Legal Question in Business Law in California

legal requirements for reporting payments 2

I am creating a website which has several parts.

(1) Allows people to donate money to 3rd parties, with the website (and associated infrastructure) acting as an intermediary. The purpose of which is to be able to aggregate 'micro-payments' to avoid high financial transaction costs. This is similar to conventional micropayments sites (such as bitpass, peppercoin, etc). The main difference is that it is a donation site.

(2) For another part of the website, I am hoping to incorporate 'conditional donations', which I termed 'awards', perhaps incorrectly. A conditional donation is an indication sent by a potential donor to a particular website that he may donate IF the website meets some criteria (eg removal of all ads from the site, etc)

I was wondering what the legal requirements are for parts (1) and (2) and where I can find more information on this process, both in collecting money for donations and paying the money to the target of the donation?

I recently posted another (similar) query here:

http://www.lawguru.com/cgi/bbs/mesg.cgi?i=807484071

which I believe to be invalid, since there is absolutely no element of chance involved in this process. I apologize for the confusion.

thanks!


Asked on 10/28/05, 3:04 pm

1 Answer from Attorneys
Terry A. Nelson Nelson & Lawless

Re: legal requirements for reporting payments 2

My answer to this post is the same as to your first. You are proposing a scheme in an area of business that is vigorously regulated by state and federal law. Violating those laws will result in criminal and civil penalties for those involved. You are NOT going to get appropriate legal advice for free over the internet that will allow you to run this business without risk. If that is how you intend to do it, good luck, and pack a toothbrush. Otherwise, take the advice several attorneys offered you: get and pay qualified counsel for the business, and set aside enough money to form and run the organization in compliance with the rules, permits, licensing, etc. Contact me if interested in doing so.

Read more
Answered on 10/28/05, 4:11 pm


Related Questions & Answers

More Business Law questions and answers in California