Key Harrington Barnes, PC

The potential pitfalls of an Internet business

Texas residents interested in running their own company may wish to know about some of the potential dangers of starting an Internet business. Due to the number of fraudulent business opportunities that are present, any proposal that is received should be carefully reviewed.

For many people, the idea of having a home business can be very attractive. However, the Federal Trade Commission warns that there may be companies that make misleading promises regarding setting up an Internet business. These pitches often claim that no experience is necessary and make big promises about the work required and the potential earnings that can be derived therefrom. When there aren't many details to accompany these claims, it is very possible that the solicitation is a scam.

The FTC says that, because a real business requires a detailed business plan, a vague offer should be met with skepticism. Before any money is spent on getting the business set up, several steps should be taken. First, the various claims made by the seller should be examined carefully, along with any disclosure documents provided. Previous buyers should be asked about their experience with the company or product. Then, a thorough Internet search of the company and their principals should be done to see if there have been any complaints lodged.

The last step that the FTC recommends is to consult with an attorney or other professional in order to evaluate the business opportunity and the contract provided by the seller or broker. A business law attorney may be able to assist with this and other startup needs, such as forming a limited liability company or a corporation. The attorney can also assist in drafting contracts and other agreements appropriate to the particular business.

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