trends

Legal Considerations of Starting an Online Business

While one of the most costly aspects of developing your Internet business plan is the obtainment of qualified legal advice, the failure to do so can be even costlier. For some startups, however, the price of even a single hour with one of the industry's best attorneys is prohibitive — causing some prospective business owners to turn to industry message boards and/or the seminars offered at various webmaster gatherings for the extent of their "legal advice."

For these budget-minded operators and for others who will be seeking one-on-one counsel and want to know the right questions to ask in order to maximize their paid consultation time, a new educational option is now available — an informational DVD titled "Legal Considerations of Starting an Online Business."

Produced by and featuring attorney Dan Pepper of the Pepper Law Group (www.informationlaw.com), the disc offers an authoritative overview of several of the most important aspects of starting a new business, with a tight focus on Internet-based entrepreneurship.

"So you've decided to start your own Internet business. Now wouldn't it be great if you could find ONE source to learn about the legal issues you need to consider when starting this type of business?" Pepper's website promoting the DVD program asks and then quickly provides the answer: "Congratulations, you just found it!"

According to the PLG website, Pepper has represented dozens of online businesses and regularly instructs entrepreneurs on the techniques of forming businesses; using that experience to walk his video's viewers step-by-step through these important processes.

A substantial portion of the program is devoted to explaining the differences between sole proprietorships, partnerships, subchapter "C" and "S" corporations, and the "LLC" or limited liability company; and although this material may seem basic to some viewers (as it is intended to be), those without any formal business training will find it invaluable.

More knowledgeable viewers will appreciate Pepper's informative tips about how the structure that you use to form your company will affect your tax situation; your personal and business liability; your costs; and the level of management control, ownership and administrative ability that you'll have with each — including ways in which owners can help protect their personal assets from debts, lawsuits and other judgments.

Also covered are factors relating to the continuity and transferability of your business — vital considerations for those planning on selling their company someday — as well as the "double tax" problems associated with certain business entities.

Once you've setup your online business entity, it's time to build a website, and here Pepper provides ample advice that can save an unwary website owner anything from a few hundred dollars to the loss of their entire website, which they may not really own…

For example, among his selection of tips to ensure that you actually own everything in your website, Pepper advises the use of "work for hire" contracts with developers and others that may have a claim on "your" website — otherwise, your designer could be the real owner of the actual website (or at least its graphics, layout and the underlying code) — just as a photographer (operating without a work-for-hire specified contract) owns the photos he takes — whether you are the one paying him to take them and paying the models to pose for them.

Issues of joint authorship and the clearance of rights to graphical and other elements used by the designer which may be subject to someone else's copyright was also covered.

"Trademark law protects both businesses and consumers," Pepper said as he went on to detail the difference between copyrights, patents and trademarks; how registering them provides for maximum protection; ways in which these intellectual property laws can be used to help prevent others from "stealing your ideas, logo, text, graphics, and website;" and how these laws may apply to your domain name and/or your website's slogan.

One of the common misconceptions the attorney addresses involves the relationship between domain names, trade names and trademarks; and how the assignation of rights to one doesn't necessarily confer rights to the other.

The use of Website Development Agreements was also discussed, including the concept of "objective acceptance testing" as a tool for paying your website developer at logical milestones in the site's progress.

The subject of agreements received a lot more attention, shifting over to the "NDA" or nondisclosure agreement, which governs the sharing of confidential information, such as you might share with your developer or other party.

Pepper advises viewers to minimize the number of NDA's they enter into to help protect the secrecy of their projects. "The best way to keep a secret is not to tell anyone," he said. "You can't get the toothpaste back in the tube."

The essential ingredients of your website's terms of use and how to avoid some of the common mistakes operators make was also detailed. Pepper describes these terms as a contract between a website's owners and its visitors, governing who is allowed to use the website and what those permitted uses are. The impact of the Uniform Commercial Code (UCC), implied warranties, and other areas of concern are discussed; and a warning given about copying another website's terms of use to use on your own website — a seemingly popular practice that leaves owners with a false sense of security over a set of terms that may very well not cover their site — and to make matters worse, provides the evidence of your intentional infringement of someone else's copyrighted material …

Pepper also offered information on how the crafting of a site's terms can help its owners avoid some of the responsibility for what users post on a website.

"It is vital to incorporate site submission rules and limits of liability into the user agreement," Pepper said.

The attorney also went on to discuss how many privacy policy statements don't accurately reflect the site's information usage practices and the special challenges that COPPA legislation places on certain Internet businesses in order for them to comply with federal law.

Finally, Pepper stressed the importance of the human factor in a business enterprise.

"It all starts with you as the entrepreneur" he said, before discussing the value of mentors and the need for cultivating relationships as steps on the road to success.

As Pepper's website states, his DVD provides: "Practical, easy to understand tips you can use immediately to get your Internet business off the ground." After watching it, I have to agree. If you need some good, basic legal information to help plan and execute your own business, and a primer for discussions with your own attorney, then this DVD is for you. Check it out on Amazon.com today.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

opinion

The SCREEN Test: How to Prepare for Federal Age Verification

For those who are counting, there are now 20 enacted state laws in the United States requiring age verification for viewing online adult content, plus numerous proposed laws in the works. This ongoing barrage has been exhausting for many in the adult industry — and it may be about to escalate in the form of a potential new AV law, this time at the federal level.

Corey D. Silverstein ·
opinion

How to Master Team Dynamics for Business Success

Having the right team in place is everything. Whether getting a startup off the ground and thriving, or safeguarding an established company, the right — or wrong — people can mean the difference between a successful venture and a failed dream.

Juicy Jay ·
opinion

Eight Steps to Fast-Track AI Site Approval for Processing

Artificial intelligence is a hot topic these days. AI technology is speeding up the way we do business across all industries and offers numerous benefits, from automating processes to increasing efficiency and scalability.

Cathy Beardsley ·
opinion

How to Secure High-Risk Transactions With Network Tokenization

Ensuring the security of data as it moves through digital channels is the foundation of safe transactions, and crucial for your success. If your business can’t secure transactions, you’re exposed to myriad processing traumas.

Jonathan Corona ·
profile

Lea Lexis On Challenging the Porn Status Quo

Lea Lexis doesn’t just aim to make movies — she wants to craft experiences. Bending the rules of what’s possible in moviemaking with the precision of a true auteur, the performer-turned-Brazzers producer has helped shape some of the industry’s most striking and boundary-pushing productions.

Jackie Backman ·
profile

WIA Profile: Reba Rocket

As chief operating officer and chief marketing officer of Takedown Piracy, long at the forefront of intellectual property protection in adult entertainment, Rocket is dedicated to safeguarding the livelihoods of content creators and producers while fostering a more ethical and sustainable industry.

Women In Adult ·
opinion

Protecting Content Ownership Rights When Using AI

In today’s digital age, content producers have more tools at their disposal than ever before. Among these tools, artificial intelligence (AI) content generation has emerged as a game changer, enabling creators to produce high-quality content quickly and efficiently.

Corey D. Silverstein ·
opinion

How Payment Orchestration Can Help Your Business

An emerging payment solution is making waves in the merchant world: the payment orchestration platform (POP). It’s quickly gaining traction as a powerful tool for managing online payments — but questions abound.

Cathy Beardsley ·
opinion

Fine-Tuning Refund and Cancellation Policies

For adult websites, managing refunds and cancellations isn’t just about customer service. It’s a crucial factor in maintaining compliance with the regulations of payment processors and payment networks such as Visa and Mastercard.

Jonathan Corona ·
profile

WIA Profile: Laurel Bencomo

Born in Cambridge, England but raised in Spain, Laurel Bencomo initially chose to study business at the University of Barcelona simply because it felt familiar — both of her parents are entrepreneurs. She went on to earn a master’s degree in sales and marketing management at the EADA Business School, while working in events for a group of restaurants in Barcelona.

Women In Adult ·
Show More