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Best Ways for Business Owners to Protect Their Businesses

Every business owner needs to properly protect themselves and their businesses.  The two best ways to protect your business include forming a business entity and registering their trademark(s).

1. Forming a business entity:

The first way to protect yourself and your personal assets is to register your business under a formal business entity as to separate personal dealings from your business dealings. It is important to speak to an attorney to determine the right business structure for your company as legal and tax formalities vary for each type.  The two most common business structures are the LLC and the Corporation.  An attorney can advise you on the pros and cons of each business type.   Mistakes business owners may make is thinking they need one type of business entity, (such as a Corporation), when an LLC would be a much better fit. In most states, registration is relatively straightforward once the proper entity for your business is decided on.  In North Carolina, where I am licensed, the registration process takes about 3- 5 business days once the paperwork is filed correctly with the secretary of state.  The filing fee in North Carolina is less than $200, however this fee will vary state by state. 

2. Register your trademark(s):  Protecting your brand is just as important as registering your business as an entity.  Every business has intellectual property and in today’s world, brand protection is key.  Trademarks can increase the value of your business to potential investors or buyers.  I would advise any business or brand owner to talk to an attorney prior to registering a trademark on their own.  The process can be highly technical, and attorneys have access to tools not typically available to the public that can greatly increase the chances of your trademark being accepted by the United States Patent and Trademark Office.   One of the biggest mistakes I have seen business owners make is filing their trademark on their own without any input from an attorney.  Some of the pitfalls of filing on your own include the possibility that there is a registered trademark with the same or similar brand or business name as yours, which you may be infringing on.  

The trademark registration process can be a lengthy one and can take anywhere from 12 to 18 months from start to finish.  Keep in mind, that a single trademark does not protect your business or brand name in every feasible category.  U.S. trademark law is divided into 45 classes of goods or services.  A business owner would register their trademark in the class that are actually selling goods in or providing services in. An attorney’s advice is critical in determining what class or classes are best to register your product or service.  If you are selling products or offering services in multiple categories, the filing fees can get costly.  Filing fees for a trademark start at $250 per class or category Once you pay the filing fee, the United States Patent and Trademark Office does not offer refunds.  So it is best to at a minimum consult with an attorney prior to filing a trademark or registering your business as an entity. 

Have questions about registering your trademark or forming your business? Contact Littlejohn Law Offices today!