The Legalities of Freelancing Under a Brand Name
Being easy to find is crucial for a freelancer.
That used to mean making sure that you had a name — your own or a brand name — that started with ‘A’ so you came first in the phone book. These days, it means having something unique that ensures that prospective clients find you immediately when they plug it into a search engine.
It can seem easy to set up a brand name: you just have to buy a domain name and suddenly you’re in business under your new name. But there are some legal concerns that you need to deal with, sooner rather than later.
Getting the Money
If your clients generally pay you in cash, it doesn’t matter what name you’re operating. But cash transactions are something of a rarity in my experience. The exact rules governing checks, wire transfers and other ways of having clients send you money vary by country, but there’s usually an expectation that you either use your legal name for financial transactions or you use a business name that has been correctly established. That usually includes registering your business name with the government but can also involve other steps.
Considering how important it is to actually get paid, if you’re going to stay in business, you need to make understanding the local regulations a priority if you don’t want to work under your own legal name.
I’m based in the U.S, where banks will go out of their way to make sure that you are only depositing checks made out to your official business name or your legal name. If the occasional check made out to a nickname or spelled incorrectly goes through, they aren’t going to worry about it. But if you are consistently depositing checks with different names on them, the bank may come to the conclusion that you’re up to something shady.
I routinely get checks with a couple of different company names on them because I use different approaches to target different types of clients. As a result, I needed to file paperwork showing that I was “doing business as” for each of the brand names I use.
Trademarks and Branding Materials
It’s important to note that filing paperwork to do business under a trade name or a brand is not the same as filing for a trademark. If you’re concerned about someone else using a similar brand, you’ll need to take steps to protect your brand name.
That usually means filing for trademark protection. It’s not always necessary to have a trademark application on file in order to get someone to stop using a similar brand, but if the matter goes to court, having a trademark can be the deciding factor in whether you can protect your brand.
It’s easy to assume that, as a freelancer, a trademark — or any of the other legal steps that go along with operating under a business name — are unnecessary. But it just takes a client mistyping your brand name into a search engine once to lose a project (or for a client to send a check to the wrong address to lose funds).
The Value of Your Business Name
Because our clients are (hopefully) happy to recommend the freelance businesses they work with on a regular basis, you can wind up building a valuable brand, especially when you aren’t just freelancing under your own name.
You may even find yourself in a position that you can sell your freelancing business down the road if you decide to leave freelancing. It’s definitely an easier proposition if you’ve built your business under a name other than your own — clients don’t automatically assume that you personally will do every project.
That sort of value is something worth protecting and building in any way you can, as well as making sure that you take care of every legality required of you when you work under a business name.[disclaimer/]