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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10584
Experience:  30 years of corporate, litigation and international law
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Im just getting ready to launch an online radio station through

Resolved Question:

I'm just getting ready to launch an online radio station through www.Live365.com (a reputable company who takes care of royalties, etc. - I'll be paying a monthly fee for their services). The purpose of the station is to raise money for a new live music concept I've spent the last 10+ years creating. I'm looking to raise $1 million, but will only need about $250K to put on the first show. I'm raising funds ultimately for a for-profit company using the crowd funding model (http://en.wikipedia.org/wiki/Crowd_funding). Should I ask for personal donations going directly to me, or should I file paperwork to start the company? I envision receiving monies from both individual donations and selling small $5-$20 products. This is probably a question I should also pose to an accountant, but as I understand it I can receive up to $2K? from a single person in a year so it makes sense to raise money by people contributing directly to me. On the other hand, if I'm selling branded merchandise with the name of the radio station on it, is it better for legal protection to "incorporate"? Thank you very much for your help!
Submitted: 5 years ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 5 years ago.

bizlaw :

What do people get for making their contribution? Are they going to get any interest in the company or are they just giving you money for your project for nothing?

Customer:

Contributors will not get a financial interest in the company. They will, however, get recognition through various means (website, newsletter, mentioning in concerts, etc.), plus those contributors who do the most (either financial contributions or activities which help promote the company) will be awarded free tickets, free merchandise, etc.

bizlaw :

They should contribute to the entity that is going to provide the various amenities. Since that will be the company that does the radio station that should be to whom they send the money. It should be incorporated. I would not call it a donation more like a grant as donation has the connotation that is a non profit and you want to be careful not to mislead people.


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Customer:

I'll stay away from the word "donation" per your suggestion. Should I also stay away from the phrase "raising money" as that could cause some red flags from the SEC? Could I simply state "all monies received go toward creating a new concert company"?

bizlaw :

Yes I think just talking about creating the new concert company is the better alternative. That and the amenities those who fund will receive as part of the package.


If this answer is responsive to your question, please accept it. That is how we are compensated. It would also be appreciated if you provided feed back on your view of the answer. Finally, if the answer was especially helpful you can provide a bonus. If I can be of further assistance or you have other questions in the future you can ask for me and reach me at this site.



This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.


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