When posting recently on the reseller topic I was reminded of a segment of our Terms of Service as well as many other companies I am aware of based on reports that the company contracted to write our legal documentation had received and discussed with myself, thought I might share it in relation to that.

Based on the location in which the company is registered (UK) they are governed by that provinces laws and or regulations thus what may be valid in the UK may not be valid for example in the USA or vice versa. Thus just as now we have those who cause accidents to claim personal injury for example (news recently) numerous individuals took advantage of this by registering abroad and taking said companies to court for breach of said laws within those countries, thus leaving said companies almost helpless.

Based on this and a little research you will normally find that more uptodate TOS’s now include along the lines of the fact “that those wishing to engage in legal action regarding a product services or any form of interaction” with said company "may only do so within the country within which they are registered".

Just one of the legal notices that sprung to mind after writing a previous post, thought it may help or spark some reminders to some of the various laws that govern our trade and I’m sure Steve as well as others probably has a number of news links related somewhere

Never gave this much attention as it's always been covered under our contracts. We do have legal counsel on staff though. csn-uk brings up a good point - it's important to have ALL your i's dotted and t's crossed when dealing with international clients.

This is a must on all contacts and even non-disclosure agreements. You always want the ball in your court to lower your expenses and to keep it under your jurisdiction.

People usually like to cut corners when it comes this work, but I strongly advice against it since it only takes on lawsuit to make you regret it all. Work with a lawyer and make some general non-disclosure templates as well as work together on a solid AUP and TOS.

Thanks for sharing this information.

We actually have a double clause in our terms of service:

20. GOVERNING LAW, VENUE; WAIVER OF TRIAL BY JURY

This allows us to set the governing laws for the court case and also prevent a jury trial should a case proceed past the inital one.

So while our business is in Calfornia, our servers are in Texas, England, Australia and Germany. Each set of servers have different laws for their countries (or states) and as such we have structured our terms of service to comply with all 5 places.

It's not just where YOU are located that will come into play, but also where the server is located. What is allowed in Texas is sometimes not allowed in California etc.

I'm in the same boat as well. You have to ensure you're covered wherever you or the client may be. In a global economy, especially with the internet being the main point of sale, you have to ensure that your liability is covered - data, uptime, SLA, etc.

Also, hire a lawyer to structure your company properly. Most people think that paying $5-$6K upfront is a lot and will be a waste of money, but in reality, it's an investment that will save you quite a bit in the long run. This will allow you keep your wealth as well as increase the wealth of your family (if you have them listed as share holders).

A bit off-topic, but I thought it would be appropriate.

I assume you need to be big enough to have such ability and hire the lawyer

I wouldn’t ever use the words “big enough” in any legal issue, especially in this aspect. Regardless of company size you will be bitten for everything and anything you have as a company if a big enough legal battle where to ensue, and even worse the case if you are not a registered company.

As mentioned it is a tad expensive, however talk to friends/local businesses or even local university/college business tutorial and many may have publications or offer free if not low cost guidance on company structure. However for legal issues perhaps approach 2/3 year degree students and ask them or through their tutor to write as a task/assignment a draft TOS.

By no means use this off the shelf, instead after for example the tutor selecting one, have it run past or checked over by a subject professional (lawyer) to ensure any experience gained knowledge is added such as the subject of this post.

A lot of companies including Google started from university, many of them utilised this method to begin with when budgets where not in the billion range as per Google today.

As CSN stated, there are various places that can assist you in startup of the business. If you contact your local chamber of commerce or if your town/city has an SBA (Small Business Association) they usually can point you toward some FREE Clinics that can assist you.

When we started, our upfront fees for our lawyer, accountant etc was not in the $5-6k range. I don't believe it even broke the $1k range by the time I was done with startup costs. Sure it costs more these days, but when I first started out (and that was as a web design company) it was a hobby with no investors and money out of my pocket for everything.

Check around - you'll find places that can assist new businesses.

There are certain chamber that may help you putting your business up, this are firms that are located locally to your town or place. Just try to find some infos about it.

Your bank can also point you in the right direction, as they deal with processing loans for new businesses everyday.