The Legal Stuff (Business Licenses, Copyright)


Disclaimer: I Am Not a Lawyer

Nothing in this week’s post should be taken as legal advice. If you have an intellectual property question, a tax question, a contract question, or anything else of the sort, consult an attorney. Also, this post will be extremely US-centric.

Much More Comprehensive Legal Resources for Writers/Self-Publishers:

Writing is a Business, Especially for the Self-Publisher

Even if you’re only traditionally published, your writing career involves contracts, sales, royalties, expenses, tax returns, defending your copyright, and more. For the self-publisher, many small but important jobs quietly taken care of by a traditional publisher, such as paying contractors, buying ISBNs, or sending out DMCA claims against book pirates, now has to be done by you.

I won’t be able to go into great detail about every aspect of the legal and business side of writing, but I’ll give you the main categories, each category’s biggest concerns, and as many resources as I can find. One more time, though, I’ll reiterate that if you have an immediate legal question, consult an attorney.

Creating a Business Entity

Most self-publishers will find no value in incorporating or forming an LLC (limited-liability corporation). These business types aren’t likely to protect you from lawsuits filed against you for things like defamation. Unless a self-publisher plans to publish authors other than themselves or plans to work with one or more partners, a sole proprietorship is the business entity that will work best.

For the self-publisher who writes under a pen name, like me, and/or who wants an imprint name to put as the publisher rather than themselves or their pen name, you’ll need to file a DBA, or “Doing Business As,” with your state—possibly also your county and city. This filing may also be called an FBN, “Fictitious Business Name.”

Consult your state’s trademark database to make sure the DBA you choose doesn’t infringe on an already existing trademark. Filing a DBA not only stakes a claim on the pen name and/or company/imprint name you’ve chosen, it’s also required for your bank to agree to accept deposits that list that pen name or imprint name as the recipient. Even if you write under your real name, I recommend you open a separate business account, which will make tracking your writing income and expenses easier.

At the federal level, you should obtain an EIN (Employer Identification Number) for your business, even if you won’t use a pen name or imprint name. (Type www.irs.gov directly into your browser to avoid landing on a scam site that has made itself look official.) At the very least, having a separate EIN means not having to give your Social Security Number to distributors or retailers in order to receive sales income and yearly tax forms. In my case, I’ve had to provide 1099s to contractors (i.e. my editor), and it’s nice to have an EIN to put on that form rather than my SSN.

Additional Resources:

Working with Freelancers

In previous posts, I already discussed in some detail the process of finding the various freelancers that a self-publisher is likely to work with, such as an editor, a cover artist, or a formatting service. Other people to whom you might outsource work would include an interior print designer, a website designer, a photographer, a publicist, and more. When it comes to a smooth transaction with a freelancer, you’ll need to be aware of three basic things:

  • clear language when negotiating the transaction (the contract);
  • whether you’ll need to file certain tax forms, and;
  • what your rights to the product they deliver should/can be.

Let’s say you’re working with a website designer who is going to make you a custom, responsive design, including the ability to sell your book directly from your site. A professional website designer should have a thorough, (typically) electronic form agreement where you hash out exactly what you expect: what design specifics you want, when the designer will deliver, how many revisions you’re allowed to request, how much post-transaction troubleshooting you’re entitled to, the price, etc. If a potential freelance website designer isn’t as forthcoming or clear with such details, that’s a red flag.

Any freelance work you purchase from independent contractors, as to opposed to a corporation, will need special tax-form consideration. If, in a single calendar year, you pay $600 or more to a contractor, or $10 or more in royalties, you must report those payments to the IRS on a 1099-MISC. Some states also require their own form, so check your state’s tax website. In order to complete a 1099-MISC, you’ll need to request a W9 (a simple form) from the freelancer, which contains information you’ll use on the 1099-MISC. The deadline to file a 1099-MISC (and providing a copy to the freelancer for their own tax return) is early in the year, so don’t be like me and wait until the next calendar year has already begun to start thinking about these things!

One of the biggest concerns you should be mindful of is your rights to the final product a freelancer delivers to you. For example, the freelancer shouldn’t give you a book cover or website design that uses images they haven’t obtained permission and/or license to use. They shouldn’t deliver a cover or website to which you don’t have an exclusive license or assignment; they could turn around and sell the exact same design to someone else. (Displaying the design in their portfolio is typical, though.)

Refer to these resources for more information:

Copyright

WOOF, this is a big topic. I’ll tackle the biggest questions about it, but then I’ll leave the nitty-gritty to a long list of resources. Read all of them. And by all means, search for more information or consult an attorney if you still have questions.

1. Do I need to register my work with the U.S. Copyright Office in order to own the copyright?

As soon as your work exists in a fixed form, whether an electronic file, an audio recording, or in a notebook, you own the copyright to it without having to file any kind of form with the U.S. Copyright Office or paying a fee. That said, mailing a copy of your work to yourself or putting the © copyright symbol into the copyright page of your book does not register your copyright.

2. Should I register my work with the U.S. Copyright Office? If so, when?

In order to claim copyright infringement and file suit, you have to have registered your copyright with the U.S. Copyright Office. Registering it as soon as it’s in a reasonably finished form, especially within three months of publication, is early enough. But you can register your work at any time during the life of your copyright, which is the life of the author plus 70 years.

3. If I publish my book through [blank], am I giving up my copyright?

First, you should know the difference between royalty writing (or licensing) and “work for hire.” The former is work to which you retain copyright ownership while granting a license to publish (also known as "publishing rights," "publishing license"); your compensation is based on sales from which you receive royalties. The latter is work to which you do not retain any copyright ownership—the employer or person commissioning the work owns the copyright and all the licenses/rights contained therein; your compensation is typically a one-time, flat amount. Self-publishing your book through Amazon KDP, for example, only grants them a license to publish while you retain copyright ownership. Potential language pitfalls abound, so please read the fine print carefully as well as the articles below.

U.S. Copyright Law and Defending Your Copyright:

But what about the copyright page in my book?

Yes, let’s do that now! First, let me reiterate that putting a © and/or the word “copyright” on the relevant page of your book’s front matter does not register your copyright with the U.S. Copyright Office. You need to complete an online form, pay a small fee, and mail two copies of your work to the USCO to register it, which may take many months, but which is required before you file suit for any copyright infringement.

The copyright page itself is really rather simple, although potentially time-consuming if you're fastidious like me. You need only refer to “Self-Publishing Basics: The Copyright Page” by Joel Friedlander via The Book Designer. If you need extra guidance, you can refer to the copyright pages of already published books for any variations in wording.

The one thing I struggled with when settling on the exact language of the copyright page in Eidolon was whether to use my pen name or real name on the line containing © and the word “copyright,” which typically looks something like this:

AuthorName © Copyright [Year of First Publication]

Again, I Am Not a Lawyer, so if you have the same quandary, I highly encourage you to consult an attorney.

Another problem you may run into is what to do when releasing a subsequent edition of your book. You have various options. One is to list each edition’s first year of publication. (If you own ISBNs, remember that a significant change to your book’s content requires a new ISBN. You should only list the ISBN that matches the edition it’s printed in.) For example, if you released your first edition in 2002, another edition in 2009, and the latest edition in 2016, your copyright line could look something like this:

AuthorName © Copyright 2016, 2009, 2002

I have also seen subsequent editions and their publications years listed individually under the words “Publishing History.” I have also seen the original copyright line followed by the word “Second Edition [Year]” on the next line. Again, you can refer to how other books have done it or consult an attorney