105 – How to Protect Your Company & Scale Your Startup – with Scott Smith of Royal Legal Solutions

If you want to keep your business over the long haul, you can’t leave it all to chance. Legal troubles can ensue, and it may have nothing to do with anything you’ve done wrong. In this episode of The New Music Industry Podcast, I interview Scott Smith of Royal Legal Solutions who shares not only about how to protect your business but also the steps we need to take to scale our businesses. Download the PDF Transcription Podcast Highlights: 00:14 – Introductions 00:26 – How can we legally protect our companies? 02:09 – Do online businesses get sued too? 03:47 – What steps do people need to take to fully protect their company? 06:27 – GDPR and compliance 10:53 – How can you invest tax free to increase returns by 20% automatically? 13:21 – Are there any advantages to being set up as a self-employed or entrepreneur from a tax perspective? 15:09 – How do attorneys think about startups? 16:50 – What sort of missteps do people make when scaling their business, and how do we avoid them? 18:53 – Why jumping on the latest technology might not be helping you grow your business 22:29 – Selling your personality as a product? 26:10 – What social media is for 28:56 – The basics of music copyright and analysis paralysis 37:45 – The downside of attaching meaning to every event 39:43 – Burnout and the benefits of meditation 41:16 – Working excessively 43:57 – The high costs of burnout 46:07 – What are some of the biggest challenges you’ve experienced on your journey? 48:30 – What are some of the biggest victories you’ve experienced on your journey? 52:39 – Balance and sustainability 56:03 – Are there any books that have helped you on your journey? 57:59 – Is there anything else I should have asked? Transcription: David Andrew Wiebe: Today I’m joined by Royal Legal Solutions’ Scott Smith. How are you today, Scott? Scott Smith: I’m having a great day today man. How’s it been going with you? David Andrew: Not bad at all. It's been a crazy day but I’m looking forward to this conversation. So, today we're going to be looking at something that has yet to be discussed in the podcast but could be one of the most important aspects of running and growing a rock-solid business, which is the legality of running a business. Now, some of you might be starting to tune out already but maybe when you hear this stat you'll begin to pay more attention. “Over 90% of corporations will be sued in the US.” So, Scott, please elaborate on this. How can we protect our companies fully? Scott: Yeah. Well, you just got to know that if you're in an active business that you should anticipate a lawsuit. The reason why is not because most people are shystey or anything like that. If you're in an active business, you should anticipate a lawsuit.Share on X It really has to do with its people having disagreements about what they think they agreed to and then whatever's on the piece of paper. Right? And then now you have a lawsuit because people get angry. So, to really think that you're never going to be sued is really to say like everybody I do business with for forever is always going to love me no matter what. I'm never going to be angry with them. That’s silly. We, at Royal Legal Solutions, we principally are working with a lot with real estate investors because those have huge amounts of capital tied up into assets and what they need to be doing with their portfolios of assets in combination with litigation protection. But for everybody in your audience, you really got to think about what are the really simple things that you could be doing immediately to just take you from having zero protection into having some protection. The best way to do that would just be like… I don’t know. Just like a simple even one to two LLCs would take you from having nothing into having a very high level of protection if you use them correctly. David Andrew: Now, this is something I’m sure people are wondering a bit but does this is applied to online business just as much as a brick and mortar business? Scott: Oh yeah, for sure. Right? Websites get sued just like anything else. Right? You can get sued for all types of compliance issues like the people's credit cards, note that you put up, like music that will have copyrights attached to it and now people want to sue you over it. We live in the most litigious lawsuit happy country in the world. Really, the right way to do it no matter if it’s with a brick and mortar or whether it's online – Royal Legal Solutions is online. It's a huge online law firm. We help people all across the country no matter where they live. That was one of the things that we looked at initially too was our own asset protection, which was we compartmentalize everything that we have that's worth anything – all the IP, domains, graphics. Everything all belongs to a separate asset holding company. Royal Legal Solutions is really an operating company. It doesn't own anything but it conducts all of the business. It signs all the contracts and does all the customer interface. So, if anybody ever decides to sue us, it's Royal Legal Solutions is the one that did business with them, right. Well, that's the one that doesn't own anything, so we're happy for them to sue it all day long and all the assets of the company are protected in a separate company as a holding company. That's why I recommend every business owner to do is you need to separate all of your assets into one company – a company that owns everything but manages nothing and they need a completely separate company that manages everything but owns nothing. David Andrew: Okay. So, you kind of hinted at it. Would you be able to sort of paint us a picture of the specific steps it would take to fully protect your company? Scott: Yeah. I mean it's really simple, right? It's really just you spin it up two LLCs. You can form those up any way you want to, right. I mean if you can't afford to hire an attorney, go to LegalZoom. That's better. Maybe it'll work, right, if you can’t afford it. But it’s better than just than the absolute “I'm not going to try anything at all.” David Andrew: Better than nothing. Right. Scott: Yeah. Right. Because maybe it will work. You’ll never know, right. And then what you do is then you take all of your personal wealth and your rights to any of the intellectual property you have or whatever and you're going to hold that in asset holding company A. Right? The asset holding company A is just a normal LLC. And then you'll have… The second LLC that you're going to spin up is what's going to be called an operating company and that's a shell company so it’s not going to own anything but that's where you're going to sign all your contracts with. If you hire people for any reason to help you with anything you always conduct it through that other shell company. It becomes really simple because all you're doing any time you are interacting with anybody in the world is like “Oh, I use my LLC for that to sign contracts or do anything with it.” Right? Any time you're having stuff that you make money or that you buy assets or whatever that's all just going to be held inside of your other asset holding company that you never do business out of. It will just hold it in for you. So, it's really simple in a way you actually set that up. Navigating though, like how to do that is something that a company like myself can help you from the ground up on how do you actually do that if you don't want to try to do it on your own. But more power to you if you want to do in your own, right. I don't think there's anything necessarily “special or magical” about attorneys in any way. But really, it's just kind of like one of those deals like do you want somebody else to turn the wrench for you because we've done it a few times and so we can make sure it's done right. But I think anybody really, like realistically - you can learn anything you want to in the internet age, right, if you just spend the time to do it. David Andrew: Yeah. True enough. It's just about making the time. I sometimes get questions that I think are a little bit ridiculous because they could be easily Googled but maybe that's the value I'm presenting. I’m not too sure. I guess if it's a question I feel like I can answer in a good way then I'm happy to do it that way but I definitely know what you mean. Scott: Yeah, for sure. David Andrew: This is something I'm wondering if you've dealt with. Maybe you've had a few questions people asking about this. I'm not sure how much you've dealt with it yourself if your clients are mostly in the US, but what about this whole thing about GDPR, general data protection regulation, which came in effect May 25th? Scott: Yeah. I mean it's one of those things that… We're really focused on just the domestic as a protection piece for people are doing right and so we really limit the scope of what we're doing in terms of what's actually practicalities of lawsuits. Right? And how do the litigation game get played out from attorneys and then how do we make sure that attorneys have no incentive to sue us because they can't find out what we  own and then we don't actually own any thing so they can't get anything from us because everything we own is owned by another company. That's really the scope of what we're looking at. David Andrew: Gotcha. I just thought I would ask because I'm sure it's maybe fresh in people's memory, especially if they have an online business and they've had to deal with the fact that "oh yes, I do have data from people in Europe and now I have to figure out how I'm going to properly protect it and implement it" and all that kind of stuff but… Scott: It's a whole other rat's nest in what you need to do with that.