Knowledge Base

If you’re looking to purchase a property for your business or newly formed LLC, you probably already know that you need a pile of legal documents. An essential part of the deed is the legal description of the property.  Defining Legal Description The legal dictionary defines it as a “formal, detailed, and sufficient property/asset description that definitively identifies and locates a specific property.” The legal description is an essential component of a deed that describes and defines the property that’s bought or sold. It may sound simple, but there cannot be any inconsistencies in this description or imprecise language used. If the description is left open to interpretation, it may result in legal complications and you not owning the exact property you’ve purchased.  To analyze why a legal description is a significant part of the deed, we need a more thorough definition. Deed Definition The deed is a document that establishes ownership over a property. In this case, we are interested in a deed that transfers real estate ownership between the seller and the buyer. Components that make the deed valid, legal, and contractual are:  Grantor and grantee identification Expression of conveyance by the grantor Legal description Signature of grantor or grantors  Simply put, the deed is a legal document that transfers ownership of the property from the grantor to the grantee. Keep in mind that there are other types of deeds, but the property’s legal description is the key element of transferring ownership of the real estate.  Types of Legal Descriptions The legal description of real estate has to cover the parcel of land with accuracy and precision to be easily identified and located. There are several types of legal descriptions used to identify and thoroughly describe the property in question:  The US Public Land Survey System  The lot and block survey system (Subdivision)  Metes and Bounds The State Plane Coordinate System Depending on the circumstances, multiple legal property descriptions may be used to describe the real estate listed on the deed. Using more than one method to define the property nullifies the chance of misinterpretation or error.   The USPLS is a grid system set up by the federal government to describe large parcels of public land. Any property or piece of land can be precisely located using township, section, and subsection labels in a county defined by the Principal Meridians and Baselines. This system was established in 1785 and is used in 30 states.  A legal description of the property primarily used in urban and suburban areas is known as the lot and block survey system. Also known as the recorded plat survey system, this legal description starts with a more extensive section of land that’s already described by the metes and bounds method or by another description. This parcel is then divided into smaller lots that are recorded in county records. Each block has an alphabetical and numerical value assigned for easier identification.  The system of legal description that uses natural landmarks and geographical features is called metes and bounds. This system is commonly used in situations when survey areas have an irregular outline. The method describes the boundaries of the property by using direction and distance between each point and monument (geodetic markers).  The State Plane Coordinate System uses a coordinate system with north-south and east-west axis to divide each state into smaller zones. SPCS was created to assist with surveying, mapping, and engineering throughout the US. It consists of 124 zones that are adjusted to the geographical features of each state. It uses a simple Cartesian coordinate system to identify locations.  Each individual legal property description has some essential elements:  County, town, and subdivision  Border defining description Parcel’s name where the property is located The professional land surveyor will use a combination of these elements to describe the property. The best practice is to hire a land surveyor to verify or correct any legal descriptions before signing the deed to ensure it’s up to date. Legal Description Compared to Other Forms Other forms of describing real estate are usually not sufficient enough to qualify as a legal description of the property. The most common ones that are used for other purposes but aren’t adequate for deeds are:  Property tax records may use a brief summary of the property, which will differ depending on the state.  While seemingly a good way to locate and identify the property, the street address is not reliable. The address may change, and it’s not precise in defining property lines, so it can’t be used in a legal document.  Landowners will sometimes confuse these with the appropriate property legal descriptions. When preparing the deed for the property, the standard practice is to use the exact one found on the latest deed. Legal Description and Title Insurance Reading the legal description can leave landowners confused as to what they are purchasing. Luckily, title insurance protects buyers from any form of ambiguous legal descriptions and forgeries. The best steps you can take are:  Making sure you have title insurance coverage  Requesting a new survey from your title company Survey and Legal Description Conclusion Conducting a new metes and bounds survey helps you avoid any legal pitfalls with the real estate that you are signing the deed for. This way, any inherent troubles with the legal description can be nipped in the bud.   The critical thing to remember is to check the documentation received by your registered agent and review it with a professional before signing the deed.

By Dusan Vasic

Defined as “a group of words used together in a fixed expression,” a phrase can be short or long. In addition to the ones we use every day, there are plenty of famous trademark examples for slogans we all heard at some point: "I'm Lovin' It" "Just Do It." "Think Different." “Impossible Is Nothing.” "Maybe she's born with it. Maybe it's Maybelline." You probably recognize the companies these expressions belong to, even though only one of their names was mentioned directly. You might even be looking to protect a witty string of words yourself and need to know how to trademark a phrase properly. Luckily, this article will explain all the steps. The Pros of Having a Good Slogan If you want to develop a business, a catchphrase would be a great way to attract customers - provided it’s catchy enough. It can be a word, phrase, slogan, or even a design that sets a specific party and their products apart from others. Trademarking something means you gain legal protection for your brand’s recognizable features and that they can’t be used without your permission. However, bear in mind that trademarking a phrase means following some strict procedures, and the process itself might take a few months. Still, if you do get approved, this can be an excellent long-term investment, as it can help your brand stand out while it grows. A trademark is not the only way to protect your intellectual property, as there are also copyrights or patents. Here’s how they’re different: Patents are mostly reserved for inventions. Copyright takes care of art, music, and writing. Trademarks protect words or phrases. How to Trademark a Slogan or Phrase? Trademark registration can be a bit complicated, but it’s also rewarding, as it helps you make your business recognizable.  The US Patent and Trademark Office (USPTO) manages your trademark application, as well as the entire registration process. To be clear, you don't have to trademark a slogan you came up with to use it for your product, but if somebody else does too, you won't have any legal grounds to oppose that. On the other hand, if you’re using something that’s already been trademarked, the entity that protected it will very much be able to sue you. Trademarks do not have specific time frames like patents or copyrights, either. How much does it cost to trademark a phrase, you ask? The price depends on the option you picked, but the cheapest application costs $250 per class of goods or services. These are the application steps: Check USPTO’s website to see if your phrase is available and make sure there are no existing similar phrases. Submit an online application to get your trademark certified. This step also includes a filing fee which can be paid via USPTO’s Financial Manager, using a credit card, electronic funds transfer, or a USPTO Deposit Account. Memorize your application identification number so that you can check up on your trademark application process later on. Wait for the response. This step might take a while, but once you receive a reply, write back to the USPTO; if you don’t respond within six months, it will close your application. Enjoy your trademark! But don’t forget to maintain it. Now that the phrase is 100% your property, you’ll need to check in with the USPTO to make a statement every five years to confirm that your trademark is still active. Most people would like to know how to trademark a phrase for free, but if you want to get a real, certified trademark, this isn’t really possible. There are Common Law Trademark rights, but they don’t apply throughout the USA and are mostly used by companies focused on local markets. You can also consult with a trademark attorney, who will give you some useful tips and guide you through the procedure if needed. This service adds a fee of $1,000 to $2,000 to your original costs, but it can make the whole process a lot easier for you. Trademark - the Secondary Meaning If a phrase becomes so popular that people associate it more with a specific product than its original meaning, it becomes a trademark in the secondary sense. This is nowhere near as common as official trademarking, and it’s difficult to achieve that status, but making that happen means you have an incredibly well-established brand. For example, the name “Holiday Inn” has attained a second meaning, thanks to widespread use in reference to a specific hotel chain, not a variety of hotel services in general. Registered Trademark Symbol We already familiarized you with how to trademark a phrase. Once you do that, you can use the ® symbol after your slogan, company name, or logo. If you haven’t registered it yet, you can use TM for goods and SM for services, but this indicates you have adopted the trademark under the Common Law, meaning it won’t be just yours everywhere. Celebrities and Their Failed Trademark Applications Celebrities are often trying to find new ways to remain relevant in the public eye, and they sometimes do that by applying for a trademark, even if getting one doesn’t make much sense. There were some bizarre attempts, but, as you can imagine, most of them were denied.  To name a few, Taylor Swift unsuccessfully tried to trademark the names of her three cats (Benjamin Button, Meredith Grey, and Olivia Benson). Kim Kardashian made an even bolder move, trying to trademark the word ‘kimono,’ as that was the name of her clothing line. Last but not least, Donald Trump tried to trademark his catchphrase “You’re fired!” but it did not work, and soon he was the one who was fired.  This list could go on, showing that trademark law should not be taken lightly.

By Nikolina Cveticanin

What Is Copyright?Copyright is a legal tool for ensuring that original works, such as writing, photos, or music, belong to the people who created them. You cannot use, copy, modify, or publish copyrighted work without the author’s permission. Copyright is often announced by the phrase “All rights reserved,” meaning that you may face a lawsuit if you violate it.Say you find a movie you want to watch on a torrent site, fire up your VPN, and get ready to download it. If you proceed, you’ll probably be breaking the law, as all movies have a copyright statement to prevent unauthorized distribution.That’s copyright in general, but if you’re, say, starting a new business and want to protect your brand, you need a specific legal tool - a trademark. You’ll probably need some instruction on what elements of your business can be protected through US copyright law, and we’ll have some recommendations for that later on.What Is the Meaning of “All Rights Reserved?”If you copyright text, music, your product name, or anything you created, no one can use your work without your permission. Creators and business owners use this phrase to imply that they reserve the right to pursue legal action under copyright law in case of misuse.Let’s make things simple: If you write a book, it belongs to you, and you are the only one who can distribute it further or allow others to read it or copy it. In other words, all your rights are reserved.“All rights reserved” has the meaning of keeping your ownership and distribution rights protected. The prase is often used along with a copyright notice, which consists of three obligatory elements: The word “copyright”, the abbreviation “Copr.”, or symbol © The year of the first publication of the work The name of the authorNow, we’ll have to disappoint you. Even though this phrase used to be legally required starting from the 1910 Buenos Aires Copyright Convention, it’s not anymore. Namely, failure to include “All rights reserved” or a copyright notice has lost all legal significance between March 1st, 1989 and August 23rd, 2000, thanks to the Berne Convention. Its signatories declared that every right is reserved unless explicitly stated otherwise. Copyright is granted to you by default through the very fact that you created the original content.However, do not hesitate to use the phrase, even though it’s technically unnecessary, as it tells those who wish to abuse your rights they shall be prosecuted. Less dramatically put, it warns possible copycats that publishing, modifying, or duplicating original content is not allowed without your permission.How Do You Copyright Something?Using the “All rights reserved” symbol on your website or artwork is not the only thing you need to do to protect it. Having copyright and protecting it from infringement are worlds apart.To prove that you have intellectual property and discourage others from stepping out of line, you need to do one of the following, or both: Place a copyright notice on your artwork or product. Register it with the US Copyright Office.You don’t have to do either, but it will make disputes much more straightforward. As we said, there’s no need to claim your copyrights. All your rights are reserved from the moment the work is created. However, if you wish to proceed with an infringement lawsuit, showing that your work is registered with the Copyright Office is the most substantial evidence you could bring to court, but again, it’s not mandatory.On the other hand, if you want to trademark your brand to reserve all rights, you need to deal with the US Copyright Office, and we recommend choosing an LLC service to help you along. They offer trademark registration, a seller’s permit, legal help, business licenses, pass-through taxation, etc. Take a look at our list of the best LLC Services to help you decide.Copyright DurationSo, what does “All rights reserved” mean in terms of length? Your ownership and distribution rights are protected, but for how long?As of January 1st, 1978, intellectual property is protected for the duration of the author’s life, plus an additional seventy years. If the work was anonymous, pseudonymous, or made as part of a commission, copyright lasts for 95 years from the moment of creation or 120 years after it was first published, whichever is shorter. There is no need to renew your registration with the US Copyright Office or for your descendants to do so.All Rights Reserved vs. Creative Commons vs. No Rights ReservedSome authors wish to selflessly share their efforts with anyone who might benefit from them. In this case, they include the statement “No rights reserved,” which permits others to use it for charitable, public, or personal purposes.Having copyright, for example, allows authors to charge for the use of their intellectual property. Once they give up these rights, however, anyone can use their work for free.Although you usually need permission to use copyrighted material in your work, there is an exception called Fair Use. Even though all rights are reserved to an author, small portions can be used to critique, teach, or as part of a news report, but not for commercial purposes. The press can also freely copy news and articles, but it has to add a reference to the source.Finally, let’s mention Creative Commons (CC). This organization uses a slightly different phrase, “Some rights reserved,” to illustrate their mission of free access to creative and academic work. It’s a non-profit that helps share knowledge by connecting content creators to people who want to use their work.If you’re still wondering when to use “All rights reserved,” take a look at any book’s copyright page. It contains the copyright notice, edition and publication information, cataloging data, print history, and other legal notices. A single glance will give you insight into the world of intellectual property protection.

By Danica Djokic

Small-business owners often think an LLC is an excellent way to form a business because it represents an elegant way to divide personal assets from their business entity. A Limited Liability Company - or LLC - means that a business owner cannot be personally responsible for their company’s debts. Flexibility with profit and tax distribution is another vital reason business owners choose this business solution.If you’re wondering how your salary works in this case, our guide will show you the options for getting paid, as well as your responsibilities to the IRS.How To Pay Yourself in an LLCThe answer depends on how you choose to structure your business. An LLC can be owned by one person (a single-member LLC) or co-owned (a multi-member LLC). IRS rules consider an LLC to be a sole proprietorship when there’s just one member and a partnership when there are two or more LLC members. You can also choose to structure your LLC as a corporation. In this scenario, you’ll be an employee in your company and get a regular salary.The three different solutions offer different profit distribution and tax requirements.How To Pay Yourself in a Single-Member LLCAn LLC where you are the only member is a single-owner LLC. The good thing is, as the sole proprietor of your business, the only payments you need to think about are your own. On the other hand, you don’t get a salary or any other type of standard compensation. Instead, as a business owner, you can access the funds on your LLC account and transfer the amount you need to your personal account. This type of compensation model is known as “owner draw.”Unlike a fixed salary, the owners’ draw from an LLC account is a flexible method, as there is no predetermined draw limit or strict payment schedule. You can simply write a check or transfer money from your business account to your personal account at any time you want.How To Pay TaxesThe IRS regulates tax payment for all LLCs, including single-member ones. An LLC with just one member is considered a sole proprietorship and a disregarded entity, which means you don’t need a separate tax return for it. Instead, the LLC-payroll owner reports LLC income as part of their personal income, and that’s what gets taxed. You’ll use Schedule C to report your business earnings and losses on an annual level and submit it with your Form 1040.What Does It Mean for You?First off, you’ll need to pay taxes for everything the company earns, regardless of funds drawn. Secondly, since you’re considered the LLC’s sole proprietor, you’ll need to report self-employment taxes (Social Security and Medicare) to the IRS. The main downside of using the owner draw payment method is the extra skills you need to do your taxes.How To Pay Yourself in a Multi-Member LLCA multi-member LLC is a business entity with two or more members, and the IRS will view it as a partnership. You can also choose your LLC to be treated as a corporation by the IRS, in which case, you’ll be an employee and get a salary. We’ll discuss this option later.Much like in a single-member LLC, each owner of a multi-member LLC can draw money from the company account. There’s one capital or a general-ledger account that shows business expenses, earnings, the capital contributed by each member, etc. And if you’re wondering how much do multiple owners of an LLC get paid, it depends on the partners themselves. Together, you must decide how much each of you should be paid and how the payments will be transferred.There’s a document every aspiring proprietor should have when forming an LLC with friends or business partners. It’s called an operating agreement and shows each member’s ownership percentage, rights, and how much of the business earnings they get. The document can also include information on how to pay LLC members, especially when the company doesn’t make much - or any - money. Paying yourself with a partnership LLC can quickly become a bone of contention, so make sure to agree with the other members on stable payments even when your company doesn’t make profits.How Does Paying Taxes as an LLC With Multiple Members Work?If your LLC is classified as a partnership, each partner must pay individual taxes directly to the IRS. You calculate your tax returns based on each member’s ownership percentage. For LLC income-tax purposes, you need to file the IRS Form 1065 to report your business profits and expenses. After that, you and the other LLC members on payroll must show your share of a partnership income on Schedule K-1.It’s also important to mention that the members of an LLC must pay full taxes on their share of the earnings, no matter how much they draw from the joint account for compensation. For example, if your share in an LLC is 50% and you take only a part of that as an owner draw or even nothing at all, you’ll still pay taxes on 50% of the business earnings.LLC Guaranteed Payments vs. Owner DrawWith owner draw, the proprietors can get funds from the LLC’s business account as needed or set up recurring payments. It’s a good solution, especially if you’re the only owner of your business. However, you need to be careful to leave enough money in the business account for your company to operate smoothly.On the other hand, you can use guaranteed payments. As the name suggests, they are a guaranteed amount that each co-owner receives, regardless of how much their business is currently earning. LLC member compensation should be strictly outlined in the operating agreement, which is why it’s so important to pay special attention when creating this document with your partners. Although an LLC looks like an easy business entity to manage, its owners should be familiar with the fact that managing an LLC comes with certain rules. For example, if you decided to set up a guaranteed LLC payment for each member, you need to do that before you officially form your LLC.Run an LLC - Pay Yourself From a Corporate AccountAnother road you can take when you start an LLC is to structure it as a corporation. You and the other owners will be considered employees, and instead of owners draw, you’ll get monthly salaries. Each member must report their earnings from the LLC as part of their personal income to the IRS. In addition, the company itself has to pay taxes. You’ll need to file different tax forms and schedules, depending on whether your LLC is incorporated as a C-Corp or S-Corp.

By Danica Jovic

We’ve all heard of the YMCA, and not just because of the song. Of course, there are plenty of other famous nonprofit organizations (NPOs) - including the Scouts, the Red Cross, and the Salvation Army - that are making a positive, long-lasting impact on the world, one individual at the time. If you have a cause you believe in or want to change the world for the better, you might consider starting a nonprofit organization yourself.  But how do nonprofits work? Should you start one yourself? And what does the process involve? In this article, we’ll explain the benefits of nonprofit organizations and outline the steps you should take if you decide to start one. What Is a Nonprofit? Informally speaking, any group whose mission is to help others could be considered a nonprofit organization. The group’s primary goal should be to serve the community or to promote and work on a social cause.  Some of the most common NPOs you encounter every day are associations, churches, and clubs. You might have also read about or donated to nonprofit organizations that provide funding for education or humanitarian aid. Many focus on raising funds for research to find a cure for a specific illness. There is, of course, a more comprehensive answer to the question: “What is a nonprofit organization?” It would be fair to describe an NPO as an organization that receives donations, sponsorships, goods, and services to help with its mission. These are the main sources of income for any nonprofit organization.  A nonprofit organization’s profits must be immediately applied to pursuing its goal or donated to other related nonprofits. This is a major definition of nonprofit organizations. It is extremely irregular, sometimes even illegal, for the leaders of nonprofit organizations to make a profit from their involvement. What Is the Difference Between Nonprofit and LLC? Many people assume that a nonprofit corporation isn’t allowed to generate any profits whatsoever. That’s not the case. In fact, the main difference between nonprofits and LLCs lies in how they use their profits. LLCs can - and usually do - distribute some or all their profits among owners and shareholders. An NPO can’t do this. Of course, nonprofit employees still earn reasonable salaries if they are hired instead of volunteering, but these salaries do not increase based on the organization’s success. The sole purpose of the money a nonprofit generates is to further the goal and mission and keep the organization running. What Are the Benefits of a Nonprofit Organization? Perhaps you’re wondering whether or not you should formalize your group as a charity or nonprofit organization. If that’s the case, you should know there are multiple benefits to turning your group into an NPO. The process itself is not daunting, and if you’re looking to create the change you want to see in the world with your group, it’s well worth the trouble.  The Credibility You Need Being part of an enthusiastic group of people busting their backs for a cause is amazing, period. However, at some point you’ll need a business address and a bank account. Making your organization last without funding can be challenging, and while there are plenty of benefits of working for nonprofit organizations, not everyone is going to be dedicated enough to stay true in the long term. Getting donors to invest in an unofficial group could be a futile effort, too. By incorporating your group into a nonprofit organization, you’ll gain the credibility you need to approach donors with the confidence your goal deserves.  Access to Funds Once you turn your group into a nonprofit organization, it will open up many doors leading to public and private grants that could help you pursue your goals. There are many benefits of nonprofit organizations for the welfare of society, so naturally there are plenty of grants available. After all, if you’re registered as a 501(c)(3) nonprofit organization, donations are usually tax-exempt, which will make your group more appealing to donors. Chasing donors can be a hassle, but it’s likely the best way to keep your organization afloat. However, even if you simply rely on small donations from the general public, you need to make sure you’re adhering to state laws. Some states require that you register as a nonprofit to receive donations from the general public. If not, you could get in serious trouble. Limited Personal Liability Speaking of trouble, once you’re registered, you’ll only have limited personal liability; it’s one of the advantages of nonprofit organizations. Unlike with non-incorporated groups, if your NPO gets sued or is struggling with debt, your personal assets are protected.  That’s not to say that once you have nonprofit status, you can do whatever you want and not be liable for your actions. There are certain cases in which limited liability can be revoked, such as board members mingling nonprofit and personal funds or engaging in dodgy practices. Still, in case of a dispute, board members are generally protected if they follow the relevant rules and regulations that apply to nonprofits.  Advice from a Professional Registered Agent Once you decide to incorporate a nonprofit corporation, it’s mandatory by law to have a registered agent. That could be you or one of your team members, but it’s not a good idea; we strongly advise you to hire a professional registered agent.  It might seem like an annoying cost you could live without, but there’s a good reason for acquiring these services; you want to have a professional handling your legal paperwork in a proper and timely manner. These services typically cost between $100 and $300 per year, and in some cases NPOs qualify for a discount. For that amount of money, a registered agent is well worth it. What Are the Disadvantages? There are, of course, some disadvantages. Consider these carefully to make sure you understand the pros and cons of a nonprofit organization.  Inevitable Expenses Access to grants does not come for free, so you might find yourself in a pay-to-play situation. If you’re looking to establish your group as a nonprofit organization, you’ll need to dedicate some startup funds, as you would with a business. The first major expense you’ll have to deal with is filing all the paperwork. Forming a statutory nonprofit company requires you to submit documents to your state’s business entity filing office. Some states also require an annual fee as part of the nonprofit’s cost of operation. After that, you might need some legal assistance to ensure you’re working within the laws of the state in which you’re operating. Of course, if you opt for online legal services, these costs will be trivial compared to having an actual lawyer on retainer, but it’s still worth factoring them in when you plan your budget. Unavoidable Ongoing Obligations Even though it might feel like it, you’re still by no means exempt from your compliance obligations once you establish your NPO. Make sure you check what these are within the nonprofit statute under which you form your nonprofit business. It might require you to draft bylaws or operating agreements, keep records or specific books, or file an annual report. Significant Regulations Keep in mind that every nonprofit is closely regulated by a particular nonprofit statute, so you need to ensure your management team is up to par. This is mandatory if you’d like to retain your nonprofit status and avoid public scrutiny. This can encompass many things, but primarily it will require you to have a board of directors, which must gather for periodic meetings. You’ll usually need to keep notes of those meetings, organize quora, and much more. Wondering How To Set Up a Nonprofit Organization? There is no such thing as a foolproof method for starting an NPO, as each one is subject to different regulations. The best approach is probably to hire an LLC service company to do the job of founding the nonprofit for you. You’ll have to pay a reasonably small fee, for which you’ll get the peace of mind that a professional is on the job. If, however, you’re determined to do it yourself, here are some general steps to help you through the process. Step 1: Do your research.  Step 2: Form your NPO’s team.  Step 3: Develop a strategy and an operating plan for starting a non-profit. Step 4: Select the NPO’s name, board of directors, and legal structure. Step 5: File a non-profit certificate of formation. Step 6: Apply for federal employer certification. Step 7: Prepare a 1023 federal tax-exemption application to get 501(c)(3) status. Summary Starting and running a 501(c)(3) organization is a major undertaking. It takes a lot of research, determination, and a group of exceptional people who are all united with the purpose of achieving a common goal.  Hopefully we’ve answered the most basic question: What are nonprofit organizations? Now it’s your turn to establish the NPO that will bring about the next great change!  

By Vladana Donevski