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Preliminary Legal Tasks

by PofX
4 replies
Hey Warriors!

First, I would like to thank you all for contributing so much information for noobs like me. I really appreciate it.

I've been lurking for a while and I have found a lot of good stuff so far, but I've finally come up with a question I'd like to ask.

I am starting to suffer from information overload, so I think the best way for me to learn IM is to just register a domain and jump in. The thing is, I'm not sure about the legal issues that I should be looking at before I start a site that involves a monetary exchange.


I thought about creating an LLC before making a site, but I don't know if that would even be necessary.

To provide a little more insight, I plan on creating a small promotional site for an affilliate product. This is mostly an experiment so I can learn the ropes of IM before venturing off into something bigger. I don't anticipate making a large sum of money from this, but in the unlikely event that I do turn a profit, I would like to be covered just in case something goes wrong.

Thanks in advance for any tips!
#legal #preliminary #tasks
  • Profile picture of the author kindsvater
    Congrats on thinking of legal issues before trouble arises. You're already a step ahead.

    If the issue is an LLC or incorporation so you are "covered," keep in mind that you always have personal liability for what you personally do, even if you also have a corporation or LLC.

    But, if your business is using the services of others then having a separate entity can provide some protection if problems arise from what they do.

    For many Warriors, a separate entity provides more tax advantages than liability protection.

    .
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  • Profile picture of the author Walter Parrish
    Originally Posted by PofX View Post

    Hey Warriors!

    First, I would like to thank you all for contributing so much information for noobs like me. I really appreciate it.

    I've been lurking for a while and I have found a lot of good stuff so far, but I've finally come up with a question I'd like to ask.

    I am starting to suffer from information overload, so I think the best way for me to learn IM is to just register a domain and jump in. The thing is, I'm not sure about the legal issues that I should be looking at before I start a site that involves a monetary exchange.


    I thought about creating an LLC before making a site, but I don't know if that would even be necessary.

    To provide a little more insight, I plan on creating a small promotional site for an affilliate product. This is mostly an experiment so I can learn the ropes of IM before venturing off into something bigger. I don't anticipate making a large sum of money from this, but in the unlikely event that I do turn a profit, I would like to be covered just in case something goes wrong.

    Thanks in advance for any tips!
    Firstly I'm no Lawyer.
    Now here we go.

    Since your project is a small one I would just start out with a doing business as, or assumed name, or tradename I don't know how they do it in your state.After the project makes money I would then look into the LLC or Corp thing. Normally what I do is I first get a domain. Then if I think it's going to be something popular I will do the paperwork for a Tradename. Tradenames in Arizona and the equivalent to Doing business as in other places.

    If you have experience with domains and websites go for it. If you don't, realize that's a learning curve.

    btw, I really don't see many legal issues as long as you are using and creating your own materials, and not using anyone elses trademarks or anything. Your doing business as will allow you to setup a bank account, and you really don't have to worry about accounting as a sole proprietorship.

    Only thing I can think is if you are creating some type of membership site make sure your Terms of Service, and agreements cover your butt. I've noticed that many are using these out the box terms, and some are having lawyers drawing theirs up and they understand little or nothing about their own agreements lolol.
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    • Profile picture of the author PofX
      Thank you both very much. I now have the confidence to take the next step.

      (still new to the site... don't know how to send an official 'thanks')
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  • Profile picture of the author Green Moon
    Since you are planning to just use the site to learn the ropes of IM and don't plan to make much money off the site, at least at first, it may not be worth the time, effort and money to set up an entity.

    As kindsvater pointed out, you are always going to be liable for your own actions. Some people mistakenly believe that a corporation or LLC protects them from all liability. That is simply not true. You can find more on that topic at How Limited is Limited Liability?

    A single member LLC is disregarded for Federal tax purposes and all the income and expenses are reported by you exactly as if you were a sole proprietorship, so there are no tax advantages. An S corporation (or an LLC that elects to be treated as an S corp) may have some tax advantages if you have income, but with little or no income, you'll also have little or no tax advantage from taking that extra step.
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