Bunny ears and cotton tails, the iconic symbols of Playboy and its founder Hugh Heffner. Heffner passed away on Tuesday, September 27, 2017 at the age of 91 at the famous Playboy Mansion. The Mansion was both his personal home, and the center of Heffner’s empire which consisted of Playboy Magazine, clubs across the country, casinos and resorts, and more recently, Playboy online. Heffner’s decades of business success provides an interesting case study on the cardinal legal lessons of establishing a business entity.
(1) What’s in a Name?
The first lesson can be coined from the play Romeo and Juliet with “what’s in a name.” Every great business venture needs a memorable name. Heffner turned the world on its head by branding his business with the name “Playboy.” Prior to the iconic naming of Playboy Enterprises, the term “Playboy” was used as a purely derogatory phrase.
As a business owner, you likely have spent a great deal of time considering what the world should know you as. Before you go ahead and proudly announce your business’ identity, you will want to verify that the name you have selected is legally permissible. Search the Secretary of State to find out if the name you are interested in using is legally permissible. If you plan on conducting business nationally, then you will want to go an extra step and check the trademarks to see if it is available for use in all 50 states.
(2) Protecting You & Your Entity
Though Heffner began his enterprise in 1954 with the first issue of Playboy, he did not formally incorporate Playboy until 1964. There is much speculation that the decision to incorporate Playboy was sparked by Gloria Steinman’s notorious undercover report of the club in May of 1963 to protect him from potential liability.
In order to protect you from personal liability, you will need to form an entity and follow the formalities of keeping your business assets separate from your personal assets and filing the necessary paperwork to keep your business running. There are many types of entities like a C Corporation (“C Corp”); or a S Corporation (” S Corp “); a Limited Liability Company (“LLC”); or partnerships. Regardless of which type of entity you choose to use, you will want to form an entity to protect you from personal liability.
(3) The Team
Third, while Heffner remained involved in his business, he sought the advice and assistance of others because as he once said, “the business end of business has never interested me.” A trusted team is vital to any successful business, and a key member of this team should be legal counsel. Legal counsel is vital to ensure proactive compliance with all statutory and regulatory requirements.
The decisions that you make surrounding the establishment and maintenance of your business entity structure have profound consequences on the future profitability and success of your business. Making decisions with the proper advisement and resources has been crucial to the most historically successful businesses, as demonstrated by Playboy Enterprises.
The team of skilled and experienced business attorneys at Law & Stein, LLP can act as guides as you proceed through the steps to planning your business venture. Together, we will help your business thrive by providing advice on how to maximize your opportunities for growth while minimizing your risks.