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The Importance of the Legal Entity

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  • When contracting with a business, it’s crucial to ensure the agreement is made with a legitimate legal entity capable of fulfilling its financial obligations for the work our Talent performs.
  • Just as you would use your full legal name—not a nickname—when signing a contract or opening a bank account, we must contract with the business's legal entity, not its brand name or domain name.
  • If we contract with the wrong legal entity or a legal entity that does not have the financial ability to meet its obligations, we run the risk of never collecting for the services we provided because we not have an enforceable contract.
  • They can take the position that the entity doesn't exist or, if it does exist, it does not have the ability to pay its bills.

If we don't have a contract with the right legal entity, we may not be able to collect payment in the event we have to sue to collect past due amounts, thereby hurting your branch's profitability

Example:

  • We enter into a contract with JA, the brand name for John's Accessories. If JA decides not to pay, who do we sue? There is no legal entity named JA
  • We now have to prove that JA is John's Accessories, which costs money and time, and there is no guarantee of success.