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Checklist for forming a NFT marketplace

Checklist for forming a NFT marketplace

Technology is ever-changing, and so is the business world that relies upon it. And with these changes come new legal issues. With the growth in digital assets and nonfungible tokens, or NFTs, it is important for investors and entrepreneurs to understand the complexities these new technologies could bring to the formation of a new business.

NFTs and legal ramifications

The law that surrounds NFTs is still developing. And with the continual growth in digital assets, tokens and technology, the reality is that law and policy cannot keep up. Therefore, it is important to consider a few key points when forming a business or creating a business plan.

Checklist

To begin, one will need to form a corporate entity before launching a NFT marketplace. Doing so will provide one with the most substantial liability protection. Additionally, it will provide more creditability and a stronger ability when it comes to seeking financing from external sources. The next step is to create a conduct code, which provides an extra layer of legal protections. This is followed by developing smart contracts, which specifically identify the digital creation, ownership transferability, royalties and the flow of funds.

Other things to consider during the formation and planning stage arethe platform terms of service, terms of sale, intellectual property protection, securities law compliance, payment processing, consumer protection, data privacy and licensing fees. While this checklist is not exhaustive of all the steps to consider, it does contain key steps one should consider.

Because the technology changes quickly, it is important that one stays aware of these changes and how they interact with current laws and policies. This not only helps one form a business without issue, but it can also help one maintain a business without emerging issues. It is a good idea for entrepreneurs to work with a skilled business attorney during the business formation process to ensure they are protecting themselves and their businesses.