QUESTION
Is it illegal to make a fake business and promote it via social networking as a social media marketing experiment?
Asked on Dec 23rd, 2011 on Business Law - Colorado
More details to this question:
My friend and I have hatched a plan to create value in a company through a social media experiment. We are going to build a legitimate looking company through branding, website, logo, etc, then market it to the community we live in through social media. The plan would be to promote this company as "coming in 2012" for example, then get fans, all in the meantime creating programs and buzz through Twitter, FB, other various media channels. In the end we would like to create enough buzz that we would be able to sell the pre-made company to an entrepreneur, business owner, or whoever would like to own it. What are the things we should be aware of, or try to avoid?
1 ANSWER
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Interesting business model. You will find that you have tremendous difficulty finding an attorney to advise you regarding a scheme that involves deceit regarding the nature and objects of your business. While the principal risk in such an activity might be that you obtain money or property by false pretenses, that doesn't seem to be an element of your business plan. Nevertheless, obtaining "fans" or third-party endorsements will necessarily involve making statements to the public regarding the objectives of your business and what can be expected by fans if they sign on. If these statements are false, you may, at least in theory, be exposed to liability.
Answered on Dec 23rd, 2011 at 5:41 PM