legal Archives - The Freelancer Head Start https://freelancerheadstart.com/tag/legal/ Getting a head start with the right technology, advice, and tools for the freelancer and entrepreneur! Fri, 06 Jul 2018 09:25:58 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://i0.wp.com/freelancerheadstart.com/wp-content/uploads/2017/10/cropped-FHS_Logo_icon.png?fit=32%2C32&ssl=1 legal Archives - The Freelancer Head Start https://freelancerheadstart.com/tag/legal/ 32 32 136994759 FHS 29 Contracts! https://freelancerheadstart.com/fhs-29-contracts/ https://freelancerheadstart.com/fhs-29-contracts/#respond Fri, 06 Jul 2018 09:25:58 +0000 http://freelancerheadstart.com/?p=698 Some people shy away from the word "contracts" because a lot of time it triggers that feeling of "being sued". A contract, by definition, is a promise or set of promises that are legally enforceable and, if violated, allow the injured party access to legal remedies. In short, its an agreement between two or more people. 

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What is a Contract and Do You Need One?

Some people shy away from the word “contract” because a lot of time it triggers that feeling of “being sued”. A contract, by definition, is a promise or set of promises that are legally enforceable and, if violated, allow the injured party access to legal remedies. In short, its an agreement between two or more people.

My favorite tool to use for creating, managing, and signing contracts is Hello Bonsai. Its an online portal that allows you to quickly and easily create and send a contract. Hello Bonsai also keeps track of when that contract was read and signed. Pretty handy when you’ve got a lot of moving parts in your project.

If you’ve ever done work for hire, the answer to ‘do I need a contract (an agreement)’ is YES! You should never do work for money unless there is something written down and agreed upon. Even if the work being done if for a friend or family member. Especially if its a family member.

A contract is NOT a piece of paper that you can bully people into doing something against reason or their will. Its a way for both sides of the table to have an understanding of what was agreed upon. We want to make clear our understandings with each other. Whether you call it an agreement, a contract, or bargain, both sides of the contract need to agree to the contract terms.

Contracts are tools used to help both sides understand the expectations from everyone when it comes to work being done.

When creating a contract you’re going to have at least 4 main parts to a contract:

  • ID the Players
  • Scope of Work
  • Payment
  • Schedule of Work

As always, please consult with a lawyer for your specific needs and verbiage for your contract.

If you want a copy of a Contract Template, click here!

4 Minimum Parts

ID the Players

You want to know what is a part of the contract for both sides. Who is doing the work and who is receiving the work. The first section of the contract should identify this and spell it out in a way that makes sense for everyone. You need to have it outlined as to who you are dealing with as well as who the customer is dealing with.

The contract needs to specify who you are actually doing work for, who is the point of contact, and what everyone’s roles are. Your goal is to remove guess work and assumptions.

An example would be

I am a freelancer in the United States in Georgia. I work through MowenWorks, an LLC, as a consultant. My client is XYX, INC, represented by Sean Smith.

Your definition of who the different players are and how they are being represented my change depending on your type of work. You will still be outlining who you are doing work for and who has authority and final say of your work.

Scope

The scope of the work should also be defined within your contract. It spells out WHAT you are actually going to be doing for your client. Where does this definition come from? Well, it should come from your Roadmapping Session (FHS Episode 22) that you did earlier in the project.

The scope will include not only what you will be doing with the project but what you will NOT be doing with the project. This can and should include things such as

  • Hours of operations
  • Deliverables
  • Client deliverables
  • Disabilities
  • Your limitiations

In this section, you should also discuss what the agreed upon outcomes will be for the project. We need to spell out what they are hiring you to do and what the client will be, possibly, doing as well to help reach that goal.

You will spell out what is defined as “DONE” with the project so everyone can agree upon and have and understanding. You wont know if the project is done unless you actually define done. Never ending projects are no-fun…

If you want a copy of a Contract Template, click here!

Payment

Payment agreement is pretty important to…get paid… So we have to talk about expected costs and payment schedule up front. The payment section will outline the total cost and any milestones that will be needed to complete the project.

For example,

The Client will pay the Contractor in milestones totaling $1,100.00 (USD). The milestones will be invoiced as follows:

  • $550.00 (USD) on March 15, 2018

  • $275.00 (USD) on April 1, 2018

  • $275.00 (USD) on April 22, 2018

 

Make sure to include that you will need to take a deposit before work will begin. This is important as it signals the start of the actual project. Another tactic that you should use is to require the last payment be made at the agreed upon end date of the project.

Since you’ve defined what “DONE” is within the project, you’ll also define WHEN “DONE” is going to happen. Your last payment should fall upon this date or before (when the project is done).

Include verbiage into the contract that allows for penalties and fees if certain payments are missed, late, or the project is cancelled prematurely. This helps solidify the financial commitment for both side to work on the project until completion.

Schedule

How long is the project expected to take? We need to have an agreed upon end time and milestones for the project. The Schedule section talks about time frames, deliverable, and end dates. Don’t shy away from making this section as specific as you need to be. A lot of times, the project can have scope creep and the schedule section will help rein in on what is to be delivered.

Here is an example statement for the Schedule:

The Contractor will begin work on March 15, 2017 and will continue until the work is completed. This Contract can be ended by either Client or Contractor at any time, pursuant to the terms of Section 6, Term and Termination.

The milestones of what will be done is included in the Schedule section. You need to specify what is going to be completed and when. This also includes payment milestones for the work done.

Additional Sections

These four mane section described above are not always the end of a contract. There are usually additional sections that you’ll want to include with the contract. Here are a few of them

  • Ownership and Licenses
    • Who owns what and how can they be used
  • Competitive Engagements
    • You agree to not work for a competitor while the work is being done
  • Non-Solicitation
    • You wont take the clients customers from them while working on the contract
  • Representations
    • Defines the roles of the people on the contract
  • Confidential Information
    • Information and work is confidential
  • Limitation of Liability
    • No one is liable for breach-of-contract damages that are reasonably unforeseen

If you want a copy of a Contract Template, click here!

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]]> https://freelancerheadstart.com/fhs-29-contracts/feed/ 0 698 FHS 4: Why and How to Register Yourself https://freelancerheadstart.com/why-and-how-to-register-yourself/ https://freelancerheadstart.com/why-and-how-to-register-yourself/#respond Fri, 10 Nov 2017 00:00:24 +0000 http://freelancerheadstart.com/?p=33 Your business is how you’re going to be making your income. You’re going to want to protect your business, product/services, and yourself. Why and how to register yourself can be a long winded answer, but to summarize: registering your business will ensure personal liability protection, legal benefits, and tax benefits.

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Once you’ve identified your customers and audience, you can then focus on registering yourself. This episode will be talking about registering in the United States. Why and how to register yourself can seem daunting, but with a little patience, you’ll come out alright. Registering yourself is the act of telling the world who you legally are. Then you will have a barrier between your personal stuff (like money, car, and home) and your business stuff.  

You can name your business almost anything you want but you’re going to pick something that is in-line with what you are doing and your market. Work on a name for you business that mixes creativity and the market research you just performed. Right now, we’re not going to focus on if it’s already been used. You want to just have a brain dump of possible business names.

When you have a few names that you want to use, sleep on it. See how you feel the next day. You’ll possibly eliminate a few names when you get a rested brain looking at them. Now we need to pick how and what you are going to register.

There are four different ways to register your business

  1. Entity Name protects you on a state level
  2. Trademark protects you at a federal
  3. Doing Business As (DBA) is a “What are you going as…” type of thing. No legal protection but sometimes required based on state
  4. Domain name for websites

We are going to focus on  the Business Structure and your Entity Name. Once you’ve honed in on a single name, it’s time to work on your Business Structure. A business structure is a framework for your business that can dictate how it operates, spends money, pays taxes, and how it’s protected. They vary on what your goals are for the business, how much risk you are comfortable with, and what tax benefits you are after. Most people choose either LLC or S-Corp.

PAUSE. At this point, I want you to seriously consider hiring a tax professional to talk to and get their stamp of approval. They will be able to help guide you through the different choices with a business structure and how it pertains to taxes within your specific state. You will need to already have an understanding where you want you business to physically operate and what your long-term goals are for your business. RESUME.

 

LLC vs S-Corp Business Structure

LLC

In a nutshell, an LLC separates your personal assets from your business assets. This is good in case your LLC faces a lawsuit or bankruptcy. You have what is called a ‘Corporate Veil’ separating your personal things from your business things. This includes bank accounts, physical items, and other assets. Don’t you DARE mix these two. You’ll screw yourself over in the long run.

There are also tax benefits, profit/loss benefits, and legal benefits that may be attractive to you. When it comes to taxes, your profits and losses are passed through the business and attached to your personal income. This can be good because you’re not taxed twice; you don’t have to pay corporation tax. The downside though is that you are considered ‘self-employed’ and will need to pay taxes towards Medicare and Social Security.

If you have more than one member (owner) of the entity, you’re automatically labeled as a partnership for tax purposes. There are no maximum level of members for an LLC while an S-Corp is capped at 100.

Most people can take care of this themselves as it’s not too difficult. Most states have a single page form that you can fill out to take care of this. You’ll have to register with your specific state for your LLC….for every state you want to operate in…. This should run you between $100 – $175 per state on average if you do this yourself.  

You will have to renew this registration yearly to ensure you are still valid. Expect to pay a smaller renewal fee.

 

S-Corp

An S-Corp is a special type of Corporation that has a whole different range of tax benefits, profit/loss structure, and legal standings. Similar to a LLC, an S-Corp has defined lines of liability protection. Unlike an LLC, you can have Shareholder, directors, officers, and employees. You can attract investors through the sales of stock in your S-Corp. The person who purchases a stock in your company is called a shareholder and is therefore a part owner. You can have a maximum of 100 shareholders and they all need to be US citizens.

With taxes, you are also protected from the double-taxation with a traditional Corporation. You will be filing your taxes once a year once created. After the owner passes away or moves on, the S-Corp still will continue to exist perpetually. There are no maximum level of members for an LLC while an S-Corp is capped at 100.

For an S-Corp route, I would strongly suggest consulting with your accountant to ensure you set this up with in line with your business goals. There are a lot of things to consider with setting up an S-Corp that would take up an entire article. On average, expect to pay about $100-150 depending on your state if you decide to register an S-Corp yourself.

 

It doesn’t matter what you choose, your own state has different registration requirements that will be slightly different from others. Please verify with your Secretary of State’s website to make sure you fall within the guidelines.

Now you’re ready to register!

Click Here to Get Started to Register

Check for a Domain Name

Before you officially register with your state, let take a look to see if your business name is available as a website. Quickly put in your business name into a search engine and see if a website exists. If you’ve found that both the Domain Name and Entity Name are available, go ahead and register! We’ll talk about how to grab that domain name and create a website in the upcoming episodes/article.

 

Register with your State

Open up a web browser and navigate to your Secretary of State website. Navigate to the corporation filings section to complete an online registration form. During registration, you will be notified if your name is already taken. At  the same time, check to see if the website domain for you business is already taken THEN check your state’s Entity names. If you’ve found that both the Domain Name and Entity Name are available, go ahead and register!

Congrats! You’ve just made yourself legal. You should get a confirmation email with your official Entity registration information for your state. Let’s talk about getting your finances lined up to start taking in payments the right way.

 

Secretary of State Websites

  1. Alabama Secretary of State, 334-242-7200
  2. Alaska Secretary of State, 907-465-2530
  3. Arizona Secretary of State, 602-542-3230
  4. Arkansas Secretary of State, 501-682-1010
  5. California Secretary of State, 916-653-3795
  6. Colorado Secretary of State, 303-894-2251
  7. Connecticut Secretary of State, 203-566-3216
  8. Delaware Secretary of State, 302-739-4111
  9. District of Columbia Secretary of State, 202-727-7278
  10. Florida Secretary of State, 904-488-9000
  11. Georgia Secretary of State, 404-656-2817
  12. Guam Government Site
  13. Hawaii Secretary of State, 808-586-2727
  14. Idaho Secretary of State, 208-334-2300
  15. Illinois Secretary of State, 217-782-7880
  16. Indiana Secretary of State, 317-232-6576
  17. Iowa Secretary of State, 515-281-5204
  18. Kansas Secretary of State, 913-296-2236
  19. Kentucky Secretary of State, 502-564-2848
  20. Louisiana Secretary of State, 504-925-4704
  21. Maine Secretary of State, 207-287-3676
  22. Maryland Secretary of State, 410-225-1330
  23.  Massachusetts Secretary of State, 617-727-9640
  24. Michigan Secretary of State, 517-334-6206
  25. Minnesota Secretary of State, 612-296-2803
  26. Mississippi Secretary of State, 601-359-1333
  27. Missouri Secretary of State, 314-751-1310
  28. Montana Secretary of State, 406-444-3665
  29. Nebraska Secretary of State, 402-471-4079
  30. Nevada Secretary of State, 702-687-5203
  31. New Hampshire Secretary of State, 603-271-3242
  32. New Jersey Secretary of State, 609-530-6400
  33. New Mexico Secretary of State, 505-827-4508
  34. New York Secretary of State, 518-474-4752
  35. North Carolina Secretary of State, 919-733-4201
  36. North Dakota Secretary of State, 701-328-4284
  37. Ohio Secretary of State, 614-466-3910
  38. Oklahoma Secretary of State, 405-521-3911
  39. Oregon Secretary of State, 503-986-2200
  40. Pennsylvania Secretary of State, 717-787-1057
  41. Puerto Rico Secretary of State, 787-722-2121
  42. Rhode Island Secretary of State, 401-277-2357
  43. South Carolina Secretary of State, 803-734-2158
  44. South Dakota Secretary of State, 605-773-4845
  45. Tennessee Secretary of State, 615-741-2286
  46. Texas Secretary of State, 512-463-5555
  47. Utah Secretary of State, 801-530-4849
  48. Vermont Secretary of State, 802-828-2386
  49.  Virgin Islands Secretary of State, 340-776-8515
  50. Virginia Secretary of State, 804-371-9141
  51. Washington Secretary of State, 360-725-0377
  52. West Virginia Secretary of State, 304-558-8000
  53. Wisconsin Secretary of State, 608-266-3590
  54. Wyoming Secretary of State, 307-777-7311

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