#BossBabe? Why before you go into Direct Sales, Network Marketing, or Multi-Level Marketing you should speak with an Attorney.
As social media continues to grow as a ubiquitous aspect of American life, the previously small barrier to entry into a Direct Sales, Network Marketing, or Multi-Level Marketing enterprise has shrunk to almost non-existence. With some initial capital and an Instagram, Twitter, or Facebook Account, an individual can commence their own entrepreneurial endeavor. Like any other business enterprise, there are risks involved. One such risk, just as in any business, is the risk of a lawsuit from customers.
The formation of a business entity can, in certain situations, defend a business owner from having their personal assets be subject to the judgment of a lawsuit. In simpler terms, if a business loses a lawsuit and must pay damages, the business would pay only out of the assets of the business itself and not the personal assets of the business owner. Just filing to form a business entity may not be enough. Florida allows for what is called “piercing the corporate veil” whereby the limited liability protections of a business entity formation are disregarded for certain reasons such as the failure to follow corporate formalities, and a commingling of business and personal affairs.
So while startup may seem easy, the pitfalls can be great without the proper legal advice for how to form a business entity, and how to continue to follow the needed corporate formalities and filings throughout the life of the business entity. Failure to do so can affect not only the business, but the business owner individually.
Author: Matthew D. Pineda, J.D., LL.M., LLMLE
Note: The information in this blog post is provided as a service to the internet community, does not constitute legal advice, and should not be construed as legal advice or legal opinion on any specific facts or circumstances.