

Ask HN: Need of a legal structure for a website that makes money on autopilot? - dkb

Hi all,<p>I have been building a little website that I was thinking of putting online for free, and eventually make some money out of it with Ad Words depending on how well it is doing. Do I need a legal structure to do that?<p>I very often see posts on HN about people having some sort of website on autopilot, generating money. When I see those, I always wonder how people manage to legally &quot;cover themselves&quot;. Cover themselves against what you may ask... let me explain. I will not enter into details about what the website does, but I will give an example that will be close enough so I can explain my concerns.
Let&#x27;s say that I build a website that allows users to create their groceries lists. Users can then see theirs list, edit them, delete them, etc...<p>This implies a few things:
- Users have to register, which means I will have to at least store information such as an e-mail address for password reset, and a password.<p>- I will also have to store the groceries list themselves.<p>Is there anything else I would HAVE to legally store? For example, I have seen a few website stipulating that you need to be over 13 years old in order to register, is that something that anybody owning a website would have to store and verify as well?<p>Also, what if your website doesn&#x27;t deliver what it says it offers? For example, imagine that the groceries list get messed up (I know... stupid example), and that some of the items don&#x27;t appear on the list...<p>If a website is generating money with Ad Words, does this mean that you HAVE to have a legal structure? What if you provide a &quot;service&quot; such as the groceries list?<p>Does the fact that using the website is free changes any of those concerns?
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iancarroll
Being vauge really doesn't help, but alas... I'm not a lawyer, but:

\- You need to be in compliance with COPPA, which means you don't collect info
from children under the age of thirteen without parental consent

\- Your terms of service should protect you from whatever bad things happen if
your groceries get lost

\- You don't have to store anything else unless you're dealing with
financially related things (banking, stocks, etc)

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dkb
So no need to incorporate? Is it pretty much like having a blog?

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iancarroll
If you make money it's probably a good idea. If you lose your customer's
"groceries" and they sue, it's going to be against you personally instead of
the company. If you incorporate, they can only liquidate the company's assets
and not yours (if you're an LLC)

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dkb
What do I need to do if I just want to "test" my idea and offer an online
service for free then? Do I need to incorporate to protect my assets, even if
I don't charge users for the service?

