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Ask HN: What is legally required to run a small service-based web application?

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Re: Ask HN: What is legally required to run a small service-based web application?

#41

Post by IgorPartola »

sunchild wrote: post #36
patio11 wrote: post #21

Earlier quoted context omitted.

You have permission to rewrite (any of) mine, if you want them. Wordpress also has theirs available under a very permissive license. NOLO presumably has one available in their books. If you pay a lawyer $1,000 to draft terms of service, your lawyer will have $1,000 more in his pocket than he otherwise would.

IAAL. If you do the self-service route for terms of service, make sure you do your homework. If you do a search/replace on someone else's terms (even those offered under CC or other permissive licenses), make sure you at least run some Google searches on the rationale behind each clause of the terms. There is a HUGE amount of common ground from one site's terms to another's, but you can still get badly burned if you…

I for one would pay a reasonable fee for such a service. So far, I have found http://www.bennadel.com/coldfusion/privacy-policy-generator.... which does exactly what you said: a search/replace of some generic ToS, but reading it I see that almost none of it applies (e.g.: I would have no users interacting with each other and trading goods/services).

Re: Ask HN: What is legally required to run a small service-based web application?

#42

Post by euroclydon »

mgkimsal wrote: post #27

Where abouts in NC are you? I'm in Raleigh, and would be happy to meet up and show you some of how I'm setup. I charge yearly subscriptions for digital content, as well as one-off sales. I use both GC and PP for checking out - no sense in limiting yourself too much, imo. I have sales from around the world, and GC and PP have covered the overwhelming majority of those sales. EDIT: Ahh... you're in Durham. I've got to…

Hey, I live in Durham and I'm incorporated as an S-Corp, which can have some advantages (just don't let tptacek hear you talking about them). I'm friends with your boss at TransLoc too. It would be nice to meet up sometime and talk shop. joshua.pearce at that google mail service.

Re: Ask HN: What is legally required to run a small service-based web application?

#43

Post by edw519 »

patio11 wrote: post #11

You don't need a legal structure to charge people money. Sole proprietorship is the most common form of business in the United States -- by quite a large margin. For example, BCC is structured as a sole proprietorship: when someone pays me for bingo cards, they're really paying me for bingo cards. You will probably find that no B2C customer actually cares about the structure of your business, legally. Your website de…

With regards to liability: your main defense against liability is not your corporate structure or your terms of service. It is not pissing anyone off so bad that they decide to sue you.

I agree that "doing good" is necessary but unfortunately, not sufficient legal protection.

You're overlooking those whose business model is "revenue by lawyer". There are scumbags out there who haven't figured out how to make money legitimately, so they just sue the most likely target. Paying them off is often more cost effective than prevailing in court, regardless of the merits of their case. I know one who kept his small business alive for 3 years with a settlement from a large corporation who just wanted him to go away.

If may not matter now, but once you're big enough, they will find you. Make sure your legal moat is in place ahead of time.

Re: Ask HN: What is legally required to run a small service-based web application?

#44

Post by gyardley »

mgkimsal wrote: post #26
haploid wrote: post #12

Why paypal/google instead of a real payments gateway like authorize.net?

PayPal and Google have an extra level of trust built in to them from a customer POV.

Really? Perhaps I'm atypical, but PayPal as your payment option always struck me as amateur hour. Not enough to keep me from buying, but it doesn't inspire trust.

If PayPal really enhanced customer trust, I'd expect to see more large retail corporations using it as a payment option.

Re: Ask HN: What is legally required to run a small service-based web application?

#45

Post by dave1619 »

sunchild wrote: post #36
patio11 wrote: post #21

Earlier quoted context omitted.

You have permission to rewrite (any of) mine, if you want them. Wordpress also has theirs available under a very permissive license. NOLO presumably has one available in their books. If you pay a lawyer $1,000 to draft terms of service, your lawyer will have $1,000 more in his pocket than he otherwise would.

IAAL. If you do the self-service route for terms of service, make sure you do your homework. If you do a search/replace on someone else's terms (even those offered under CC or other permissive licenses), make sure you at least run some Google searches on the rationale behind each clause of the terms. There is a HUGE amount of common ground from one site's terms to another's, but you can still get badly burned if you…

I'm looking for that service. What are your qualifications and how can I contact you?

Re: Ask HN: What is legally required to run a small service-based web application?

#46

Post by mgkimsal »

gyardley wrote: post #44
mgkimsal wrote: post #26

Earlier quoted context omitted.

PayPal and Google have an extra level of trust built in to them from a customer POV.

Really? Perhaps I'm atypical, but PayPal as your payment option always struck me as amateur hour. Not enough to keep me from buying, but it doesn't inspire trust. If PayPal really enhanced customer trust, I'd expect to see more large retail corporations using it as a payment option.

many people keep money in there and treat it almost as virtual currency. They can just use paypal money to pay, it's secure, etc.

There's a whole class of people who can't get a credit card in the first place, but they can use paypal tied to their bank and move money in.

Paypal is more universal around the world than most other cards. Someone may have a JCB card or a Switch card - my standard merchant account gives me a harder time with those, and charges me a heftier fee, and in some cases I can't take 'overseas'-based cards at all (Solo cards, for example) - but those people in those countries can use PayPal - and they do with me.

Re: Ask HN: What is legally required to run a small service-based web application?

#47

Post by larrik »

bradleyland wrote: post #38
patio11 wrote: post #34

Earlier quoted context omitted.

So, having looked into this a few times, my personal opinion is that a quickie instafigleaf will wilt like the fig leaf it is under legal scrutiny. Regardless of whether it is a LC or not, my software business has substantially less in assets than a taco truck, and any tortious behavior it carries out is definitionally certain to have been carried out by me personally. My expectation is that a lawsuit means I get hel…

That's a valid point regarding partners and mitigating risk. If you're a one-man company, it's a lot easier to manage the risks, so forming a corporation may be superfluous. I think it depends on your product as well. The chances of being sued while providing a simple product like bingo cards is minimal. If you're providing a service to businesses, you stand a much greater risk of being sued. It's all a balance. BTW,…

I'm not a lawyer, but I've been lead to believe that in the US at least, if you are the only member of your company (which I believe Patrick is), then no corporate structure is going to to protect you from liability. I think even with only 2 people it's a bit iffy (especially if the other person is your spouse).

If you are by yourself, Sole Proprietor is easier and simpler for taxes and the like. LLC is more complex and may offer NO extra liability protection.

Re: Ask HN: What is legally required to run a small service-based web application?

#48

Post by damoncali »

sunchild wrote: post #36
patio11 wrote: post #21

Earlier quoted context omitted.

You have permission to rewrite (any of) mine, if you want them. Wordpress also has theirs available under a very permissive license. NOLO presumably has one available in their books. If you pay a lawyer $1,000 to draft terms of service, your lawyer will have $1,000 more in his pocket than he otherwise would.

IAAL. If you do the self-service route for terms of service, make sure you do your homework. If you do a search/replace on someone else's terms (even those offered under CC or other permissive licenses), make sure you at least run some Google searches on the rationale behind each clause of the terms. There is a HUGE amount of common ground from one site's terms to another's, but you can still get badly burned if you…

I'd pay $200-400 for the TOS/PP. Maybe more if my business were on the more complex/risky side.

Re: Ask HN: What is legally required to run a small service-based web application?

#49

Post by damoncali »

larrik wrote: post #47
bradleyland wrote: post #38

Earlier quoted context omitted.

That's a valid point regarding partners and mitigating risk. If you're a one-man company, it's a lot easier to manage the risks, so forming a corporation may be superfluous. I think it depends on your product as well. The chances of being sued while providing a simple product like bingo cards is minimal. If you're providing a service to businesses, you stand a much greater risk of being sued. It's all a balance. BTW,…

I'm not a lawyer, but I've been lead to believe that in the US at least, if you are the only member of your company (which I believe Patrick is), then no corporate structure is going to to protect you from liability. I think even with only 2 people it's a bit iffy (especially if the other person is your spouse). If you are by yourself, Sole Proprietor is easier and simpler for taxes and the like. LLC is more complex…

That's not quite true - I'd research that a little more.

As far as taxes, a single member LLC can be classified as a "disregarded entity". In that case, the taxes are treated exactly as they would be for a sole proprietorship. The additional complexity of an LLC is just the state franchise taxes (which are usually quite low or zero at first) and a couple of documents - it's not a big deal.

Re: Ask HN: What is legally required to run a small service-based web application?

#50

Post by bradleyland »

larrik wrote: post #47
bradleyland wrote: post #38

Earlier quoted context omitted.

That's a valid point regarding partners and mitigating risk. If you're a one-man company, it's a lot easier to manage the risks, so forming a corporation may be superfluous. I think it depends on your product as well. The chances of being sued while providing a simple product like bingo cards is minimal. If you're providing a service to businesses, you stand a much greater risk of being sued. It's all a balance. BTW,…

I'm not a lawyer, but I've been lead to believe that in the US at least, if you are the only member of your company (which I believe Patrick is), then no corporate structure is going to to protect you from liability. I think even with only 2 people it's a bit iffy (especially if the other person is your spouse). If you are by yourself, Sole Proprietor is easier and simpler for taxes and the like. LLC is more complex…

Well, as I have learned, anyone can sue you at any time. I could file a lawsuit against you right now, and you'd have to answer it in court. I've also learned that there are no absolutes. An LLC/S-Corp/C-Corp does not offer absolute protection, but it's not worthless either. There are "tests" that pass or fail, and that determines your individual liability.

In our case, the impression I have developed is that if you're acting in the course of business, and you're acting in good faith, your corporation stands a good chance of protecting you. If you set up a corporation for the purposes of protecting yourself while screwing people over, your corporation probably will not protect you. The possible number of scenarios is far to broad to express as a "protection/no protection" dichotomy.

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