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How many of you consult a lawyer for your IM Business?

by yourreviewer
18 replies
Hello guys,
I would like to know how many of you consult your lawyer for your IM Business. Mainly I would like to know about the following

- Do you incorporate your business? For beginners who are just starting out are there are any cheap resources to utlise?
- Do you have a lawyer for your business? How much would the costs be for hiring a lawyer?
- How often do you consult your lawyer? For every new product that you release?

I have always been an super ultra conservative Internet Marketer (you can call me 'sueophoblic') and I have shied away from doing many things (WHITE HAT OF COURSE) because I am scared of being sued.
#business #consult #lawyer
  • Profile picture of the author yourreviewer
    Any one care to share your thoughts please?
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  • Profile picture of the author JayMartins
    I consulted a lawyer to check over some terms and conditions for a venture that I was starting a while back but he said I needed someone that understands the Internet.

    None of the local ones understand it!
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    Case Study: Offline marketing brings in $6116 every month
    Successful Membership Website / Offline Money / Custom Wordpress / Squeeze Pages
    I charge very cheap rates by PayPal if you need any of the above. Just PM me and we can talk.
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    • Profile picture of the author yourreviewer
      So is there a specific kind of lawyer whom Internet Marketers should refer to?
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  • Profile picture of the author Scott Million
    I just had my first lawyer experience a couple days ago. He's setting up an S-corp for me. It's definitely not cheap and I wouldn't invest in that until you're making at least a $1,000 or so profit online each month.

    On the other hand, my 2008 taxes have been a nightmare since I mixed personal with business expenses/funds.

    I got through it okay (12 or more hours!), but an easy way to get around this without paying lawyer fees is to just open up a bank account for all your online expenses and payments received.

    Once you're rolling in the dough look to an LLC or S-corp. There are a lot of tax advantages to those. I went with S-corp over LLC in New York only because we have a bogus law that an LLC must advertise twice a week for 6 weeks in local newspapers announcing that basically you're opening up shop and not taking any responsibility. The fees for that are very high...unless you're good at pitching Public Relations (where the announcements would be free).

    Remember that you'll need to pay an accountant as well for setting up an LLC or S-corp. For an S-corp you're looking at $1000+ for lawyer, processing fees, and an accountant.

    For an LLC the fees are much less to setup, but depending where you live it might cost you more if you are forced to advertise.

    Bottom line...consult an accountant. They'll give you an hour free consultation.

    Scott
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    • Profile picture of the author Scott Million
      Oh yeah, keep in mind that depending on your state (if in US), your taxes will significantly increase as a self employer.

      If you profit $50,000 in New York as an employee, your taxes will be around 25-30%, but being self employed you're looking at 40%.

      Social security and self employment tax are about 15% anywhere in the US. As an employee your employer pays 1/2 of the social security for you...say goodbye to that!

      I gotta get out of here, man. New York State income tax is almost 9%...my Dad say, "Move here to Austin, TX. It's 0%"

      Lol...I'm seriously considering.
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    • Profile picture of the author mrspencer
      you can save on lawyer fees if you look around. Here's the basic benefits that are offered, from a service I found about a year ago.

      - Free Preparation of a will (normally costs $300 - $800).
      - Unlimited telephone consultations for personal and business matters.
      - Letters written on your behalf to a third party. (Including Debt Collection letters)
      - Legal document review up to 10 pages.
      - Assistance for moving traffic violations.
      - Up to 60 hours of Trial Defense Services - increases to a maximum of 335 hours after 5 yrs.
      (Just to give you an idea on 335 hours...O.J. Simpsons first trial was about 300 hours)
      - Up to 50 hours in IRS Audit Services.
      - 24 hour access lawyer assistance if you are arrested or detained.
      - 25% discount off the Provider Law Firm's standard hourly rate for all other services
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  • Profile picture of the author Mark Brian
    That sucks Scott.

    Now I wonder how does setting businesses in "tax haven" countries suppose to work?
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    • Profile picture of the author Scott Million
      Originally Posted by Mark Brian View Post

      That sucks Scott.

      Now I wonder how does setting businesses in "tax haven" countries suppose to work?
      Oh yes, part of the bag for the great empire state!
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  • Profile picture of the author globalpro
    Mark,

    You would need to check on the specific laws of your state concerning 'safe haven' set ups. Each state has laws that affect you if you live there that overide the laws of 'safe havens'.

    I checked into do this with a Nevada corp and found there may be some issues with where I live. Figured out to do it in my home state.

    Thanks,

    John

    PS I got that info from an attorney.
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    • Profile picture of the author jason1uk
      not a lawyer - but my girlfriends an accountant
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      • Profile picture of the author yourreviewer
        Sorry folks. I didn't even have the courtesy to thank you all for your contributions.
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        • Profile picture of the author timpears
          For stuff like this, Prepaid Legal is perfect, in my mind. The cost is miniscule and the benefit can be tremendous. I was a member for a long time before I decided to start marketing it just a short time ago. It has helped me tremendously and well worth the few dollars it costs me each month. I am not qualified to sell the business plan as I have to take a class for that. But even the family membership will cover a couple of business items in most states. A call to the legal firm will find the correct lawyer for the field you need, and if one is not on staff they will find one in their network.

          The business plan covers a lot of extra stuff to advise you on the best course for your business. I don't want to sound like a commercial but it is a hell of a set up for the money.

          If you want to ask me any questions about it just PM me. Like I said, I can't sell the business plan because I have not taken the class so I will not be trying to sell you anything. But then I could take the class online so if you want to twist my arm...
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          Tim Pears

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          • Profile picture of the author timpears
            Doug,

            Florida has no state income tax so that shouldn't change. New York is a different matter however. The 15% for payroll taxes should not change with the incorporation as you are liable for that no matter if you are working under your own name or as a corporation. A lot of folks try to skip out on that but if you get caught it can mean penalties. If you get it fo work performed you owe it. If you try to hide it by taking the money as a stock dividend and the US Treasury decides you are fudging they will whack your knuckles.

            Please understand that I offer this not as legal or CPA advice as I am neither. This is just information that I have accumulated from talking to knowledgeable people. Please seek competent advice from the proper channels.
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            Tim Pears

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  • Profile picture of the author webpromotions
    Scott...maybe its just a 'New York' thing, but I'm in Florida and just recently had the 'lawyer' discussion and decided to incorporate.

    My lawyer is not only a professional corporate tax attorney, but also a CPA.

    My taxes have not increased...and he was pretty specific that in my situation (since I have no employees and just sell online services via the internet), I needed to incorporate for just 1 reason: personal asset protection

    Other than that, there would be little difference than if I'd just continued to operate as a personal 'dba'.

    Again, maybe its a state thing, and of course while it doesn't hurt to ask for advice on this in a forum, you really need to speak to an attorney in your area before taking any real action.
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  • Profile picture of the author Tsnyder
    I have a Pre-Paid Legal membership... wouldn't be without it.
    I talk to my lawyers all the time... consultations on any subject,
    personal or business, are included in the low monthly fee.

    Tsnyder
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    If you knew what I know you'd be doing what I do...
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    • Profile picture of the author kindsvater
      Interesting thread with many issues ...

      Your taxes should not go up by having your own business. Instead, they should dramatically decrease due to all the deductions you can now take. For example, your Internet connection. If your taxes are up see a CPA because your business structure is not correct, or something is seriously amiss.

      If your lawyer recommends that a one-person Internet business should incorporate for asset protection, that lawyer should IMHO, be your ex-lawyer. The reason is that you are personally taking all the actions, so if there is any liability both you and the corporation get sued and have liability. There is no asset protection. Asset protection is viable in instances, for instance, where someone slips and falls on a spill in your waiting room. Unless you caused the spill you don't have individual liability, although your business would. In IM, for example, if you fraudulently advertise a product, but are incorporated, you still have liability because it is you personally who engaged in the fraudulent conduct.

      Think of this currently in the news - Bernie Madoff is facing severe personal liability even though I'm guessing his $50 billion ponzi scheme was run through a corporation.

      Try this - ask for a defense and indemnity guarantee - where your lawyer or whoever agrees to defend and indemnify you (you want both) in the event you are found to have personal liability even though you are incorporated.
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      • Profile picture of the author webpromotions
        Originally Posted by kindsvater View Post

        If your lawyer recommends that a one-person Internet business should incorporate for asset protection, that lawyer should IMHO, be your ex-lawyer. The reason is that you are personally taking all the actions, so if there is any liability both you and the corporation get sued and have liability. There is no asset protection. Asset protection is viable in instances, for instance, where someone slips and falls on a spill in your waiting room. Unless you caused the spill you don't have individual liability, although your business would. In IM, for example, if you fraudulently advertise a product, but are incorporated, you still have liability because it is you personally who engaged in the fraudulent conduct.

        Think of this currently in the news - Bernie Madoff is facing severe personal liability even though I'm guessing his $50 billion ponzi scheme was run through a corporation.

        Try this - ask for a defense and indemnity guarantee - where your lawyer or whoever agrees to defend and indemnify you (you want both) in the event you are found to have personal liability even though you are incorporated.
        Hmmm. I guess I need to make an appointment monday...your comment does seem to make a lot of sense.
        Not sure if it makes a difference, but I have much more 'personal' money than money that my business has generated...before I even started it. I assumed thats what his main focus was on.
        However, he did tell me that it makes a big difference how I operate things. For example, EVERYTHING needs to be done thru the 'company' to keep things seperate. Like even me making a payment for a business thing with a personal account...or receiving business payments to a personal account, etc. Said I have to make sure everything is treated as two seperate entities (me vs my company) in ALL of my actions.

        Thanks for the info. I've seen a lot of your posts here and you definitely seem to know what you are talking about. I need to have another talk w/ him I guess and get some clarification.
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  • Profile picture of the author jrapisarda
    Great topic... I've been thinking about this as well. Any suggestions for a good pre-paid legal service?
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