Affiliate Program Laws and regulations are in a changing atmosphere, due to e-commerce being a fairly new business division. The laws apply to the Marketing of the products, which would effect your site.
There are serious ramifications if these Affiliate Program Laws are violated.It is extremely important that you understand any legalities of doing business online.
When you use an Affiliate Program Business Opportunity you are Marketing the products of your affiliates. Therefore you are subject to the federal law Click Fraud.
It is a felony and punishable by fines and jail time.
What is Click Fraud?
Click Fraud occurs when ads are clicked for non valid reasons. In other words, who or what clicks ads with no intention of purchasing a product, is not interested in the business of the ad. The clicks are being done to benefit thewebsite owner who has Pay Per Click (PPC) ads on their web pages.The is then charged and pays the site owner.
Another form of Click Fraud is done intentionally against the website owner in order to instigate an investigation and shut down the site.
Do not allow anyone to "Help" you by simply going to your site and clicking on all your ads. You might make a little extra money this way but in the long run you could be sitting behind bars with big financial problems. This is a Felony, do not violate Affiliate Program Laws.
If you come across ads stating something about "get paid for reading online" do not participate it is a click fraud ring. Also beware of "get paid to read e-mails" it could also be a form of click fraud.
If you have any reason to believe Click Fraud could be happening on your site you need to file a report immediately.Report it to Internet Crime Complaint Center IC3 URL below.http://www.ic3.gov/default.aspx
LLC Limited Liability Company
Due to the threat of Click Fraud once your web site starts generating an income it would be a good idea to form a LLC to protect your personal assets. As an Affiliate Marketer you could be sued for Click Fraud and the LLC would protect you and any share holders from being liable for damages.
TAX LAWS
Affiliate Program Business Opportunities generate multiple income streams and you are responsible for paying tax on this income. You, as a business owner have tax advantages as a business. Be sure you keep records of all expenses that are business related. Remember that you are working from home and if you have an area that you use solely for business you can deduct a portion of your mortgage, utilities, property tax, insurance and so on.