My apologies for the wait.Sorry for the delayed response. I need to be sure that legally we are protected even if our client is convicted for running a ponzi scheme. I need your opinion on this.We never get involved in managing operations and never have any cuts on actual turn-over of the company. We sell our software at flat one time prices and services at flat maintenance charges.
Well, there is 'silver bullet' to doing this. Even if you have nothing to do with it, MLM companies are automatically suspect due to the very nature of the set up.
The best way to avoid this is to have any client sign an agreement that states in part that they are acting COMPLETELY INDEPENDENTLY. This will at least attempt to show any authorities that you attempted to distance yourself from them if they do something bad.Secondly how we can be sure that any client who uses our company name to acquire domain names or hosting facilities do act reasonably, and what our course of action should be in case we do find that some of our client is duping people. We cannot take their website offline just because we feel that they are running a ponzi scheme.
Parties in your situation may wish to put into agreement that ANY website set up must be pre-approved by you, and, any major changes to that site must also be pre-approved by you. This may be included in the contract. Nothing states that this cannot be done.
If there is already an existing website up and running that is operating like a ponzi scheme, then one may demand its shutting down, or else break contract for cause with the clients behind it. "We cannot take their website offline just because we feel that they are running a ponzi scheme." Actually, you can. Rather, you can cut them off, citing (if signed) the clause, and (if not signed) that they are engaged in illegal activities that make the contract void. If they do not take off the website, one can force it down by court
order.In some cases our client do wind up company after running it for sometime. They would have collected some money and then run away or simply launch another company in another region. Investors who joined recently loose their all or most of the investment. Investors file police complaints and then investigation starts. Should we approach authorities and provide all details of owners of the company on our own or wait for the authorities to reach us and inquire about owners?
The answer is YES, but, via counsel. This is because without an attorney, you may accidentally state something that may be used against you. With an attorney, any statement/information passed on by you to the authorities though the attorneys is controlled. This may also help to earn your company the belief of the authorities that you really do not
have anything to do with clients who begin using the MLM software as a ponzi scheme.IMPORTANT
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