The benefits of starting a corporation are many, including copyright protection, which can save thousands of dollars in legal fees that trademark lawsuits can incur.
One entrepreneur, Kori Stanton, who began an online cookie business, recently discovered the importance of filing incorporation papers when she faced the possibility of an unexpected lawsuit, the Wall Street Journal reports. Last spring, Stanton had the opportunity to showcase her product on the Rachael Ray Show, providing her business with national publicity. But, the new attention her company received resulted in another business with a similar name threatening a trademark-infringement lawsuit.
Stanton was able to procure an online address under the company’s former name, but in response to the threatened litigation, she changed her company’s name to e. e. cookies. However, she still had to deal with $11,000 lost on unusable marketing materials and other fees. Stanton told the news source, “It was very discouraging. I felt like I had to start over.”
Filing incorporation forms early on can provide the protection necessary to mitigate the effects of legal action, which can result in substantial savings.
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