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Article from Mashable. Author – Nellie Akalp
Nellie Akalp is the CEO of CorpNet.com, an online legal document filing service. Nellie helps small business owners form an LLC or incorporate a business. To learn more about Nellie and how she can help your business get off the ground quickly and affordably, please visit here.
Blogging has grown up more quickly than anyone imagined. There are now nearly 163 million blogs worldwide with more than 69 thousand blogs created every 24 hours. But blogging isn’t just the purview of hobbyists; the ever-expanding blog industry features top-performing businesses that bring in serious revenue. Blogs have given platforms to a collection of original voices, provocative opinions and a wealth of knowledge.
Even though blogging has become a serious industry, some new bloggers may not consider its legal aspects. If you’re a self-employed or self-starting blogger, here are some of the key things to keep in mind as you navigate the legal and business aspects of your blog:
Do You Have Liability Concerns?
While running an in-home childcare center or launching a catering business seem like naturally risky professions, it’s hard to imagine that sitting behind a computer can put you at any real risk of a lawsuit. Still, there are some serious liability issues for bloggers. What if you unintentionally plagiarize someone’s work? Or maybe you end up writing about a mobile phone prototype left at a bar? What if you can’t pay your vendors? What happens if you’re fined by the FTC or named in a class-action lawsuit for positively reviewing a defective product?
Most bloggers are probably aware that back in December 2009, the FTC revised their guidelines to bring social media and Internet advertisers into the mix. At the heart of this revision was a concern that it was becoming increasingly difficult to recognize an “advertisement” in social media. In 2010 the ruling reverberated throughout the marketing world and the blogosphere. Controversy surrounded Twitter, high profile celebrities, and improperly disclosed sponsor relationships. As a result, every blogger needs to be aware of the guidelines and take some simple steps to minimize their liability.
Step 1: Disclosure, Disclosure, Disclosure!
Bloggers need to disclose any “material relationship” with an advertiser or brand. This relationship can encompass anything from receiving cash, free tickets, or a free product in exchange for a product review or blog post.
For example, Joe is a video game expert who blogs about his gaming experiences. A manufacturer sends him a free game and asks him to write about it. Accepting this free game creates a material relationship that must be disclosed, or else Joe can face substantial fines. Beyond these legal considerations, disclosure is good practice that maintains a level a trust between the blogger and his or her audience.
Step 2: Talk About What Consumers Can “Generally Expect”
It’s no longer acceptable for an advertiser (or blog review) to make outrageous claims (I made $50,000 last month from home; I lost 50 pounds in 2 months; I look 25 years younger overnight) only to put a “results not typical” disclaimer in fine print. Advertisers and bloggers are bound to disclose results that “consumers can generally expect.” Failure to comply can result in substantial fines, actions by the State Attorney General, consumer protection lawsuits, or consumer-driven class-action suits. In most cases the company itself will be the defendant, but a participating blogger could be named in such a lawsuit.
Step 3: Incorporate or Form an LLC
Most self-employed business owners start thinking about incorporation in order to reduce their tax burden (if you’re paying self-employment taxes, you know what I mean). However, the main benefit of incorporating your blog or forming an LLC is the separation of your personal and business finances, thus minimizing your personal liability.
The LLC and Corporation (either S Corp or C Corp) protects a business owner’s personal assets from any liability of the company. So if your blog happens to be sued or fined, your personal assets, such as property or a savings account, are shielded from any judgment. On the other hand, if you’re sued as a sole proprietor, you’ll be sued personally. This means that your personal assets are at risk.
The other important factor to know is that creditor judgments can actually last up to 22 years. If you’re sued today, your personal assets will still be vulnerable throughout that time period. Keep in mind that, while you might just be starting out without few significant personal assets today, you should be protecting the assets you’ll earn tomorrow.
I’m not a fan of scare tactics, but I am a fan of education. Most likely, you’ll never run into any sort of problems with your blog. However, just in case, it’s best to shield your personal assets through an LLC or Corp, to use some common sense when choosing your advertising/marketing partners, and always to err on the side of transparency.
