Writer’s legal issues, part 3

The legal plight of authors

A five-part series of NOT legal advice by somebody who is confused

Part 3

BECOMING A PUBLISHER

Hi and welcome back to my blog. If it’s your first time here, I hope you enjoy the post and consider visiting every week.

As you know by now, this is the third installment of a series of posts regarding the legal problems, tasks, and tribulations all writers and, particularly, authors, face.

The very first thing I must point out is a disclaimer: I am not a lawyer. This is not legal advice. What follows are comments on what I have found scouring the internet, talking to published friends, and some insights from a couple of Q&A sessions I’ve had with actual legal professionals.

Let’s get after it!

You finished your debut novel.

You wrote the whole thing. Discovered in the early stages that you used “just”, “that”, “was” and many other words way too much. You found out the hard way that all those -ly words sneak up on you. You found out about strong verbs, power words and so many other things. Drank gallons of coffee, tea, or your energy drink of choice.

You edited it and had it edited. You read it and had it read. You had it proofread.

You paced the novel well. Now, you have a page-turner in your hands. You are sure, absolutely sure, that once it’s published people will love it. (Yes, I know about imposter syndrome, but that’s a different post, let’s get back to legal stuff).

You are ready to go forth and publish.

Sure, you could query it to agents and publishers, but that would take months, years, perhaps, before your novel got picked up. So, why not go indie?

Well, let’s look at “indie” in a little more detail.

What do we mean by indie?

Usually, we mean self-published. A self-published author is an author who published a book at personal expense. This self-published author can be Uncle Bob who wrote the family history and published the book for all the close family members. All fifteen of them. And, furthermore, he is giving them the book as Christmas gifts. He is still a self-published author, just not a commercial one.

Now, an Indie Author is an author who self-publishes for the specific purpose of selling the book(s), who wants to reach as many readers as possible and grow a profitable author-publishing business. This author wants to make a living out of publishing.

The first decision you must make is: should you publish under your name or using a pen name?

If you use a pen name you must make absolutely sure you can prove that person that shows up on the cover as the author is in fact, you.

If the author is John Smith, and your legal name is in fact Pedro Hassan Chang you may run into trouble if John Smith files a claim that he wrote the book.

Oh, Come ON! Who would take the trouble?

If your book sells three units a month? No one.

If your book is a smash hit and starts rolling out like gangbusters? It could happen. It really could. You would have an unnecessary fight in your hands.

So, that’s where copyright comes in, and since we covered that in the previous post, I will not go into it at any length here.

So we are all good, right?

Nope.

Buzzkill, I know.

Your book is out and it’s doing great. In the first month alone, you made a cool quarter of a million dollars, after taxes. This is it! You are off to the races. Fame and fortune are around the corner.

You receive a letter. It states that Mr. John Smith (he tried to claim authorship of the whole thing, so, why not him here too, right?) is suing you for plagiarism. He claims that Chapters X, Y, and Z are exactly as those in his novel “The flight of the suicidal bird over the mantel. A biography of a desperate crow”.

Your novel is a gothic solar punk space opera, so that hardly sounds right.

None the less Smith is after you. His lawyers get in touch with you and tell you they will proceed to ask the court to seize all profits from the books. Furthermore, they are suing for damages. They want your house, your car, and your dog. Not the cat, he’s allergic.

You know he doesn’t have a leg to stand on. There are some similarities (the guy is evil, but not a complete nut) between your chapters and his. His book came out just about the same time as yours, a week before in fact.

In short, he has enough to take you to court, but maybe not enough to win. He can, however, make your life miserable.

Here is where having a “Corporate Shield” comes in handy.

A “Corporate Shield” is the concept that shareholders, officers, and directors of a corporation will not be held personally liable for the actions of the corporation.  Limited liability company or LLC benefit from this too.

There are caveats to this shield. You must comply with the laws and regulations, but in our case, where an author wants to go indie and at the same time protect personal assets, it is relatively simple to do.

A simple way to protect yourself is by creating and registering an LLC.

An LLC is a business structure that has flexible organization, is privy to tax efficiencies, and provides limited liability for its members. The members can be individuals, such as our author friend, corporations, other LLCs, and even foreign entities. One of the benefits of an LLC is that there is no minimum or a maximum number of members.

In the State of Florida, for example, the process would go like this:

You perform a search for three suitable names, make sure that they are NOT being used by any other company. You pick your preferred name and state that your first selection is the one you want, but accept either of the other two in case that one is unavailable. I will not go into DBA, because that would probably not apply to our case. If you want or need a post on it, let me know in the comments.

You file your Articles of Organization with the Florida Division of Corporations. The form must be accompanied by a cover letter, with the applicant’s name, address, email, daytime number, and the LLC’s name. Pro Tip: DO NOT use your home address as the company address. If you do not have an office, get a P.O. Box, but under no circumstances use your home address as your business address. It may have all kinds of unintended consequences.

You must include your submission filing fee, at the time I’m writing this blog post, it is about $125. Fees can change, check with the Florida Division of Corporations for the most recent fees.

The forms can be submitted online or by mail.

The forms will require you to include the following information:

LLC name and address

Registered agent name (our author friend’s name), address (the P.O. Box), and signature

Name, address (again, the P.O. Box, they do not have to be different), and title of members and/or managers, if any

Effective date, if other than the date filed

Signature of an authorized representative or member (our author friend)

Upon registration of the LLC, a letter will be sent to the applicant.

Ideally, you should get at least another person in the LLC with you. It may be your partner, spouse, one of your children, etc. The reason for this is that the LLC will have the copyrights to your works and, in case of your untimely demise, the rights will go to whomever you chose, seamlessly.

In your state, there may not be the option of registering an LLC, so you may have to go with an S corporation or a C corporation. Both are good choices, but I would strongly suggest you get a lot of information on the ideal choice for your specific case.

Now we can face Smith and his lawyers with confidence. They may come after the LLC, but they can not come after our personal stuff. Whew! That was close!

There are many other benefits of a corporation of some sort having the rights to your work. For one thing, many expenses are easily registered for tax purposes. You can have a salary from your company and even claim that as an expense. There are many legal creative alternatives to work around expenses and taxes once you have a company doing the heavy lifting.

But, this is my first book! I got no money! You say.

Yes, I understand that. It is still a good option for you to consider. Always protect yourself and your intellectual property. It is a prudent way to proceed. Not only to protect yourself from attacks but also to protect your estate in case something happens to you.

The whole thing will not be that expensive. It can run up to a couple of thousand dollars. Even less than that if you cut corners here and there and do most of the work yourself. It is, just like life or health insurance, peace of mind. A typical case of “better to have and not need it”.

Keep in mind that I’m not a lawyer and this is not legal advice, but this is the adventure I’m embarking on. I don’t think I’ll make that quarter of a million in the first month, but I can dream.

So, there you have it, why as indie authors we may find it useful to become a publisher.

What do you think? Is it a viable option for you? Had you thought about any of this? Let me know, I’d love to hear from you.

Thanks for reading and have a great day.

Published by tjmanrique

I'm a SciFi, horror and fantasy writer. I will publish sometime in 2021. Mean time, My web page has my book cover concepts and a few short stories and stories about my writing journey.

2 thoughts on “Writer’s legal issues, part 3

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