Determining Ownership Of Social Media Accounts Before A Business Files For Bankruptcy
If your business owns a social media page or account, what happens when the business goes through bankruptcy? Could you be faced with losing the accounts if the business assets are sold or the business is reorganized without you? This is what you should know.
Why does it matter so much?
Your social media accounts serve as a way to promote your name and business, your status within a community, and can accumulate a lot of goodwill toward your business. They also provide you with a quick and current way to contact your current customer base and find new customers. That makes them valuable property–especially if you have hopes of eventually starting over or reinvigorating your business.
If your business is faced with a bankruptcy, you may be faced with the potential of losing control of those accounts. If the bankruptcy court determines that business assets have to be sold to pay its debts as an entity, the social media accounts would also be sold. If you are in business with partners, you may also be faced with losing control of the business if it is reorganized without you. You'd have to turn the social media accounts over to whichever partners end up in control of the business.
What is the actual nature of the account?
In order to determine whether or not the social media accounts are your personal property or the property of the business entity, the court will look at the nature of the accounts. There are some things that the courts are likely to consider:
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What is the name on the account? If it is in your personal name, it might be considered a personal account, but if you are promoting the page under the name of your business it is more likely to be considered a business account.
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What are the terms of service for the social media platform? Some social media platforms require you to register accounts differently if you use them for your business and you have to acknowledge that you are acting on behalf of the business.
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Are the posts that have been put on the page primarily for the purpose of furthering the business or increasing interest in the business? If they were, the court is likely to determine that the accounts belong to the business.
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Do the social media pages link back to the official website for the business? If they do, that's a sign that they are promoting the business.
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Did company employees ever have access to the social media accounts? If you instructed employees to maintain the site or post to it for you, that indicates that it is a business site, not a personal one.
Given the importance of social media to today's business world in terms of marketing strategy, make sure that you understand how your access to them could change before you get deeply into bankruptcy court. For assistance, talk to a business attorney like http://l-wlaw.com.
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