Are you a content creator or influencer that makes money through sponsored collaborations, affiliate income, or ad revenue?
Here’s your guide to getting your creator business legally legit:
# 1 – Make sure you have the proper rights to whatever content you are selling
Which means either:
- You created it (with your own hands, voice, camera, computer, phone, etc)
- Or you got it from someone else, or someone else helped you and you have a proper license (in writing) to use the content commercially
You can use a simple contract like the copyright assignment contract to handle this (this a bare-bones CYA, especially for things that you are selling where nothing was in writing!) or it could be covered in an independent contractor agreement if you hired someone to create something for you or to help you create something.
So, if you used a freelancer or independent contractor (sometimes calls a 1099-er) to help you in your business like a virtual assistant, photographer, videographer, brand manager, graphic designer, web designer, social media manager, Pinterest manager, customer care specialist, integrator, online business manager, copywriter, etc) then hand that person an independent contract agreement from now and forever more to get all that lovely content properly transferred to your business “pot”.
If you have guests who have contributed to your content like a guest blogger, or podcast/YouTube guest interview — use a guest release to clarify that relationship and make sure you can recycle all the awesome content.
# 2 – Get your “naked” website footer covered with website legal documents
Your website is your home base and it should be a solid, professional place, especially if you are collecting information (hello email list!) and running ads/ selling products from it. The footer of your website needs:
- © Copyright Statement
- Any necessary disclaimers or disclosures based on what information and offers are on your site.
# 3 – Use a professional contract for your sponsored brand collaborations.
Many brands and agencies may send you a contract once you have negotiated terms, but there are other companies (especially smaller businesses) who may be interested in collaborating with you and who don’t have their own contract (or a GOOD one, at least). Make everyone feel like you know what you’re doing by having a solid, attorney-drafted collaboration agreement that addresses deliverables, approvals, intellectual property and media licensing usage, payment, FTC disclaimers, copyright and trademark indemnity, and other critical terms that any professional collab agreement should cover.
# 4 – Incorporate, or register your LLC with your state
Without setting up a proper legal entity, you are operating as a sole proprietorship, which means your personal money and business money are all mixed together (and available for grabs if you get sued!) To put a nice big fence between your business money and your personal money (your car, home, savings account, retirement, assets with a spouse, etc) – please set up a limited liability company, or an LLC (the easiest and cheapest option!) or a corporation.
How? You can DIY, hire a third-party service (which I don’t recommend, because they tend to be a rip-off…cough, cough LegalDoom), or hire a local attorney.
To DIY your LLC and find your state business portal: Google “your state + LLC registration” and look for the .gov result (not the Legalzom/Incfile/zenbusiness links!).
Tip: If you want to preserve privacy and you work from your home, make sure to set up a virtual mailbox AND a commercial registered agent and have those addresses ready when you submit your LLC paperwork online to your state portal. (I like Anytime Mailbox and iPostal1 for virtual mailboxes, but don’t get suckered into adding on any other services, you can file you DIY online by yourself in every state!)
After getting your LLC set up, use the same LLC name to get an FEIN or Tax ID from the IRS here. It is free and should take 5 minutes. (here’s a video tutorial on using the IRS EIN application site). Biggest takeaway= Don’t lose this number!! They’re a huge pain to look up (as in the IRS may NEVER answer their phone).
# 5 – Comply with FTC disclaimers
The FTC (or Federal Trade Commission) protects consumers from deceptive or misleading advertising, and they have specific rules for social media influencers and creators – download the most updated guide here.
In a nutshell, the FTC says any promotion of a third-party product/service (meaning it’s not obvious that you there is a connection for this company or brand) needs to have a CLEAR and CONSPICUOUS disclosure of any material relationship. To translate that into non-legal, if you are sharing any content and there is ANY kind of financial, employment, personal, or family relationship between the brand and you – you need to disclose that relationship by saying before the caption line break(before the “fold”):
- Ad or #ad (hashtags aren’t required, but many use them)
- Sponsored or #sponsored
- Affiliate or #affiliate
The FTC has said to “Don’t use vague or confusing terms like “sp,” “spon,” or “collab,” or stand-alone terms like “thanks” or “ambassador,” or other abbreviations and shorthand.
I recommend the “grandma test” exercise – would your grandma, lovely that she undoubtedly is, understand that there is a connection between you and the brand you are talking about/liking/promoting and creating photo, audio, or video content for? Make it THAT clear. Grand-test clear.
FAQ: Is it enough to turn on the “paid partnership” button (on IG, for example)?
Answer: Not really. While you should use the paid partnership, the FTC has said that using an in-app feature may STILL not be clear enough that there is a relationship, so it isn’t enough to rely on.
# 6 – Secure the rights to your brand name (do a trademark clearance search + apply for a trademark!)
Just because you have a domain, social media handle or even an LLC doesn’t mean that you own your brand name. Don’t make the mistake of waiting too long to get your brand name protected and locked down or you may be hit with a cease & desist or struggle with copycats and spin-off accounts.
Schedule a consult with brand protection attorney Brittany Ratelle (who has filed more than 250 trademarks) to find out if you’re ready to protect your brand and be ready for scaling and growth opportunities like joint products, licensing, books, merch, and multi-channel distribution.
# 7 – Get “people” legit – set up clear boundaries with your CEO hat
When you’re a business owner, you need to think differently about “boundaries” and how clear expectations can help EVERYBODY have a better relationship as your business grows and gets more complicated (and fun!) You may need to add other legal agreements if you offer these things in your business:
If you host events, you need an event waiver/release.
If you take photos or videos of other people to use in your business, have them sign a model release (sometimes called a media release.)
If you run an affiliate program (where people are affiliates for YOUR offering), you should have them agree to these affiliate terms when they sign up for your affiliate program.
If you run online giveaways, you need some fine print for the social media posts and on your website.
If you use testimonials in your marketing, use a testimonial release to make sure you have permission to share.
If you are providing 1:1 services, make sure you have a solid client service agreement to protect that revenue stream.
If you have a business partner, make sure you get a business prenup or Operating Agreement, signed for your business.
Want more guidance? If you’d like a step-by-step roadmap on getting a modern online business legally legit, download the FREE legally legit workbook!
Do you like to listen and learn? Tune into the Creative Counsel Podcast with attorney Brittany Ratelle to get business operations action items, inspiring founder stories (including the highs and the lows and what they would have done differently), and tips from leading online business leaders.