Reward-Based Crowdfunding Can Result in Legal Problems for Entrepreneurs

DuPage County business lawyersOne of the countless ways the internet has changed the business world is through the introduction of online crowdfunding. Through websites like Kickstarter and IndieGoGo, entrepreneurs can obtain the capital they need to begin businesses and create products. These websites are referred to as “reward-based crowdfunding” because there is generally an incentive for people to invest in the various projects. Funders may receive the actual product being developed or other benefits in exchange for their investment. Although raising capital in this manner has been wildly successful for some entrepreneurs, others have found themselves in legal trouble after becoming involved in a crowdfunding campaign.

You May Be Entering into a Contract Unknowingly

Because crowdfunding is relatively new, the legal ramifications of failed crowdfunded projects are not completely understood. Recent lawsuits against some entrepreneurs who used crowdfunding to gain resources prove that crowdfunding is not a perfect solution for those lacking start-up funds. If you wish to use crowdfunding to finance your project or business, it is vital that you understand the risks that should be avoided.

When an individual agrees to take money from people in exchange for certain benefits, he or she is likely entering into a contract with the funders. If you are not careful with the language you use to inform investors of your offer, you could be creating a contract without even realizing it. This means that when investors do not receive the benefits that they were promised, they can file a breach of contract claim against you. Forming an LLC is one way that you can help protect yourself from potential personal liability if your intended project fails.

False Advertising and Consumer Protection Laws

Those who wish to use crowdfunding must also be careful not to overpromise what their funders will receive or what the project objective is. Misleading language or incorrectly describing your project can make you vulnerable to claims of false advertising, negligent misrepresentation, and fraud. You can also be held accountable for under-delivering on your promises under consumer protection laws. It is essential that anyone using reward-based crowdfunding avoids misrepresenting both the project/product itself as well as the benefits investors will enjoy. Not only can claims be brought against you by funders, but claims can also be filed by governmental agencies.

Tax Implications of Crowdfunded Projects

Many people using websites like Kickstarter do not realize that the money they receive is taxable income. If you create a rewards-based campaign, you will be required to pay taxes on the money you take in from investors. Many entrepreneurs using crowdfunding to finance their project make the mistake of forgetting about this significant expense. It is crucial that anyone using a reward-based funding system consider the taxes that they will have to pay when creating the project budget.

Contact a Glen Ellyn Business Lawyer for Help

For sound legal guidance on a number of business concerns, contact the business law professionals at Stock, Carlson, Oldfield and McGrath LLC. Speak with a knowledgeable Wheaton, Illinois business law attorney by calling 630-665-2500.

Sources:

https://www.thebalancesmb.com/crowdfunding-legal-issues-for-small-businesses-398020

https://www.msn.com/en-us/news/technology/crowdfunding-is-a-popular-way-to-raise-money-just-dont-count-on-getting-a-refund-if-something-goes-wrong/ar-BBVX9FT

Top Four Reasons You Need a Real Estate Attorney When Buying Your New Home

Wheaton real estate lawyerFor many people, home ownership is a big part of living the proverbial “American Dream.” That being said, your home is probably the most purchase you will ever make in your life. If you are buying a house for the first time, you might not realize all of the steps that are involved and how complex each of them can be. Throughout the process, there will be many variables to take into account and problems to avoid.

In many cases, homebuyers work with a real estate broker or an agent to help them find the right home and to streamline the process. Your agent, however, is only a part of the bigger picture. A qualified real estate lawyer can provide the legal protection you need along the by:

  • Acting as an advocate. Your real estate agent might be friendly, helpful, and charismatic, but the main goal of an agent to facilitate the sale of the home. This means he or she will often be an intermediary between the buyer and the seller. A lawyer, by comparison, is dedicated to protecting your interests, regardless of whether a sale takes place;
  • Offering legal advice. No matter how knowledgeable your agent might be, he or she is not allowed to give you case-specific legal advice. Doing so could cost the agent his or her real estate license. An attorney is fully qualified to review state laws, local ordinances, and other rules that might affect your transaction and to provide you with reliable guidance at every stage of the process;
  • Translating legalese in contracts. Legal documents are almost written using confusing language and terms that are unfamiliar to the average homebuyer. Without a lawyer, you might struggle to understand the terms, conditions, rights, and responsibilities of not only your purchase contract but also of your mortgage agreement and any other applicable legal paperwork; and
  • Researching the property. Real estate transactions are usually public record, but tracking down the history of a particular property can be difficult and time-consuming. A real estate lawyer has the tools and resources to research the chain of title for the home, any previous sales, and any problems that may have come up in the past. Your attorney’s work could help you negotiate a better deal on the property or show you that you might need to reconsider altogether.

Making a mistake when buying a home could lead to serious problems down the road, possibly costing thousands of dollars and many hours of aggravation. Working closely with an experienced real estate lawyer could help you save money, time, and stress.

Call a DuPage County Real Estate Lawyer

If you are thinking about buying a home in the near future, contact an experienced Wheaton residential real estate attorney. Our team will sit down with you to discuss your circumstances and help you find and buy the right home for your family. Call 630-665-2500 for an appointment today.

 

Sources:

http://legal-dictionary.thefreedictionary.com/Chain+of+Title

https://homeguides.sfgate.com/real-estate-lawyer-do-6871.html

Benefits of Utilizing an Advance Healthcare Directive in Your Illinois Estate Plan

directive, DuPage County estate planning lawyerFor many people, it can be hard to know which estate planning tools and documents are appropriate for their circumstance. Estate planning has become almost synonymous with a Last Will and Testament, but drafting a will is by far not the only important aspect of estate planning. One estate planning tool which you may not have heard of is an advance healthcare directive—the most common type of which is a living will. A living will allows a person to make decisions about their potential future medical care in advance. If you are someone who wants to have a say in the types of medical intervention you could receive if you become incapacitated through illness or injury, an advance directive may be right for you.

A Living Will Puts You in Control

Few would argue that medical advances made in the last several decades are anything short of remarkable. Many people are able to survive and even recover from illnesses and injuries which would have led to death even just a few years ago. Because of this, more and more individuals are realizing how important it is to make decisions about medical treatment and end of life care in advance. A living will allows you to dictate the types of medical intervention you do and do not want if you are incapacitated by illness or injury. More specifically, a living will can allow you to:

  • Refuse certain medical treatments;
  • Know the results of your medical treatment;
  • Ensure doctors follow your wishes regarding medical intervention and care; and
  • Authorize medical treatments you may want in the future.

An Advance Healthcare Directive Can Help Your Family Avoid Burdensome Decisions

One of the biggest benefits of a living will is that it saves your family from having to make medical decisions on your behalf if you become incapacitated. The famous Terri Schiavo case is a dramatic example of the importance of proper estate planning. The young woman fell into a persistent vegetative state in 1990 and required a feeding tube to live. An aggressive, public battle between Schiavo’s parents and her husband regarding her feeding tube resulted. Her husband believed Schiavo would not have wanted her life artificially prolonged in this way while her parents vehemently believed that she should be kept alive at all costs.

Family members of individuals suffering from an incapacitating medical condition often disagree about the types of life-prolonging care their loved one should receive. By creating a living will, you can significantly reduce the need for family members to make these types of burdensome decisions.

Contact a DuPage County Advance Medical Directive Lawyer  

Contact our experienced Wheaton, Illinois estate planning attorneys today if you have further questions about living wills or other estate planning tools. Call 630-665-2500 to set up an initial consultation.

 

Sources:

https://www.cbsnews.com/pictures/look-back-in-history-terri-schiavo-death/

https://www.forbes.com/sites/northwesternmutual/2015/08/26/what-you-should-know-about-advance-directives/#3dcc31ac6b4c