Corporates are subject to increasing risk of being exposed to or otherwise dragged into unnecessary litigation in maintaining the same websites and sharing the same social media points with subsidiary companies based in foreign locations. Technically, these foreign located corporations may be separate legal entities, however, due to their world wide web presence, they appear and represent to the world as being one and the same.
An Australian company, for example, may have an affiliate company in the United States of America. Litigation involving the American counterpart may arise. The opposing party in that litigation may require documents or other evidence to be produced by the Australian company. Whilst technically, the two entities may be separate, their online presence gives public the impression that the two companies are one and the same or otherwise very closely related. This may lead to stressful, expensive and protracted efforts on the part of the Australian entity having to be engaged in litigation in the States in a proceeding that they are (rightly or wrongly) a party to.
Online branding and social media presence is necessary in today’s world. However, there are precautions and safeguards relevant companies can take to try to avoid the attacks of foreign litigation.
First and foremost, on the Australian company’s website, any foreign subsidiaries should not be listed as units or divisions of the company or vice versa. All entities must be clearly, distinctively and convincingly listed as separate legal entities.
Secondly, the Australian company and any foreign subsidiaries should not have the same officials, executives or board members.
Thirdly, all the social media profiles of the various entities should be kept separate and distinct from each other.
Fourthly, business cards, email signature lines and letterheads should reflect the appropriate name of each entity for which it is being circulated and not any unifying identity.
Lastly, employees and users should be imparted with proper social media training and use information. A proper audit should be conducted to periodically monitor and check the company’s website, subsidiaries’ websites and social media pages, and employees’ (of each of the Australian company and the subsidiaries) social media activity.
Burke & Associates Lawyers have experience in providing advice as to the framing of corporate social media policies and implications of online branding policies. Please don’t hesitate to contact Meghan Warren of our Firm on firstname.lastname@example.org or +61 3 9822 8588 to discuss further.