I don't want to get sued and lose everything and have to live on the street...

50 replies
Yes I know we should never ask for legal advice...but I was just curious to know what warriors think about all this...of course I will contact a lawyer to ask for advice but is always good to know opinions and experiences so I can learn about all this topic...

I watched a presentation from the 7 figure code seminar...I would bet that the presentation was made by a lawyer...i think his name is drew miles...

He explained a story about a succesful guy that he had a succesful business but that all of sudden he lost everything...i think because of a lawsuit...

Drew said that if he had set up his business in a different way he woulnt have lost and he wouldnt even have been sued...

He said that 1 of every 4 people on the seminar would be sued...at the begining of the presentation was very scary...he was saying how risky is running a business and so on...but then he kept on saying that if we follow his tips we would not be sued...

He talked about entity structuring and about how important is
to be set up in such a way that you can keep them from taking it all away.
Also I remember he said never hold any business in our own personal name..
Basically, I think he was saying that it was possible to bulletproof our assets...

Basically the rules he gave were:

separate your personal assets from your businesses

and separate your businesses from one another..

I will check that presentation again..so I can give you more details about that...but i though that
someone can sue you and your business...so would that entity structuring still protect me if they sue me (the person)

Has there really been internet marketers that have lost everything? if i have to lose everything at least i hope i can keep my lists of subscribers...

I know that i have to ask for advice to an attorney but i hope this thread makes all warriors aware that they have to consider the legal issues of the online business....many courses miss that part...they show you how to make money but dont tell you that you have to be careful about the legal issues of an online business....(some time ago myself i wasnt aware about the risks of an online business...)
#live #lose #street #sued
  • Profile picture of the author hometutor
    Not legal advice, but look up LLC if they exist in your country. Limited Liability Corporation

    Rick
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  • Profile picture of the author Apply Marketing
    I WILL DEFINITELY SUBSCRIBE TO THIS TOPIC

    this might be the most important topic ever. so people help us out here

    I have the same fears
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  • Profile picture of the author raradra
    Yes, his name is drew miles (and that was a great seminar!)

    Drew Miles Tax Planning Advice and Tax Savings Tips — Wealth Building thru Business Tax Deductions

    My lawyer explained to me that if you set it up right and do get sued they can only go after specific assets assigned to that particular llc which in some cases will be none at all if structured really well.
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  • Profile picture of the author E. Brian Rose
    I would like to say don't do anything that would get you sued, but the truth is that you can be sued for crossing the street the wrong way, so forget that advice.

    Here is some real advice...

    Stop reading this thread and go ask an attorney for advice. Many will give you advice for free in hopes that you will eventually retain their services. Threads like these are magnets to people that like to give advice just so they can sound professional... even if they have no idea what they are talking about.
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    • Profile picture of the author secrets2010
      Originally Posted by E. Brian Rose View Post

      I would like to say don't do anything that would get you sued, but the truth is that you can be sued for crossing the street the wrong way, so forget that advice.

      Here is some real advice...

      1. You should definitely look into setting up an LLC. Choose a state where the corporate veil is hard to cross. Nevada is one of those states.

      2. Stop reading this thread and go ask an attorney for advice. Many will give you advice for free in hopes that you will eventually retain their services. Threads like these are magnets to people that like to give advice just so they can sound professional... even if they have no idea what they are talking about.
      Of course I will go ask an attorney for advice...but now I know that Nevada is a state where the corporate veil is hard to cross...maybe the attorney woud have not mentioned that to me...however i live in spain so i'm not sure if is a good idea to choose nevada....thanks for the advice
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      • Profile picture of the author Rachel Zaouche
        Originally Posted by secrets2010 View Post

        Of course I will go ask an attorney for advice...but now I know that Nevada is a state where the corporate veil is hard to cross...maybe the attorney woud have not mentioned that to me...however i live in spain so i'm not sure if is a good idea to choose nevada....thanks for the advice
        This is the problem. You live in one country and the person on this forum that thinks they know what they are talking about lives in another where the tax and legal issues are completely different.

        People buy for two reasons i.e. to move away from pain or towards pleasure. The lawyer in the seminar used the first reason i.e. pain = fear , to sell his services and that of the firm he works for and to an extent attorneys everywhere. I am not knocking him at all. For all I know he may be the best in his field but unless he is an expert on Spanish and International tax law he cant help you.

        Protect your assets, set up your business correctly, market ethically and only take advice on professional issues from a professionally qualified individual who is an expert in Spanish and perhaps international law and tax not someone on a forum with an opinion. You have to pay for this type of advice if you want to be able to rely on it. You wouldn't come onto a forum asking for a diagnosis for a medical condition and the same reasoning applies to legal or tax matters. Asking for a recommendation for an accountant or lawyer who understands IM or business is another matter though.

        ps for the record Nevada and Delaware come up as the Holy Grail whenever a thread like this gets raised. An LLC incorporated there may be the answer for some but it is not a one size fits all by a very long way. If you are not currently under the US tax system there is a very good chance your lawyer or accountant or both will tell you to steer clear.

        pps hope this reads as being helpful and not having a go as that is certainly not my intention at all.
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      • Profile picture of the author Joe Mobley
        Originally Posted by secrets2010 View Post

        however i live in spain so i'm not sure if is a good idea to choose nevada....thanks for the advice
        Let me suggest that an LLC or business structure setup in almost any state in the US will offer you protection and benefits.

        Your Nevada LLC (for example) would allow you to have a PayPal account even if PayPal does not serve Spain.

        Foreign individuals and corporations do this all the time.

        Just a thought.

        Joe Mobley
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  • Respectable guy or not...great seminar or not...but 1 in 4 people sitting there will be sued? Come on--it's great to protect yourself but it's obvious to me that this guy is laying it on pretty thick. Talk to a lawyer and do what you need to do, but be careful about convincing yourself you need to buy what he's selling. Protect your business but also protect your money, IMHO.

    Cheers,
    James
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  • Profile picture of the author Apply Marketing
    I live in Bulgaria. If I sell stuff to US citizens do I have to obey all the FTC regulations as well or I have to obey my country's ones?

    Please answer me - every time I ask this question no one responds and I dont know what to do.

    And I will NOT take the response as legal advice. I will contact an attorney but I need some guidelines

    PS: Oops, I just saw someone commented on that matter, but used Spain for example
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    • Profile picture of the author secrets2010
      I was curious because it seems that some attorneys think that an LLC doesent give you so much protection as we may think...they say that someone can sue you (the person) and your business...so that entity structuring that was talking about drew couldnt do anything in this case...
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      • Profile picture of the author raradra
        Originally Posted by secrets2010 View Post

        I was curious because it seems that some attorneys think that an LLC doesent give you so much protection as we may think...they say that someone can sue you (the person) and your business...so that entity structuring that was talking about drew couldnt do anything in this case...
        It depends on where you are. For example here in Alberta Canada an llc offers about 60% less protection than it does in say Nevada USA. It's important to talk to a lawyer where you live as laws vary everywhere.
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        • Profile picture of the author TheCG
          LLCs are nice and all but they won't help you when your wife/husband decided to take your @ss to the cleaners.

          Divorce. That is what there should be more asset protection devised for. Protecting you from greedy exes and money hungry lawyers.
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          • Profile picture of the author danicat
            Originally Posted by TheCG View Post

            LLCs are nice and all but they won't help you when your wife/husband decided to take your @ss to the cleaners.

            Divorce. That is what there should be more asset protection devised for. Protecting you from greedy exes and money hungry lawyers.
            Prenup and postnups are the llcs of marriage! Or, in the immortal words of Kanye West "if you aint no punk holla we want prenup, we want prenup yeah. Its somethin that you need to have cause when she leave yo a@@ she gonna leave with half!"

            But ontopic, llcs are sweet. However, as a bookkeeper you have to mind your ps and qs or you will shoot holes all in your protection. You, in general, need a board, need to hold meetings, etc. also, again, in general, you cant take money out of the kitty when you need or want. You need a structured salary and bonus structure. Did a $20 bazillion dollar.launch yesterday? You cant just go buy that lambo you want unless its in the guidelines for you to bonus yourself. And dont think the company will buy you a personal use lambo.

            So, see how muddy that gets and how quickly it crumbles? A successful (protection wise) llc needs a retained lawyer and an accountant doing yearly, if not quarterly reviews.
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            • Profile picture of the author TheCG
              Yeah, I know. You are right. But when you don't have anything, you don't think about prenups.

              Then you look up 20 years later and you have worked your tail off while she "shopped" all the time.......anyway.......

              Broke or not, get the prenup!
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              • Profile picture of the author danicat
                Originally Posted by TheCG View Post

                Yeah, I know. You are right. But when you don't have anything, you don't think about prenups.

                Then you look up 20 years later and you have worked your tail off while she "shopped" all the time.......anyway.......

                Broke or not, get the prenup!
                Amen brother! I know, im one of those evil women who runs away with the house and shopped, but I worked hard and am working on starting something while my husband walked off and has absolved himself of any obligations. Hes not out jobhunting, hes playing. Im making ends meet and learning and doing. So, being that i Aint no punk, im gonna holla we want postnup! Hehe. Gee thanks texas for having no legal seperation.

                But its a good lesson! You dont have anything now that an llc or a prenup would protect? Get it anyway! Do you plan on being poor forever? I sure dont!
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              • Profile picture of the author kindsvater
                Excuse me while I barf all over this horrible thread.

                secrets2020, come on, you're an IMLC member. Read it. There's a section about this.

                As I've said before, an LLC or corporation is not going to hide and secure assets for the vast majority of Warriors.

                How many FTC judgment do I have to post where the LLC/corp/partnership AND the individual lose virtually all of their assets.

                Just look at one my recent threads about this.

                Here is my favorite example as to why an entity will not have this benefit: You have a sole proprietorship. You sell a fraudulent product and get sued. Your personal assets are at risk.

                Now assume you create an LLC or incorporate what was your sole proprietorship. The same fraudulent product is sold by the LLC or corporation. Now the LLC/corporation AND you have liability.

                Why? Because of your PERSONAL involvement.

                Where does an entity help save your assets? When you are not personally involved in the wrongdoing. For example, the stockholders of Google are not personally liable if someone slips on a slick floor because a drink was spilled.

                As far as Nevada corp being "strong" to pierce the corporate veil. You're dreaming. All incorporating in Nevada (assuming you do not reside there) does is provide evidence as to why the corporate veil should be pierced - because you're using the corporation for an improper purpose.

                But it does NOT matter, because BOTH you and the corporation will be liable if you're involved in the wrongdoing. Even worse, since the corporate stock is a personal asset the entire corporation is at risk of being lost.

                Are there still reasons to incorporate? Absolutely. Just understand that incorporating or creating an LLC is not some magical wall that will make you lawsuit proof.
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      • Profile picture of the author AlanB
        Originally Posted by secrets2010 View Post

        I was curious because it seems that some attorneys think that an LLC doesent give you so much protection as we may think...they say that someone can sue you (the person) and your business...so that entity structuring that was talking about drew couldnt do anything in this case...
        An LTD (Limited Partnership) can give you the greatest protection as long as you act like a corporation and have your annual board meetings on record (even though you are the only board member) you have to log minutes and topics discussed, its a simple log document.... aaaand very important... that you DO NOT commingle money from one company to another.... because this will allow attorneys to 'pock' the 'veil' and down the drain goes your limited liability protection.
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        • Profile picture of the author mcmahanusa
          As has been stated, in the U.S. you can be sued by anybody for almost anything, frivolous or not. Even if you win, you lose, because you will have to foot the bill for an attorney to fight it. I am talking civil suits here, wherein you risk losing anything just because someone wants what you have. The huge number of lawsuits against casinos in Nevada (people claiming to have fallen and sustained injuries - all the casino's fault, of course!) is proof of this.

          You absolutely want the advice of an attorney. But be cautious and ensure that the attorney is experience in the area of asset protection. And he/she must be versed not only in your own country's laws, but also in those of the countries in which you conduct business. Expensive? Yes, possibly. But not doing so can be disastrously expensive.

          In the matter of an attorney - or anything else - trust but verify. Then verify again. Then verify again.
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    • Profile picture of the author ElMundodelExito
      Originally Posted by Apply Marketing View Post

      I live in Bulgaria. If I sell stuff to US citizens do I have to obey all the FTC regulations as well or I have to obey my country's ones?

      Please answer me - every time I ask this question no one responds and I dont know what to do.

      And I will NOT take the response as legal advice. I will contact an attorney but I need some guidelines

      PS: Oops, I just saw someone commented on that matter, but used Spain for example
      Your signature said that you have a heavy australian accent but you live in Bulgary and sells to americans, refers to a spaniard thread receiving guidance from canadians.
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  • Profile picture of the author Apply Marketing
    These are actually the hardest things in this business... And nobody is talking about it.

    If they throw a seminar on this matter, they will make millions...
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    • Profile picture of the author Kay King
      Best bet is to talk to a qualified attorney in your country.

      It's possible to create an LLC or corporation in the US if you live elsewhere but you may leave yourself open to double taxation.

      The US is one of the most litigious countries in the world. You might be safer from lawsuits if you establish a business in your own country.

      You won't know until you talk to a business attorney.

      kay
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  • Profile picture of the author RealSocialSignals
    This is one of those times when I say; thank God I'm not from the US, but from a country so small and unnoticeable
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    • Profile picture of the author genietoast
      Lawyers. What do you expect?
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    • Profile picture of the author Regional Warrior
      Originally Posted by Ardit.WM View Post

      This is one of those times when I say; thank God I'm not from the US, but from a country so small and unnoticeable
      What new zealand sorry,sorry I know I will burn In hell for that:p
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      • Profile picture of the author FranciscoDancon
        If you don't have a whole lot of money there is not really any real reason to form an LLC. I am in medical school, and one doctor in Florida gave me some advice. He says that he doesn't carry malpractice insurance. In Florida they can't take your house in bankrupcy proceedings. He said he stashes his cash overseas and when a lawyer sent him a letter demanding a settlement, he replied that he doesn't have insurance and that the lawyer wouldn't collect anything. He never heard from the lawyer again. The moral of the story: don't make yourself a target.

        I'm surprised to hear that no one has brought up the option of stashing their cash overseas. LLCs aren't bulletproof, and sometimes if they go after your company they can "penetrate" the LLC and then they can go after you personally as well. But, did you know that in Belize you can create a trust where you are both the beneficiary and the administrator? I'd like to see them manage to break into your Belize trust--it ain't gonna happen.

        Just food for thought. I'm not advising anyone of anything, other than saying if you have real money you might be interested in looking at some offshore havens for it.
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        • Profile picture of the author LB
          Originally Posted by FranciscoDancon View Post

          If you don't have a whole lot of money there is not really any real reason to form an LLC. I am in medical school, and one doctor in Florida gave me some advice. He says that he doesn't carry malpractice insurance. In Florida they can't take your house in bankrupcy proceedings. He said he stashes his cash overseas and when a lawyer sent him a letter demanding a settlement, he replied that he doesn't have insurance and that the lawyer wouldn't collect anything. He never heard from the lawyer again. The moral of the story: don't make yourself a target.

          I'm surprised to hear that no one has brought up the option of stashing their cash overseas. LLCs aren't bulletproof, and sometimes if they go after your company they can "penetrate" the LLC and then they can go after you personally as well. But, did you know that in Belize you can create a trust where you are both the beneficiary and the administrator? I'd like to see them manage to break into your Belize trust--it ain't gonna happen.

          Just food for thought. I'm not advising anyone of anything, other than saying if you have real money you might be interested in looking at some offshore havens for it.
          If you put your money in a third world country's banking system- lawsuits are the last of your worries.
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          • Profile picture of the author FranciscoDancon
            The stability of the banks is definitely something to consider but they are far more stable than you'd think. I spent about three years living in a third world country and there was only one bank run the entire time I was there, and that bank survived....the owner is in prison now lol but all of his depositors got their money. People who bought other investments from him weren't so lucky....

            Now I guess you can figure out which country I lived in :-)
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  • Profile picture of the author CCGAL
    On the subject of incorporating in Nevada or Delaware; I think Cliff Ennico does an excellent job of explaining the various ways of setting up your business in America and protecting your assets in his book "The ebay Seller's Tax and Legal Answer Book".

    To paraphrase, he says that unless your business is physically located there, or you are starting up a high-tech venture and plan to raise venture capital in your first 2 or 3 years, "there is absolutely no reason in the world to incorporate in Delaware or Nevada!" He goes on to explain that even if you incorporate in one of those states, it does NOT protect you from the laws of the state in which you are actually doing business.

    The book is not intended to take the place of running your business organization plans by an attorney who knows about internet marketing, but he does a great job of explaining (in language an average person can understand) what you need to know if you're going to sell products online. It's focused on ebay, but almost every single thing he covers would be directly applicable to selling anything online, at least for Americans doing business in America.

    Hope that helps.
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  • Profile picture of the author InitialEffort
    Set up your business in Nevada or Wyoming to avoid paying federal income taxes and also to have more protection for your entity.

    This does protect you against some orders lawsuits like charging orders depending on the number of people in your entity.
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    • Profile picture of the author kindsvater
      Originally Posted by InitialEffort View Post

      Set up your business in Nevada or Wyoming to avoid paying federal income taxes and also to have more protection for your entity.
      This is 100% wrong. Do not follow this advice.

      You cannot be sitting in your flat in New York and say hey, I think I'll form a corporation in Wyoming and not have to pay federal tax.

      What, Wyoming is exempt from the IRS? No longer a state?

      While I know you meant state income tax, that is still wrong.

      You and your corporation are still New York entities because that is where you are. All you've done is doubled your paperwork because you have Wyoming papers and also New York papers to file. Sorry to say but you will still have to pay New York state income tax.

      If you want a Wyoming business be prepared to have a physical location, bank account, employees, etc., and to have work actually done in Wyoming.
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      • Profile picture of the author secrets2010
        Hi kindsvater it seems you say an LLC or corporation is not going to hide and secure assets for the vast majority of Warriors....however, i really think that drew on that seminar said that it was possible to bulletproof our assets through entitiy structuring...

        So it seems to me that you (kindsvater and drew miles) don't share the same opinion on this....? as far as i can remember drew didn't mention that even with a good entity structuring it was possible to lose all of our assets...

        Regarding:

        "Here is my favorite example as to why an entity will not have this benefit: You have a sole proprietorship. You sell a fraudulent product and get sued. Your personal assets are at risk"

        what if move my personal assets to different entities...? is that even possible?

        thanks





        Originally Posted by kindsvater View Post

        Excuse me while I barf all over this horrible thread.

        secrets2020, come on, you're an IMLC member. Read it. There's a section about this.

        As I've said before, an LLC or corporation is not going to hide and secure assets for the vast majority of Warriors.

        How many FTC judgment do I have to post where the LLC/corp/partnership AND the individual lose virtually all of their assets.

        Just look at one my recent threads about this.

        Here is my favorite example as to why an entity will not have this benefit: You have a sole proprietorship. You sell a fraudulent product and get sued. Your personal assets are at risk.

        Now assume you create an LLC or incorporate what was your sole proprietorship. The same fraudulent product is sold by the LLC or corporation. Now the LLC/corporation AND you have liability.

        Why? Because of your PERSONAL involvement.

        Where does an entity help save your assets? When you are not personally involved in the wrongdoing. For example, the stockholders of Google are not personally liable if someone slips on a slick floor because a drink was spilled.

        As far as Nevada corp being "strong" to pierce the corporate veil. You're dreaming. All incorporating in Nevada (assuming you do not reside there) does is provide evidence as to why the corporate veil should be pierced - because you're using the corporation for an improper purpose.

        But it does NOT matter, because BOTH you and the corporation will be liable if you're involved in the wrongdoing. Even worse, since the corporate stock is a personal asset the entire corporation is at risk of being lost.

        Are there still reasons to incorporate? Absolutely. Just understand that incorporating or creating an LLC is not some magical wall that will make you lawsuit proof.
        Originally Posted by kindsvater View Post

        This is 100% wrong. Do not follow this advice.

        You cannot be sitting in your flat in New York and say hey, I think I'll form a corporation in Wyoming and not have to pay federal tax.

        What, Wyoming is exempt from the IRS? No longer a state?

        While I know you meant state income tax, that is still wrong.

        You and your corporation are still New York entities because that is where you are. All you've done is doubled your paperwork because you have Wyoming papers and also New York papers to file. Sorry to say but you will still have to pay New York state income tax.

        If you want a Wyoming business be prepared to have a physical location, bank account, employees, etc., and to have work actually done in Wyoming.
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        • Profile picture of the author Kim Standerline
          Maybe I'm missing the point, but I'd guess the difference between the advice Kindsvater gave you and the advice you received from Drew is I'd suspect Drew was trying to sell you something at the time.

          To be honest (but then I'm biased for several reasons), I'd go with what Kindsvator has said anytime

          Kim

          Originally Posted by secrets2010 View Post

          Hi kindsvater it seems you say an LLC or corporation is not going to hide and secure assets for the vast majority of Warriors....however, i really think that drew on that seminar said that it was possible to bulletproof our assets through entitiy structuring...

          So it seems to me that you (kindsvater and drew miles) don't share the same opinion on this....? as far as i can remember drew didn't mention that even with a good entity structuring it was possible to lose all of our assets...

          Regarding:

          "Here is my favorite example as to why an entity will not have this benefit: You have a sole proprietorship. You sell a fraudulent product and get sued. Your personal assets are at risk"

          what if move my personal assets to different entities...? is that even possible?

          thanks
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          • Profile picture of the author JMSD
            Hi Warriors

            Disclaimer - I'm not a lawyer!

            It's clear from a few of the above comments that there is a great deal of misconception/confusion, about the pros and cons of setting up in business as a proprietor (self-employed) or as an incorporated company.

            Clearly one country's laws may not apply to another country and we should all make sure we know the law of the land (local and international) before commencing business either as a sole trader/proprietor or as an incorporated entity.

            As a sole trader (I was one for three years), you are the company and the company is you. If you toe the line (good business ethics and practices), you should be reasonably free from worry although there's no guarantee that someone won't attempt to sue you, if they believe that you have breached some law or other that impacts on their trade/business or loss of income, etc. Even if the case is eventually thrown out, you will still lose a great deal in time, legal fees, frustration, worry and stress, to say nothing of lost business while you are preparing to defend yourself.

            If, however, you attempt to cut corners or breach any laws (whether or not you were aware of them), including those that apply internationally (eg, copyright infringement, intellectual property theft and the like), then it won't matter where you live or conduct your business because the arm of the law is long and you'd better have deep pockets to defend yourself, if you can, or lose everything if the penalty imposed on you by the courts equals or exceeds your personal assets.

            As an incorporated company in the UK, for instance, provided you don't hold 100% of the shares of your company, your liabilities are limited to the assets of the company. Unless the courts can prove that the directors were personally negligent or were responsible for any unlawful action (eg making decisions that cause harm or death to employees or third parties), your personal assets may not suffer although a successful claim may affect the future of the company and, therefore, your livelihood.

            I, personally, have an incorporated company because of the many tax and other benefits/protections that a limited liability provides and which is not available to a sole trader. However, there is still nothing to prevent someone taking out legal action against the company even if the case is ultimately proven to be baseless.

            You cannot eliminate risk of a law suit being brought against you/your company but you can minimise that risk and to do that successfully, you need qualified legal advice rather than relying on any Warrior (that includes me) or any layman's interpretation of the law which may not apply to you or your situation.

            The best advice that anyone can give you is that whether you're trading online or offline, putting everything on a business footing and in accordance with the law will ensure that your business runs smoothly, one hopes profitably, and if you adopt good business ethics and practices, then relatively trouble-free, also. That means not only seeking qualified legal advice before you decide whether or not to go solo or as a company but also playing ball in all things legal, particularly with the taxman (for corporation/personal tax returns, VAT returns [if registered for VAT] and annual accounts), your bank (if you have a loan) and the incorporating body (Companies House in the UK, for instance) who will require annual returns and accounts to be registered with them within set deadlines - missing those deadlines will lead to hefty penalties on the company. If you persist in such delays, you, as the company director, may even be prosecuted for failing to carry out your duties in accordance with law relating to directors. Successful prosecutions can result in additional penalities being imposed and in severe cases (fraud) custodial sentences, also!

            Now, if the above isn't enough to put you off trading in the first place, then you may have what it takes to succeed, so good luck!

            James
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            • Profile picture of the author southwestjoe
              Yeah I know it can be quite scary at the thought of being sued and losing everything. I once attended a financial seminar and one of the guest speakers was Robert Bluhm, J.D. - tax reduction and lawsuit protection.

              I learned so much from him, very reputable person. I'm not sure if he has his own website or not. Definitely worth checking him out. At the seminar he gave an hour and a half's worth of free legal advice. He's got a good sense of humor but he really nails it right on the head. He went over LLC's (not the best option but better than nothing), S-Corp and C-Corp. These other corporations should also be considered. I think he has his own product called the "Asset Protection Kit" or something like that. Supposedly it's VERY good. I'm considering it myself.

              All being said, it is best to consult a business attorney for these matters. Do your homework and it'll pay off. Save yourself and save your assets.
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          • Profile picture of the author secrets2010
            Originally Posted by Kim Standerline View Post

            Maybe I'm missing the point, but I'd guess the difference between the advice Kindsvater gave you and the advice you received from Drew is I'd suspect Drew was trying to sell you something at the time.

            To be honest (but then I'm biased for several reasons), I'd go with what Kindsvator has said anytime

            Kim
            Well marketers who were on that seminar paid like about $3000 or something like that i cant remember exactly...so i guess on top of promoting his services he was telling you some truths...
            of course he was promoting his services...but i guess that he must know what he's talking about....

            actually what he meant to say is that if you know how to structure your business...you will avoing being sued in first place...because the person who will want try to sue you will know that he wont be able to take a lot of assets from you....so he will realize is not worth for him to sue you....

            and again i know that i have to ask for advice to an attorney but i hope this thread makes all warriors aware that they have to consider the legal issues of the online business....many courses miss that part...they show you how to make money but dont tell you that you have to be careful about the legal issues of an online business....
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            • Profile picture of the author Tom B
              Banned
              Originally Posted by secrets2010 View Post

              Well marketers who were on that seminar paid like about $3000 or something like that i cant remember exactly...so i guess on top of promoting his services he was telling you some truths...
              of course he was promoting his services...but i guess that he must know what he's talking about....

              actually what he meant to say is that if you know how to structure your business...you will avoing being sued in first place...because the person who will want try to sue you will know that he wont be able to take a lot of assets from you....so he will realize is not worth for him to sue you....

              Brian can correct me on this...

              You own the company. You also run the company's day to day activities. If you do something illegal or get sued the company can't protect you because you caused the liability by doing something wrong.

              Now if you own a company and hire someone to run the day to day activities like a President, then you are protected against any illegal liability the President caused.

              Most IMers are running the day to day activities and thus won't be protected.

              Disclaimer: I is not a lawyer.
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              • Profile picture of the author JMSD
                This not strictly true. The company is an entirely separate entity from the people (president/directors or call them what you will) running the company and so someone bringing a lawsuit against the company will not affect you, the director, personally. It may affect you if the person bringing the action sues you, personally, also.

                To protect against this, every business person should take out comprehensive commercial insurance which includes personal liability (directors) cover. It's not cheap but it serves to give you peace of mind.

                James

                Originally Posted by Thomas Belknap View Post

                Brian can correct me on this...

                You own the company. You also run the company's day to day activities. If you do something illegal or get sued the company can't protect you because you caused the liability by doing something wrong.

                Now if you own a company and hire someone to run the day to day activities like a President, then you are protected against any illegal liability the President caused.

                Most IMers are running the day to day activities and thus won't be protected.

                Disclaimer: I is not a lawyer.
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                • Profile picture of the author Tom B
                  Banned
                  Originally Posted by JMSD View Post

                  This not strictly true. The company is an entirely separate entity from the people (president/directors or call them what you will) running the company and so someone bringing a lawsuit against the company will not affect you, the director, personally. It may affect you if the person bringing the action sues you, personally, also.

                  To protect against this, every business person should take out comprehensive commercial insurance which includes personal liability (directors) cover. It's not cheap but it serves to give you peace of mind.

                  James
                  Most IMers are a one person company. If that person does something illegal then no company structure will protect them. If that was the case then all we had to do is sell cocaine through companies.

                  Good luck with insurance paying out if you do something wrong.
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                  • Profile picture of the author JMSD
                    Originally Posted by Thomas Belknap View Post

                    Most IMers are a one person company. If that person does something illegal then no company structure will protect them. If that was the case then all we had to do is sell cocaine through companies.

                    Good luck with insurance paying out if you do something wrong.
                    That's an interesting scenario but hardly applicable. We are not talking about someone committing a crime for which no amount of cover will protect you.

                    When setting up a company you are required to indicate the nature of your business. If you then use the cover of your limited liability company to deliberately commit a crime (drug dealing is a serious crime), then of course you, the director/president would be prosecuted and deserve everything that comes your way. And, you're right, no insurance policy would cover you for that.

                    My point was that unless you or your board members have committed a crime (fraud, theft drug running or something of that nature), actions brought against the company will not, necessarily affect your personal assets.

                    I was addressing the original questioner's concerns regarding someone successfully suing them for an illegal act (not all illegal acts or breaches of trading terms are criminal offences)

                    "He talked about entity structuring and about how important is
                    to be set up in such a way that you can keep them from taking it all away.
                    Also I remember he said never hold any business in our own personal name..
                    Basically, I think he was saying that it was possible to bulletproof our assets..."

                    Your insurance policy, if you include director cover, also, will cover legal expenses to defend any claims made against you and will pay out if the claim is upheld by a court of law.

                    The vast majority of cases brought against a company have to do with creditors (people or companies to whom you owe money) who get tired of waiting to be paid for goods or services rendered. Other claims are for negligence (e.g., breach of Health and Safety at Work Act) that cause death or injury to individuals (members of the public or employees). Still more cases (not as common in bricks and mortar type companies but rising for online marketers) are those brought against the company (not the director(s) for intellectual property theft and/or infringement of copyright.

                    Unless you, as a director of your incorporated company commit a criminal act, your personal assets will not be affected.

                    As you rightly say, most IM-ers are one-man/woman bands working as sole traders (self-employed) for whom only the following need be of real concern:
                    1 - infringement of copyright and/or intellectual property theft may become an issue if he/she either inadvertently or deliberately sets out to breach international laws relating to such matters.
                    2 - breaching another operator's trading terms - owing money to creditors (printers, website designers, customers, etc) for which they may be taken to task.
                    3 - Health and safety issues - only if they have someone working in their office/home as an employee or service provider (say the sole trader neglected to repair an obvious tear/break in a carpet/tile over which someone working for the sole trader trips up and injures themselves. Or, if any goods sold are found to injure/poison customers.

                    If the sum total of those claims (if successful) equals or exceeds your personal assets, then as a sole trader, you may stand to "lose everything".

                    Yes, running a sole trader operation is much, much cheaper to set up and run and provided you keep your nose clean, it's a good way to start until your business is on a more secure footing but as already explained, it may leave the sole trader's assets vulnerable against claims. And it won't help that you transfer your assets to a family member in a bid to avoid paying out (unless that transfer took place several years before any claim was brought against the sole trader). Laws on such transfers vary from country to country. In the UK it's seven years, if I'm not much mistaken.

                    Whether or not you choose to set up one type of business or another, is a choice every IM-er or entrepreneur needs to make after considering all the pros and cons of each type and, if at all possible, with the aid of legal advice from a commercial lawyer taken at the very outset. That may cost a few hundred dollars for a brief consultation but worth every cent.

                    I'll add only this from mcmahanusa's post to my final comment on this matter which sums it up more succinctly than all of the above.

                    "You absolutely want the advice of an attorney. But be cautious and ensure that the attorney is experience in the area of asset protection. And he/she must be versed not only in your own country's laws, but also in those of the countries in which you conduct business. Expensive? Yes, possibly. But not doing so can be disastrously expensive."

                    James
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                  • Profile picture of the author DogScout
                    Originally Posted by Thomas Belknap View Post

                    Most
                    Good luck with insurance paying out if you do something wrong.
                    That is what errors and omission insurance is for IF the action was not premeditated.

                    49 of 50 states have 'broken' the 'LL' part of an LLC in singly owned corp.s

                    The cost of defending a suit can be as high or higher than the cost of losing it.

                    The most humorous part of this thread is 1 in 4 will get sued, yet on other threads, only 1 in 20 would even be worth suing. Lol.

                    Here's some 'advice' for ya... put everything in your dogs name. (That ought to rile up the cat).
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  • Profile picture of the author EvolBaby
    It's best to keep one's butt covered in business and in life. There are simple, cost effective protections you can initiate. Coming from a family of lawyers and continuing my law degree I can attest to that.

    However, many people are unaware of these protections and there's a radio program of a friend of mine called "Handel on the Law". He also has a site called LegalZoom: Online Legal Document Services: LLC,Wills,Incorporation,Divorce & More

    Where there are attorneys and forms and tons of advice for the lowest prices going. Everything from copyrights, trademarks, incorporating and more. They even have an affiliate program.

    Get your answers from sound legal advice. You'll find it's far cheaper and very mind settling.
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  • Profile picture of the author ChickenMan
    Only in the US can you sue for anything and I mean ANYTHING. That doesn't mean the person will win though.
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    If money grew on trees, we'd all die from a lack of oxygen.

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  • Profile picture of the author Barry Unruh
    This thread is some of the greatest proof I have ever seen to the advice, DO NOT TAKE LEGAL ADVICE FROM OTHER WARRIORS.

    Holy smokes.....

    Here's the best advice:

    Lawyer and Legal Information : Lawyer.com
    Lawyer, Lawyers, Attorney, Attorneys, Law, Legal Information - FindLaw
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  • Profile picture of the author Jill Carpenter
    Originally Posted by secrets2010 View Post

    well i'm not looking for legal advice...but i find this a very interesting topic...just wanted to know your opinions...
    1. I think someone got your attention with a scare tactic

    2. I think the title of this thread could also be: I don't want to cross the street and get hit by a bus

    3. Don't let this legal stuff stop you from starting a simple business and just getting stuff going. You can always step up the business as your business grows.
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    "May I have ten thousand marbles, please?"

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    • Profile picture of the author Lee MacRae
      "He said that 1 of every 4 people on the seminar would be sued...at the begining of the presentation was very scary.."

      Pay very close attention. You have just received a very valuable lesson in your marketing education. Convince enough people they NEED what you have to sell and you will make a fortune!

      "but then he kept on saying that if we follow his tips we would not be sued..."

      Ask him if he will guarantee that. Ask him if he will put that in writing.:rolleyes:

      "he was saying how risky is running a business and so on."

      As avenuegirl said very well, everything you do in life involves a risk. People who don't have the money to incorporate still start a business every day around the world. Rewards come from risks and you can never eliminate them all. Man up!
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    • Profile picture of the author Kim Standerline
      Absolutely spot on

      The guy was obviously selling something, so he sold it...

      Originally Posted by avenuegirl View Post

      1. I think someone got your attention with a scare tactic

      2. I think the title of this thread could also be: I don't want to cross the street and get hit by a bus

      3. Don't let this legal stuff stop you from starting a simple business and just getting stuff going. You can always step up the business as your business grows.
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      • Profile picture of the author marciayudkin
        1 in 4 people sitting there will be sued
        I've been in business nearly 30 years, and only once was I even remotely threatened with a lawsuit. Most of my colleagues and clients have never been sued, also. I don't believe that statistic.

        Still, I wouldn't say to disregard the warning.

        The most important thing is to inform yourself about the things you might do wrong, that could make other people angry enough to want to sue you. Then avoid doing those things. Keep your promises, most of all.

        Secondly, find out what you can do to keep your personal assets separate from your business assets and to run your business affairs in a prudent fashion.

        And third, do your best to stay away from crazy people. Listen to your intuition and avoid reckless, wild, slimy and dishonest clients.

        Nothing will keep you 100% safe, but the above will certainly help.

        Marcia Yudkin
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  • Profile picture of the author dagaul101
    It's always a good idea to seperate your business from personal assets, so if you are sued, it's the business that loses and not your personal assets
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  • Profile picture of the author Josh Richardson
    Scarcity tactic, and a good one at that. That is a IM'ers worst nightmare. I was always told, worry about the law when your making big money residual per month - theres people who can help you WHEN YOU NEED IT. Getting there is the real challenge.
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