Legal Question in Business Law in California

Re: Selling Domain Names

There are no legal requirements to operating a business; just do it. However, your local municipality probably has zoning laws that may limit your ability to operate a business out of your home, and it probably also requires that you obtain a business license to do so. However, as long as your business doesn't annoy your neighbors, the municipal government will probably never discover that you are operating the business. If your business is going to have a name other than yours, you should register the name as a fictitious business name with the local county recorder. If you're going to do business statewide or wider, you might want to consult with an attorney about registering trademarks and servicemarks. Consider whether you should incorporate or become an LLC. If you are married, you should also consider the community property aspects of owning a business, and make sure you have an estate plan to care for you, your spouse and your childeren in case of premature death of you or your spouse. You definitely should get insurance: that's your first line of defense against liability. You ought to conult with an attorney and ask these questions in detail.

Re: Selling Domain Names

In addition to the sound, but general, help provided by Mr. Genser, you should be aware of the legal restrictions on registering and holding domain names with the bad-faith intent to "extort" a price from another business holding trademark or other rights in the domain name or a similar-sounding name.

This activity is called "cybersquatting" and has a related concept, "cyberpiracy."

In November 1999 the 106th Congress amended to Lanham Copyright Act to outlaw these practices. I suggest you look up the awkwardly-named "Anticybersquatting Consumer Protection Act" now codified at 15 USC 1125(d) at your local law library, or on line.

The line dividing legal from illegal trafficking in domain names seems to relate to the good or bad faith of the trafficker and the degree to which the domain name is already in use as a recognized trademark.

In case of any doubt, consult an intellectual-property attorney for advice before trying to sell a domain name.