3 ms·

Ask HN: Lean legal for an unethical startup?

So I have an idea for a side project/startup that most people would consider unethical. I'm not convinced that it's unethical and I want to give it a try as an experiment, one that may make money if successful. But due to the questionable ethics of this project, it seems it has a good chance of getting sued. Imagine, for reference, a site that helps you put copyrighted material on YouTube, except not as far on the unethical scale, and without powerful entertainment industry opponents. What's the minimum I should do to protect myself before trying this experiment? I'm thinking just set up an LLC. I want to minimize my expenses since this is mostly an experiment for my own amusement. (Although if it succeeds it could generate substantial cashflow.)

pavornyoh 11y ago
>What's the minimum I should do to protect myself before trying this experiment? Have a lawyer at the ready via speed dial. This will cost you alot of money if you are going to be doing something unethical.
- throwawayethics 11y ago
  Out of curiosity, why on speed dial? (I take it you mean a prearranged retainer.) The potential for legal trouble here is more along the lines of "someone got annoyed at what I was doing and tried to sue me" rather than "the FBI sent a military attack squad to my mansion in New Zealand."
mindcrime 11y ago
Setting up an LLC, or even a traditional corporation, doesn't grant you complete immunity from liability. That's especially true if you're a "single member LLC" or the sole stockholder in a corporation. I'm pretty sure it's even more true if you organize the legal entity for the sole purpose of trying to shuck liability for something you knew in advance was dodgy. See: https://en.wikipedia.org/wiki/Piercing_the_corporate_veil https://en.wikipedia.org/wiki/Piercing_the_corporate_veil OTOH, there is a difference between "unethical" and "illegal". But in my opinion, if you don't have a definite answer on where your idea falls on that spectrum, there are only two reasonable choices: 1. Drop it and move on to another idea. 2. Spend the money up-front to consult with a lawyer and find out exactly what the risks are and how to best protect yourself. But that's just me...
- throwawayethics 11y ago
  Appreciate the reply. Very appropriate username in this case. ;) I'm pretty sure my idea is on the potentially unethical side, but not illegal. Although it could be used for illegal activities. (In that sense, so could many web services, and they are.) So for others that read this, any input on how much protection a good ToS could offer?

pavornyoh 11y ago

>What's the minimum I should do to protect myself before trying this experiment? Have a lawyer at the ready via speed dial. This will cost you alot of money if you are going to be doing something unethical.

throwawayethics 11y ago
Out of curiosity, why on speed dial? (I take it you mean a prearranged retainer.) The potential for legal trouble here is more along the lines of "someone got annoyed at what I was doing and tried to sue me" rather than "the FBI sent a military attack squad to my mansion in New Zealand."

mindcrime 11y ago

Setting up an LLC, or even a traditional corporation, doesn't grant you complete immunity from liability. That's especially true if you're a "single member LLC" or the sole stockholder in a corporation. I'm pretty sure it's even more true if you organize the legal entity for the sole purpose of trying to shuck liability for something you knew in advance was dodgy. See: https://en.wikipedia.org/wiki/Piercing_the_corporate_veil https://en.wikipedia.org/wiki/Piercing_the_corporate_veil OTOH, there is a difference between "unethical" and "illegal". But in my opinion, if you don't have a definite answer on where your idea falls on that spectrum, there are only two reasonable choices: 1. Drop it and move on to another idea. 2. Spend the money up-front to consult with a lawyer and find out exactly what the risks are and how to best protect yourself. But that's just me...

throwawayethics 11y ago
Appreciate the reply. Very appropriate username in this case. ;) I'm pretty sure my idea is on the potentially unethical side, but not illegal. Although it could be used for illegal activities. (In that sense, so could many web services, and they are.) So for others that read this, any input on how much protection a good ToS could offer?