Whether you like it or not, going into business means educating yourself about the legal requirements of your field and location. Knowing the ground rules helps protect you and your clients from misunderstandings, being sued, and breaking the law.
Along with the legal concerns that affect all businesses, creative businesses have some common considerations, ranging from copyrights, to contracts, and freelance workers (on both sides of the table!). These resources will help you make the right decisions for your Maryland-based business.
Disclaimer: These resources do not constitute legal advice; when in doubt, always consult an attorney regarding specific questions.
Business Entities and Licenses
When you start a new business, even if it’s just yourself, you’ll need to decide how you will be organized and identified as a company. This is your business structure — sometimes called your business entity — and it will determine how you will pay yourself, how you will protect yourself legally, how you will grow, and how you will do your taxes.
- An overview of business structures from the Small Business Administration
- More on registering and licensing your business from YouLaunchIt
If you’re hiring employees as part of your business, you’ll be subject to your state’s labor laws, as well as federal labor laws. These include guidelines and requirements about wages, insurance, workplace safety, and more.
- U.S. labor laws overview
- U.S. Small Business Administration guides to Employment and Labor Law, from a startup perspective and from a business management perspective
- Maryland department of Labor, Licensing, and Regulation, Division of Labor
Though it should go without saying, treating others fairly and in good faith is fundamental to a good business. When in doubt, follow the Golden Rule: treat others the way you’d like to be treated. It’s simple — don’t misrepresent yourself or your services, follow through on what you’ve promised to do, and pay your bills on time. Professional organizations like AIGA and the Graphic Artist Guild frequently include a list of standards that they expect their members to follow. This isn’t just good practice; it helps build everyone’s trust in the entire industry.
For more information on this topic:
- AIGA Standards of professional practice
- AIGA Design Business and Ethics, 3rd Edition
- Graphic Artists Guild Code of Fair Practice
Contracts: protection for you AND your client
While behaving ethically is ideal, it can get a lot messier in the real world. Sometimes, even when everyone has the best of intentions, misunderstandings and problems can arise. This is where a contract comes in. Whether you’re producing work on someone else’s behalf, or hiring someone to help complete your own projects, a contract is a good way to make sure everyone is on the same page before any real work begins.
A contract is a document that describes both the work and how payment will be handled. It is a legally binding agreement between you and your client, stating at minimum:
- Who is involved in the agreement (you and your client)
- What work is being done and/or what property is changing hands
- What the payment terms for the work are
It’s usually recommended to include other details relevant to the type of work being performed — especially for larger, more complex projects. This would include “what if” scenarios, so that if a problem arises later, there’s already a plan in place for how to deal with it. Those details should include:
- Production schedules
- Payment schedules
- What happens if you or the client decide to end the contract early
- Legal details, such as which state’s laws would be used if a problem arises
While you may want a business lawyer to help you develop a contract that’s right for your business, you can find templates and sample contracts online. Here are a few links to get you started:
- AIGA overview: How Contracts Work
- Glossary of contract terminology from Graphic Artists Guild
- Information you should get before finalizing your contract
- Client agreement template from AIGA
- Letter of agreement from Graphic Artists Guild
- GAG also includes several contract templates in their Handbook of Pricing and Ethical Guidelines.
- Subcontractor/employee agreements from AIGA
Intellectual Property: Trademarks and Copyright
Your ideas belong to you — that’s the premise of intellectual property laws. New creative expressions should be registered with the appropriate agency to keep them protected. This way, the rights to use them can be sold or leased like any other product.
- Patents protect new inventions of all kinds
- Trademarks and Servicemarks protect brands, ensuring that businesses and their products have unique identities, preventing fraud
- Copyrights protect original creative work, and ensure that the creators of specific works can decide where and how they are reproduced or displayed
Patents can be registered, which means they are approved and enforced by the U.S. Patent and Trademark Office. Because patent records eventually become public, some businesses opt to keep specific details of how their products are made as trade secrets — within the limits of the law, of course. If your business is inventing new products or software, you’ll find more information at https://www.uspto.gov/patent
Trademarks and servicemarks are also registered at the U.S. Patent and Trademark Office.They can include the name of your business, a phrase, an image (including a logo) or all of the above. They need to be unique and unlikely to be confused with other existing marks. You’re not required to register in order to use the ™ or ℠ symbols with your name and/or logo, but you gain significant legal protections if you do. These include the ability to use the ® symbol, to sue in federal court, and to register your trademark in other countries. Registering your business name with your state does not mean it’s been registered with the Trademark Office, which is the only way to ensure that no direct competitor can try to use the same name anywhere in the country.
If you’re creating branding materials for other businesses, you may want to familiarize yourself with the requirements of what can be registered, in case your client wants to protect their brand this way as well.
Copyright is registered and enforced through the U.S. Copyright Office, and for those in the creative industry, it can be a two-edged sword. It means that you retain the right to profit from any new creative work that you make, but it also means that any creative work that you want to make use of is most likely protected by the copyright of the person who originally made it. Registering your copyright helps you get money back from people who use your work without permission; however, even without registration, all creative works are copyrighted by their creators as soon as they are finished. Even after the creator has died, those copyrights don’t expire for 70 years.
Regardless, whether you register or not, you can indicate ownership of your own material on or near where it is reproduced, such as “© 2017 Awesomesauce Productions” or “Copyright 2014 Jane Doe.” This will provide you with some protection from inadvertent pirates, and will serve as evidence in court if not.
Permission to use copyrighted work is usually transferred through a license that determines exactly how that work can be used. For example, stock photo licenses may limit how many copies can be made from a single license, or with what types of products they can be used. Using someone else’s work without permission can leave you your clients open to lawsuits, cease-and-desist orders, and penalty fees. So do your homework and remember: just because you found it on the internet, does not mean it’s free for anyone to use!
Some employment agreements include a clause that insists the company or client you work for owns the copyrights to everything you produce for them — not you. This is is commonly known as “work for hire,” or a full transfer of all copyrights. Be sure to read your contracts carefully, and know what you’re getting yourself into.
- Register your copyright at the U.S. Copyright Office
- Frequently Asked Questions about copyright
- Copyright basics for graphic designers
- Can I use someone else’s work? Can someone else use mine?
- Fair use: when it’s ok to use copyrighted works without permission
- Public domain: works that are not under copyright and therefore free for anyone to use.
- A shorter summary on the public domain.
Sometimes you’ll want to talk to a lawyer to make sure you’re doing everything correctly. There are lawyers that specialize in all of the areas mentioned above, as well as some who specialize in tax law, and more. Ask a friend in the industry for a referral if you’re not sure!
- Maryland Volunteer Lawyers for the Arts help out low-income artists and creatives find pro-bono and discounted attorneys. They also offer free clinics and workshops on legal topics.
- Small Business Association primer on business law