Dozier Internet Law: Top Five Tips For Start-Ups To Protect Assets

The calls come into Dozier Internet Law regularly...even during this economic downturn. "I want to start up a new web business and I need to make sure it is legal" is a typical inquiry. That's likely impossible, I respond, unless you are going to be so passive as to be non-competitive. No one knows where all of the lines are drawn yet, and everyone who is competitive learns to stay away from "blackhat" and clearly illegal activities but at the same time not limit tactics to "white hat" and clearly legal activities. If you operate in a clearly illegal arena there is a small (but not insignificant) chance of getting in a lot of serious trouble, and if you operate in a very safe manner, there is a high probability your business will be non-competitive and fail. So most online businesses operate in the gray area.

That's a fact. That's reality. And therefore a successful online business (there are some exceptions, of course) carries with it inherent risk to your body, mind, soul, spirit, reputation, money and freedom. 

If you are young, carefree, and think you have nothing to lose, then your appetite for risk could be high. If you have a family, are moving towards retirement, have some savings and a reputation, then your risk profile might be very low...you don't want to assume much risk. If you are in the later category, consider these five tips from Dozier Internet Law:

1) Incorporate in Nevada or Wyoming. In Nevada you can hide your identity (like a mob controlled Casino front-man) and both states offer strong protections for an individual owner of a corporate entity.

2) Move to Florida or Texas. Both states have generous "homestead exemptions" that will usually allow you to hold onto your house if you have to hide from creditors or file bankruptcy.

3) Move all of your assets into either your wife's (or husband's) name or make sure property (real and personal) is held as a joint tenancy with the rights of survivorship (tenants by the entirety) so your share cannot be taken. And while you are at it, consider opening overseas bank accounts in some select countries that have a particularly strong view on privacy.

4) Consider leaving the US and operating overseas from a country that will offer you strong protections.

5) Establish business relationships with partners outside the US and not subject to subpoenas or extradition so they cannot be forced to testify against you....Caribbean and Central America are popular options this time of year, but certain anti-US Russian states are best. 

Or, get a really, really good Internet law lawyer, and use his guidance to help you navigate through the minefields. And when someone comes along and says that Dozier Internet Law is crying wolf and trying to scare people into hiring a lawyer, just the opposite is true. For the great majority of new start-ups on tight budgets being started by mature professionals whose careers have been interrupted by tough economic times, I'm suggesting you find an off-line business idea. A lower risk investment. Like mortgage backed securities... 

Capice???

Comments

[Elise Whitworth]

This is hilarious. : -)

Is there generally a best legal structure for internet businesses?

Specifically, an umbrella company providing administrative, marketing and fulfillment service to multiple subsidiaries (one subsidiary is basically a website with its own budget & sales staff). So there would be two legal entity types here; the umbrella and then its subsidiary.

Thanks!

[Dozier Internet Law]

Elise:

The "double incorporation" or "chinese wall" approach has some merit. It does create another line of defense since it is harder to get through to the individuals involved. But given the nature of most web businesses, it would usually not be difficult to "pierce the corporate veil" multiple times in multiple directions, which means this won't be very effective. And no matter how many layers of corporate protections exist, the individuals who actually pushed the button, so to speak, on alleged illegal actions will always have liability for those acts. It is almost impossible to shield individual misconduct by incorporating, in other words.

[amanda]

You seem to be very truthful. Thank you for your thoughts and facts.

[freelance graphic design jobs]

When looking at the internet as a possible source of a business venture, there is so much to go through, and so much junk and garbage that the frustration alone can make you want to quit even before you start!