there can still be a trademark infringement issue. 

Yasmine summarises this point with the rule of thumb to always do a trademark infringement search before deciding on a name, slogan, tagline, etc., and investing in marketing materials!

The second legal landmine Yasmine often sees when it comes to intellectual property is the use of images or audio without permission from the copyright holder. This issue can also lead to lost investments if you have already spent time building your business around a specific photo or audio track.

Yasmine defines trademarks as the source identifiers of your business: the brand name, logo, slogan, etc. It’s the label on the packaging that identifies the source of whatever it is you’re selling. What’s inside the packaging are your copyright assets. These assets can be written, visual (photos/video/art), and audio content.

Her advice for avoiding this landmine is to always make sure you are either using assets that are available for reuse, or that you have permission from the copyright holder to use those assets! 

 

Pillar #3 – Your Contracts 

The final pillar is Contracts. Yasmine sums this pillar up simply: if you are in a business relationship (with a team member or client), then you always want to make sure that the terms of that relationship are outlined in a contract. 

Yasmine highlights that when there is no contract in place, everything is up for negotiation and liability. 

She explains this pillar using this scenario: imagine you are working with a client and don’t have a current client contract in place, but you agreed to provide X, Y, and Z, for X amount of dollars. 

Yasmine then follows up with these insightful questions: What happens if the client asks for additional services outside the original scope? What happens if their payment is late? What happens if they want to license the content that you’re creating for them?

Coming to an agreement on those terms early on allows you to confidently execute the project or service that you’re providing because you can confidently reference the contract as questions come up throughout the course of the relationship. 

In summary, building a legal foundation for your business, starting with these 3 pillars, allows entrepreneurs the security and protection that they need to bring their ideas to life, scale their business, and create effective professional relationships.

 

If you’re ready to start solidifying the legal foundation of your business, connect with Yasmine by checking out the links below!

 

LINKS MENTIONED

Download the Legally Launch Handbook

 

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