PROTECTION OF BUSINESSES ON SOCIAL MEDIA; THE LAW FOR ENTREPRENEURS AND SOCIAL MEDIA INFLUENCE.
CR Advocates is a law firm that offers legal services to clients in various sectors. The evolution of social media from being just a personal space to a business hub is one to be admired. Digital content creators have dominated the digital social spaces, raking in massive economic benefits from corporates who take good advantage of their influences to market their products. Making a name in the business markets has also not been a walk in the park for entrepreneurs and other small and medium enterprises. Well, thanks to social media, doorstep delivery is no longer a novel phenomenon.
In this week’s article, we give a sneak peek of just how new entrants and aspiring entrepreneurs can protect their businesses even as they seek to break the digital ecosystem and create a name for their businesses. We explore the nascent legal risks and provide critical strategies for their navigation.
THE MUST Dos
- Incorporation of the business entity
First, it is important to establish a legal entity. A legal entity in the basic sense means a limited or unlimited liability company. For the majority of the starting companies, private limited companies are preferred for reasons explained in our article Difference Between Private and Public Company in Kenya
Incorporation of a business entity is crucial because it helps to reduce your personal liability and safeguard your personal assets if a legal conflict arises due to the operation of your business. In essence, the legal entity serves as a protective shield for your personal assets.
Think about it this way; you and another party make a business agreement using your legal entities. If one of you breaks the agreement, the other may take legal action. If your entity is properly formed and run, any judgment creditors may only seize the entity’s assets to satisfy the judgment from the lawsuit. However, if you signed the agreement as an individual rather than using a legal entity, creditors could potentially use your personal assets to pay off the same judgment.
As an entrepreneur, it is common practice to look up the website of a partner you wish to engage with in a certain transaction. Well, do not just look up websites. The safest way to identify a legitimate business is through a search at the business registration service.
- Disclose paid Ads And Partnerships
In social media spaces, it is common for businesses and individuals with massive followings to get offers from corporates to advertise on their behalf.
In this instance, it is important for an influencer to give full disclosure of any paid advertisement partnerships that they are engaged in at the time.
It is recommended to use #sponsored or #paid or create your own partnership hashtag for sponsored Instagram posts, ideally in the caption. Concealing these hashtags in the comment section could result in legal consequences since it doesn’t immediately alert other users. If you prefer not to use hashtags, the only other option to meet the requirement for clear and conspicuous disclosure is to write a very explicit caption in your post, revealing your partnership to other users. Simply tagging another individual, company, or product is insufficient and could also lead to trouble.
- Comply with copyright laws.
In Kenya, using someone else’s photos, music, or videos without obtaining written consent beforehand could constitute a violation of copyright laws. To prevent facing copyright infringement claims, it is recommended to obtain permission directly from the copyright owner. As an entrepreneur, you also do not want to be known for the unauthorized use of celebrity intellectual property.
Read more about copyrights in this article Ticking Time Bomb Why You Should Register Your Copyrights
- Document every agreement.
To avoid instances where a social media account is deleted in the middle of the performance of an advertising partnership and the influencer/entrepreneur is left in liability, it is important to document any agreement and make every clause as specific as possible. The clauses in such an agreement should be tailored in a manner that foresees any such liability.
Social media has created a remarkable space for entrepreneurs. Therefore, it is important for all entrepreneurs who have chosen to exploit the social media spaces positively to note the points highlighted above to the fullest. By doing so, you are assured of maximum benefits.
The information provided in this article is intended for general legal advice and does not constitute legal advice for any specific transaction or case. Since each transaction presents a unique legal context, it is advisable to retain a legal adviser for specific transactions.
To contact CR Advocates LLP, send us an email at firstname.lastname@example.org or call +254 100979081 or Book a strategy call HERE or direct message us HERE on WhatsApp at your convenience. Our legal team will be happy to help you.