Legal Process for Producing/Distributing an E-Book?

[shultzlpu]

Hello everyone! To my understanding, just putting in a "user agreement" or "terms of use" sometime during pre-purchase is not enough to limit my liabilities when marketing a "how to" e-book.

Can someone please tell me all of the legal process that I need to undergo before I publish and sell an instructional e-book please? Do I need to form an LLC?

Thanks in advance
Adam Shultz

[InterShark]

Laws vary from state to state and country to country, it is probably best to consult with an attorney that specializes in online business to find out where you stand legally.

We have several attorneys on retainer including some that deal exclusively with internet businesses, IP and intellectual property rights as well as 'standard' legal issues and in our minds it is money well spent.

Legal advice gained on an internet message board is worth exactly as much as you pay for it

Would you feel comfortable standing up in court explaining to a judge how you made your business decision based on a post on an internet message board or, do you think you would look foolish in doing so?

That being said, you may want to get in touch with Chad Belville ( http://www.chadknowslaw.com ) he is a competant attorney that we have used for various licensing issues in the past when it came to online digital content and media.

In terms of having to form an LLC, if you are making money online, you should already have an LLC formed, you are afforded much more protection should something go wrong with your online ventures than if you didnt have an LLC or Corporation setup.

But, like i said, this 'legal' information is worth exactly what you paid for it as of right now.

[InterShark]

Below is an article that one of our company founders wrote several years ago you might be interested in reading too... Im going to start posting some more of these articles over the coming weeks too on a range of topics relevant to doing business online....

Business Corporations - The Basics.

For many webmasters there will come a time, whether on the first day in the industry or a few weeks or months after you start, that, you want to set up a business structure for your adult ventures however, with so many different types of corporate structures available which type of corporate structure will best fit your needs? This is what we will take a look at in this article.

General Corporations.

A general corporation, also known as a “C” corporation, is the most common corporate structure. A general corporation may have as many stockholders as it likes. Consequently, it is usually chosen by those companies planning to have more than 30 stockholders or large public stock offerings. Since a corporation is a separate legal entity, a stockholder's personal liability is 'usually' limited to the amount of investment in the corporation and no more.

Close Corporations.

A close corporation is most appropriate for the individual starting a company alone or with a small number of people. There are a few differences between a general corporation and a close corporation. A close corporation limits stockholders to a 'maximum' of 30. In addition, many close corporation statutes require that the directors of a close corporation must first offer the shares to existing stockholders before selling to new stockholders. Not all of the states in the US recognize close corporations so you should check if you are eligable to open a close corporation in your locale.

Subchapter S Corporations.

A Subchapter S Corporation is a general corporation that has elected a special tax status with the IRS after the corporation has been formed. Subchapter S corporations are most appropriate for small business owners and entrepreneurs who prefer to be taxed as if they were still sole proprietors or partners. When a general corporation makes a profit, it pays a corporate income tax on the profit. If the company also declares a dividend, the stockholders must report the dividend as personal income and pay more taxes than what they would pay as individuals. S Corporations avoid this "double taxation" (once at the corporate level and again at the personal level) because all income or loss is reported only once on the personal tax returns of the stockholders. For many small businesses, the S Corporation offers the best of both worlds, combining the tax advantages of a sole proprietorship or partnership with the limited liability and enduring life of a corporate structure.

S Corporation Restrictions.

To elect S Corporation status, your corporation must meet specific guidelines as detailed below.

1) All stockholders must be citizens or permanent residents of the United States.
2) The maximum number of stockholders for an S Corporation is 75.
3) If an S Corporation is held by an "electing small business trust," then all beneficiaries of the trust must be individuals, estates or charitable organizations. Interests in the trust cannot be purchased.
4) S Corporations may only issue one class of stock.
5) No more than 25 percent of the gross corporate income may be derived from passive income.

Not all domestic general business corporations are eligible for S Corporation Status as such you should check with a lawyer to find out if your business is eligable to become an S corporation in your local state.

Limited Liability Company.

The LLC is not strictly a corporation, however it offers many of the same advantages. Many small business owners and entrepreneurs prefer LLC’s because they combine the limited liability protection of a corporation with the "pass through"" taxation of a sole proprietorship or partnership.

Corporations - An Overview.

For the most part, the information provided above will allow you to decide almost immediately of the type of business structure you want to setup however, as with many other things of this nature, you should always consult with a qualified lawyer or accountant when it comes to setting up your businesses.

Article written by Lee.

[shultzlpu]

WoW that's a lot of great info! Thanks a ton - pretty much everything I am looking for. muchos reputation points to you my friend

[InterShark]

You are welcome, happy to help where i can