THIS IS THE ULTIMATE BUSINESS BUILDING LEGAL CHECKLIST TO HELP

ENTREPRENEURS PROTECT THEIR BUSINESS ONLINE.

GET THIS STUFF DONE NOW, WHILE YOU ARE STILL STARTING OUT, SO THAT
YOU CAN FOCUS YOUR ATTENTION ON BUILDING YOUR BUSINESS AND
CREATING MORE VALUE FOR YOUR CLIENTS AND CUSTOMERS AS YOU GROW.

Don’t get overwhelmed. Breathe a second. I know this is a huge legal checklist. I couldn’t call it
the “Ultimate” Business Building Legal Checklist if it was only a single page, could I?

I recommend you work through one section at a time. And if you ever have questions, or would
like some assistance with anything referenced in this document, just feel free to contact us and
we can set you up with a free strategy session with an attorney.

First things First (i.e. Preliminary Matters)

The first thing you need to do, before you even start talking about setting up an LLC or building
a website, is to decide what your business is all about.

Take an afternoon, find a whiteboard, and brainstorm some ideas. Get creative with the
process. Settle on several product ideas. What do you enjoy? What are you good at? What
services would you like to provide?

Make a decision about what you intend to sell online.

Make sure there is a starving audience that is prepared to buy what you have to sell.
There are whole courses dedicated to finding this audience. If you don’t already have a
legitimate business idea, you should find an expert or course to invest in. It will be money
well spent.

If you have already figured this out, you can move on to the next step of the process, naming
your brand.

This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law

 What’s In a Name?
Honestly? Everything. This is one of the most important steps you will take in starting
your business. We’ve written extensively about this on our blog at hawthornlaw.net. Please
don’t overlook this VERY IMPORTANT step of the process.

So here’s what you need to do to properly name your business.

Review this blog post and this video on how to properly name your business.

Review this video on the 5 main mistakes people make when naming their business.

Do a proper trademark search to make sure that the names you have chosen don’t violate
anyone else’s intellectual property. Here is a resource on how to do this.

Run an internet search on all the major search engines to make sure that a competitor
hasn’t already taken your name. Search Google, Yahoo! and Bing, and make sure to check
for variations in your business names.

Run a search on a domain name database to see if your domain name is available. We
recommend doing the search on https://instantdomainsearch.com/ and doing a secondary
search on http://www.namecheap.com.

Check to make sure the social media profiles for your name are available, including Twitter,
Facebook, Instagram, YouTube and Pinterest.

Assuming you haven’t found any problems so far, run a search on the US Patent and
Trademark Database for your proposed business name to insure that nobody else has
registered the business name first.

Finally, head over to the Secretary of State’s Website in your state and make sure the
name is still available.

Still feeling good about the name you chose? Good. Pick one and let’s move on to the next
step.

This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law

 Getting Down to Business
Now that you have settled on a name, it’s time to make your business legally legit. By that, we
mean to pick a business entity, file some paperwork with the state where you do business, get
a tax ID number, etc. Here’s a quick rundown of everything you need to do:

DO THIS FIRST IF YOU HAVE PARTNERS: Get an agreement in place that discusses all
the in’s and out’s of your business. What will happen if things go south? What if one of you
has to go through a divorce or dies? How will you divide up the profits of the business? Will
the company retain the earnings or will you distribute them? What about salaries? It’s better
to get all this in writing NOW, while things are still new and exciting, than to try and figure it
out later. (FYI, we recommend you get a lawyer for this part, even if you decide to
handle everything else yourself. The legal fees will more than pay for themselves if
things do go south).

Settle on an appropriate business entity. This will depend in large part on the type of
business you have, whether you have partners, whether you will be seeking outside
funding, etc. Here are your options: Sole Proprietorship, Limited Liability Company (LLC),
Partnership, S-Corp or C-Corp.

If you need help with this step, we have a DIY website that can take care of everything for
you.

If you need some extra hand-holding, you can have us do it all for you by clicking here.

If you are on a budget, here is a cheaper company we recommend. (affiliate link)

If you aren’t scared off and would like to do all this on your own, here are the steps:

File your corporate paperwork (Articles of Incorporation or Articles of Organization) with the
Secretary of State’s office in the state where the business will operate in.

Apply for an Employment Identification Number (EIN) with the Internal Revenue Service.
You can do this online here.

Take the file stamped Articles you filed with the State and your EIN letter from the IRS to
your favorite bank and open up a business checking and savings account. INSIDER’S TIP:
Push hard for free checking, the bank wants your business.

If you have decided that you would like to be taxed as an S-Corp, make sure to File Form
2253 with the IRS within 75 days of opening up shop. You can file this paperwork

This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law

 regardless of whether you are an LLC or a corporation. Your lawyer or accountant can walk
you through this process if it seems tricky to you.

If you didn’t take care of this when you prepared your the agreement discussed above,
make sure to prepare an operating agreement and/or bylaws as required by your state. Get
a lawyer to help you with this if you have any questions at all.

Purchase a general liability insurance policy for your business, and workers’ compensation
insurance if required in your state.

File a trade name or DBA with the secretary of state where you live as appropriate

Determine whether your business will need to collect sales tax, and if so, in which states. If
you are selling physical products on Amazon or via an e-commerce platform such as
Shopify, consider a vendor such as TaxJar (affiliate link) that can handle this for you.

Prepare a corporate file. You can either do this old school with a three ring binder and tabs,
or create an electronic file. Preferably, you will have one of each with the electronic copy
serving as a backup. In this file you will place everything related to the business, including:
Articles of Organization/Incorporation, Tax ID letter from the IRS, Bank Account information,
Sales Tax Information, Shareholder agreements, internal contracts, passwords to online
accounts, etc. We recommend either Evernote or Dropbox for this.

Read Profit First by Mike Michalowicz (Amazon Affiliate Link) and set up the corresponding
accounts for your business

Meet with and hire an accountant to get your taxes in order, including setting up quarterly
tax payments if necessary. Provide them with an electronic copy of the corporate file you
prepared

Calendar due dates for annual reports (late fees for these can be HEFTY) and annual
meetings, if necessary for your entity (this is helpful to protect your corporate veil) - If you
sign up with our service, we have an Annual Reporting Subscription that will handle all of
this for you!

Make sure to document major acquisitions of either property or equipment. Provide this
information to your accountant to maximize your end-of-year deductions.

Create a log of all major corporate activities and keep it in the corporate file. This includes
major purchases, and/or investments, new hires of both employees and independent
contractors, and major purchases of inventory.

This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law

 You’re Going to Need a License for That…

Many, but not all, state and local jurisdictions in the United States require that you obtain a
business license to lawfully operate a business. Now’s the time to do that…

Research the laws and rules in your local jurisdiction for your type of business. Rules vary
by jurisdiction, but at a minimum you will want to visit your state, county and city websites
to research what will be required of you.

File the requisite forms and pay the license fees to obtain a valid business permit/license in
your jurisdiction.

Time to Protect Your Intellectual Property

You’ve probably been wondering why in the world we are called “Hawthorn Law”. Dating back
to the middle ages the Hawthorn Tree, (a dense, thorny shrub and member of the rose family),
was planted along hedge-rows to protect property from trespassers.

At Hawthorn Law, we pride ourselves in protecting the intellectual property of online

businesses from would-be thieves and trespassers.

So now it’s time to plant your own Hawthorn Tree, and start thinking about how you can protect
your own intellectual property.

Conduct a systematic review of the intellectual properties owned or potentially owned by

your business, used or acquired so you can start to evaluate what IP needs to be
protected. This is also known as an “IP Audit”.

Begin the process of registering your trademarks with the US Patent & Trademark Office.
This includes the name of your business, your brand or dba name, your logo, the names of
any of your major products or services, and any other proprietary names and elements
related to your online business.

We are available to register your trademarks for you if you need assistance. Feel free to
schedule a consult and let us know you are interested in registering a trademark.

This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law

 If you have e-books, infographics, course content, a blog, and other original creative works,
you should register the copyright to these with the US Copyright Office.

If you have invented or designed a physical product that has unique design elements or
otherwise requires protection, you should apply for protection with the US Patent &
Trademark Office. We are not able to assist with filing patents at this time.

Put in place a system to monitor your intellectual property for possible infringement. We
recommend Google Alerts to monitor your brands and trademarks, as well as your
company and personal names.

Limit who in your company has access to your “trade secrets”.

How to Handle Your Web Properties

One of the frequently overlooked ares of your business is your website. Considering it is one of
your largest assets, it’s vitally important that you include several specific pages on your site.
Here is a list of the various policies and notices that we recommend:

Privacy Policy. This tells people that visit your site what information you collect from them,
and how it is used.

Terms and Conditions. This is a contract between your business and the visitors to your
website. This is extremely important, especially if you are giving any type of general advice
on your website (which most people do).

Legal Disclaimers. You need to clarify for your visitors how the information they will obtain
from your site can and cannot be used.

DMCA Policy. This is a notice to anyone that may claim you are infringing on their
copyright, as well as instructions on what they must provide to you or your agent for you to
take down the infringing information.

All of these templates are also available via our flagship course, the Online Business
(legal) Toolkit. More information can be found by clicking here.

This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law

 Other Best Practices for the Interwebs…

Insure that you have reviewed and complied with all Anti-Spam (i.e. the Can-Spam Act)
laws for email marketing. (Most providers do this anyway).

Review and comply with all FTC Requirements for your advertising

Make sure you are in compliance with GDPR and CCPA

Insure that you own the proper rights and licenses for all intellectual property (content,
graphics, pictures, etc.) that you or your team have not personally created

Safeguard all information collected from visitors to your site. Financial information (i.e.
credit cards) is especially important, but you need to also protect email addresses and
other personal information.

There are special laws specific to how you may use testimonials - make sure to follow
them.

If your site is used to offer services related to “making money” or for people younger than
18, there are special laws and regulations that you will need to follow.

Legal Relationships with Clients, Employees, Vendors,

and Independent Contractors

This section is all about contracts. You want to make sure you have all yours in order. Here’s a
checklist of the different issues that frequently arise:

If you are offering professional services, you must have a rock-solid engagement letter or
client services contract. Make sure that EVERY client has a signed contract outlining what
you will and will NOT do for them.

If you use independent contractors or freelancers (click here for more information on the
difference between an independent contractor and an employee), make sure that you have
an independent contractor or work for hire agreement in place. Not only will this outline the
duties of the contractor, but it will also make sure that you own the intellectual property they
produce.
This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law

 Get a valid Independent Contractor Agreement in place.

Do you have partners? You must have a valid shareholder’s agreement or partnership
agreement in place. Other corporate documents you might need include stock purchase
agreements, convertible notes, annual meeting forms, etc.

Make sure to have a lawyer review any lease for office space should you decide to rent out
a physical location. (Insider’s tip: You may not be able to negotiate the substance/
language of the agreement, but the terms are frequently negotiable).

Make sure that all your agreements have an alternative dispute resolution clause in them.
Mediating or arbitrating a dispute is much easier (and less expensive) than duking it out in
court.

Have an agreement in place for every other possible scenario, especially where money is
changing hands (i.e. speaking gigs, licensing agreements, affiliate agreements,
manufacturing agreements, publishing agreements, purchase agreements, vendor
agreements, etc.)

Last but not least, Running the Business…

Ok, we’ve covered just about every type of situation that could arise in the formation of your
business so far. Now we need to cover what you need to run your business efficiently with your
employees.

Everyone that works for you must sign a contract that outlines their rights and
responsibilities, how they get paid, and what happens to the IP they produce while working
for you. This includes employees, independent contractors, and interns.

Have all employees sign a digital use and social media policy for your company.

Make sure to have all workers fill out a Form I-9 or Form W-4 as appropriate.

Take an hour or so and head over to the Department of Labor website. Familiarize yourself
with their rules and regulations.

This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law

 If required, pick up a State/Federal Labor Law Poster (affiliate) to hang up in your break
room. Don’t worry, this will make you feel official.

Sign up for a payroll service (affiliate) for payroll, or consider hiring a bookkeeper to handle
this.

Get a state payroll number if necessary in your location. (Our recommended service
provider (affiliate) will help you with this).

Get all necessary insurance. This includes a general liability policy, Worker’s
Compensation, Disability, and health insurance where required by the Affordable Care Act.

Begin the process of putting together a systems manual and employee handbook for your
employees. Enlist the assistance of your employees in putting this together.

Systematize (affiliate), as must as you can, the way your company works. If you want to sell
someday, this will be a huge asset for your business. We recommend process.st and use
this service in our business.

Create an employee file for everyone that works for you. Systematize what information
goes into this file (i.e. employment contracts, tax forms, performance records, warnings,
resume and hiring paperwork, etc.)

Lastly, make sure to check out our

Online Business (legal) Toolkit. This is
our flagship legal course that will help
you with everything you need to get your
business legally protected, at a fraction
of the cost of hiring a pricey law firm.
Click here to learn more.
This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law

This Checklist is a resource for educational and informational purposes only. It should not take the place of hiring a lawyer.
Using this checklist does not create an attorney-client relationship between you and Hawthorn Law or its attorneys.
Customized legal advice is not provided within this resource. Instead, this checklist is a resource designed to make you aware
of the key legal needs of your business and provide tools that you can use to meet those needs. Your use of this resource is
subject to our terms and conditions, which you can review by clicking here.

To learn more about our Online Business (legal) Toolkit, click here.

Copyright © 2020 Hawthorn Law