Ok so I have been getting asked this a lot, “I would like to start my own brand, I have the designs ready to be printed but do I need to register my company and get a trademark?”

Well…I know people who do it both ways, some brands do it for fun and in their spare time and sell a few shirts when they have art showings and things of that nature. I do not consider this a clothing line or a brand really, more like merch. If you are looking to go beyond that and make some sort of profit from the t shirt business then I would say yes you should register your company. As far as trademarks go they are more expensive and takes time, I usually suggest getting your brand off the ground first and then following through with a trademark to protect it. I am not going to talk much about trade marks because honestly they are not required, you can establish the rights of your mark/logo by the legitimate use of it.

As far as registering your company you will need to do a little research and decide which structure you would like to register under. A few factors go into this such as how many owners or partners are in the business, if you have or plan on having employees and things of that degree. Here is a break down of the more popular structures.

Sole Proprietorship Advantages:

• Easiest and least expensive to form in most cases
• Receive all profit/income generated by the business
• That profit goes directly to the owners personal tax return
• You will file taxes using a 1040 and there is no difference between you and the business.

Sole Proprietorship Disadvantages:

• Since you are linked to your business in such a way any debt to the business can also go into your personal life. For example if you were to get sued then it will affect you outside of the company and you could take a big hit.
• It is sometimes harder to get outside funding, you are usually limited to personal funds.

Limited Liability Company (LLC) Advantages:

• As in the name you can not be affected personally if an LLC goes under because it is a “Limited Liability”
• Splitting profits does not have to be 50/50. You and the other people involved can decide.
• You do not have to worry about double taxation (paying twice for your earnings)

Limited Liability Company Disadvantages:

• It is a little harder to file for an LLC then a Sole Proprietorship.
• Can cost a little more in some cases (varies from state to state)

S Corporation Advantages:

• Company losses can be passed on to shareholders
• Protection of limited liability without paying corporate taxes
• Able to minimize self employment taxes, your profits as a shareholder are not taxed.

S Corporation Disadvantages:

• Lots of regulations and requirements must be met.
• More expensive to set up
• IRS keeps closer tabs on you then the others
• All shareholders must be US citizens

*Like I said there are more then the above but these are what you typically see in the apparel industry. I used the LLC format for my business and had no problems, fees vary by state but it was very easy for me. You can google “Register an LLC in (your state) online”, this can be done pretty painlessly.

Ok so after all that is taken care of then you will need to get a TAX ID number (which is free) and an RN# for retagging purposes, which will be what my next post is about.

Hope this helps some of you and come back in the next couple days to learn about the proper way to relabel your shirts and what an RN# is all about!