Internet business
I am looking into buying a website, how do I protect myself from scams or a dishonest seller. And if it proves to be an honest opportunity how can I protect myself and my investment?
Re: Internet business
You have not given much information. What type of scam or dishonesty are you concerned about? Ownership of the site can be readily determined through a WHOIS search at networksolutions.com.
Is this a going business? If so, the due diligence is basically the same routine (but differing in the details and methods) as it would be for buying a brick and mortar business. You need to obtain financial statements and then verify the revenues and expenses.
Even with good due diligence, there is always the risk that things are not what they appear to be. For that reason, buyers often insist that a portion of the purchase price be deferred or at least placed in escrow. The less comfortable you are about the risk, the larger the holdback should be.
I hope this helps.
David K. Staub, Illinois tax and business attorney
