Legal Moves Every Latina Entrepreneur Should Make in Year One (Hint: ChatGPT Shouldn’t Write Your Contracts)

As a corporate attorney, I’ve seen firsthand how Latina entrepreneurs bring bold vision and creativity to business. Every day I see inspiring Latinas turning ideas into businesses, determined to uplift our communities. But with great ideas, comes risk and the need to take action to protect that vision and business.

In year one of a business, especially in a world transformed by AI, the right legal moves can mean the difference between thriving or struggling long-term. And with AI transforming how we create and replicate content, the first year of your business demands intentional and tailored legal strategy. Every day I read headlines about AI-generated songs going viral or brand deepfakes circulating online. Especially in your inaugural year, you’ll make dozens of critical decisions about how to structure your company, protect your brand and use the latest AI tools. 

To protect your bold ideas and hard work, consider the following five legal moves in year one. Each step shields you from common pitfalls and sets you up to scale safely.

1. Establish a Legal Entity

Forming an LLC or corporation isn’t just a “nice to have” or a “tax strategy” (though it can be that, too). It safeguards your personal assets from business liabilities and lends credibility when seeking contracts, investors, grants or other opportunities. Jurisdictions vary, but Illinois (where my practice is located) offers streamlined and easy to navigate legal entity registration with online filing. This foundation positions you to build responsibly and scale with confidence.

Without it: Your personal property would be exposed. For example, if an unhappy vendor threatened a lawsuit, a sole proprietor (i.e. a business owner that does not have a legal entity) could lose money from a joint (combined business and personal) bank account or even face a lien on their home. In other words, not incorporating means any business liability could spill over into your personal life.

2. Trademark Your Brand

Your brand’s name, logo and slogans are your voice, and they are assets of your business. In other words, they have value. First and foremost, research your brand name, logo and slogans to ensure you are not infringing on someone else’s intellectual property. If not, register them federally to prevent copycats and protect your identity. This is particularly critical now: AI tools can mimic styles, slogans and even names that closely resemble yours. Federal trademark registration provides legal grounds to stop infringing uses.

Without it: Your brand identity is at risk. A trademark can help deter someone else from legally using a similar name, logo or slogan for similar goods or services which could lead to confused customers and a diluted reputation. If a competitor registers your name first, you might even be forced to rebrand later, reprinting all your materials and potentially losing the customers who already know you. In the worst case, failing to trademark can hand over control of your brand name to someone else. Think of a famous slogan like “Just Do It.” If you built a brand using a similar phrase, you’d probably very quickly get a cease-and-desist from Nike. Similarly, an AI tool could inadvertently generate a tagline that too closely mimics a big brand’s slogan, putting you in legal hot water.

3. Include Smart IP & AI Clauses in Contracts

When hiring freelancers or engaging with vendors, especially for AI‑assisted work, use tailored contracts drafted by your corporate attorney. The contract should clearly state who owns the intellectual property and require that any AI-generated work complies with intellectual property license terms in your contract. Also address AI specifically. Require the vendor or freelancer to disclose any use of AI in the work and confirm they have rights to the output. The contract should state that your business will own the final product, including any AI-generated elements, and that any AI tools used comply with license rules (so you’re not getting infringing content). 

Without it: You risk losing control of your own creations. If the contract is vague, a freelancer might claim partial ownership of the work (or its source files). A well-drafted contract, preferably by a knowledgeable corporate attorney, avoids these traps by spelling out that all rights transfer to your company and that AI uses are transparent. Because let’s face it, you’ve seen the advice: “just ask ChatGPT to write your contract, it’s free.” Resist that urge. Even though AI can draft sentences quickly, it lacks the human judgment and up-to-date knowledge that real attorneys provide. An attorney should know what is or is not enforceable under applicable law. AI may not know. 

Beyond fabrications, AI-written contracts tend to be generic. They might miss clauses that are crucial for your business or use language that doesn’t fit your specific situation. AI can’t think critically or foresee niche issues, so important protections may be omitted. Finally, consider data privacy. When you ask a public AI platform to draft or review a contract, you’re uploading your company’s sensitive plans and financial details to a third-party server. There’s no guarantee those details remain confidential. A data breach or misuse of that information could betray client privacy or your business secrets.

4. Vet AI Tools for Content Creation

AI tools are fantastic for marketing, copy and design, but they can come with certain risks. Not every AI platform has clear licensing or indemnity provisions. Some systems may generate content that unknowingly mirrors copyrighted work, and you could be on the hook for infringement. Use reputable platforms with transparent licensing. Keep human oversight by editing, adapting and adding original input. This protects your brand and ensures the work is even eligible for copyright protection.

Without it: You could be exposed to copyright claims. AI models are trained on vast datasets, which often include copyrighted material. Sometimes the result is that AI-generated content inadvertently mirrors protected works. For example, if an AI image generator spits out a logo too close to someone else’s mark, you might trigger infringement claims. By carefully choosing reputable AI tools and treating their output as a first draft (not final copy), you prevent these hidden risks.

5. Build AI Governance & Monitoring

As highlighted in legal industry discussions and in the media, AI can “hallucinate.” In other words, it can produce unauthorized reproductions or even create reputational risk if unchecked.

Here are some internal AI policies you can implement:

• Oversight: Ensure a human reviews all AI‑generated content
• Audit: Regularly review for plagiarism
• Training: Educate yourself and your team on ethical, secure AI use

Without it: “Hallucinations” or bad data can slip through and hurt you. Advanced AI can sound authoritative even when wrong. In one real-world case, an attorney’s legal brief (partially drafted using ChatGPT) had entirely fake cases and quotes made up by the AI. Unchecked AI outputs can damage your reputation or invite legal troubles such as misinformation claims.

Noeli Serna is a Spanish-speaking corporate attorney and the founder of Serna Legal Services. She guides ambitious entrepreneurs through business growth, strategic business purchases and sales and complex contracts.