New FTC Rules for Social Media

The new FTC rules on social media content go into effect 12/1/2009. And, for the most part the new rules are aimed at protecting the consumer from reading a blog about a product that presents itself as an editorial, when the "blogger" has been paid to promote the product and/or has been given the product
for free.

That's a good thing, right? Yup...we think so too. BUT, it does create a few things every marketer must consider--whether they run a blog and/or promote their products on blogs or other social media sites (such as Twitter).

The main crux behind the new rule is this...when endorsing a product or service (in a blog, tweet, etc.), you must:

1. Disclose when you are being compensated--whether you are being paid for the endorsement and/or have been give free sample of the product (traditionally known as "not-for-resale" copies).
   
   
2. Be truthful in your statements...and make sure they can be substantiated.
   
   
3. Speak from actual experience--meaning you can't just regurgitate the sponsor's marketing speak if it isn't an actual experience, opinion, or belief of your own.

And the fine for not doing so? $11,000 big ones.

Really, most legitimate marketers already follow #2 and #3, but they should now be much more diligent in making sure nothing slips through. The biggest change is the disclosure requirement--so make sure your social media efforts now have these new rules on the operations checklist (whether you are the blogger or the product company promoting through 3rd party blogs)...it's the law!

The Top Ten Legal Documents Every Business Should Have

Every business, whether a start-up or established business, should have several key documents in place to ensure and protect its growth and development. These include, among others:

1. The appropriate corporate structure for limited liability protection, such as corporation, limited liability company, or limited partnership. Effective and competent advice will help you make an informed choice about what type of entity is (a) best for protecting your personal assets from liability and (b) gives you the optimal tax treatment.
   
   
2. Tax election status documents, filed in a timely manner, with input from a competent tax advisor.
   
   
3. Valid and enforceable operating agreements, partnership agreements or corporate bylaws. These documents establish your set of rules for running, governing and growing your business.
   
   
4. Buy-sell agreements between owners or members. These agreements contemplate the calculation of purchase price for an owner’s share upon death, disability or retirement.
   
   
5. Non-competition and non-solicitation agreements with co-owners and key employees. These are absolutely essential to protect the “know-how” of your business.
   
   
6. Non-disclosure agreements to protect the institutional processes, client lists, pricing matrices and other confidential information of your enterprise.
   
   
7. Clear and enforceable customer agreements, including provisions providing for customer payment of the cost of collection of past-due amounts.
   
   
8. Written purchase orders for vendors with terms protecting your business.
   
   
9. A written employee policy and procedure manual, with regular updates and plans for distribution. This document helps avoid potential liability at a corporate and owner level for many employee claims.
   
   
10. A regularly updated and maintained Corporate Book, complete with minutes of shareholder minutes, board of directors’ or managing members’ meetings and approvals for various corporate acts.

These are just a few of the documents every successful business should have in place. The time and money spent putting these and other necessary legal documents in place is ultimately a savings to you – in terms of peace of mind, ease of governance and avoidance of disputes and litigation costs.