Hello everyone,
I hope the new year is starting out well for each of you.
I am writing to ask if anyone has ever had to deal with any legal issues related to student "micro-businesses." I know several schools provide students with funding in various amounts, so students can start a business for the semester, often as part of a class.
My question relates to what happens if something goes wrong with a product or service provided by the student, and a customer decides to sue a student. Although this may seem like a low probability, it is not probably not zero. For example, if a student makes homemade bath salts, what might happen if a customer has a negative skin reaction to the product and decides to sue?
Have any of you ever run into a problem like this? If so, did the university provide legal support to the student?
One possible remedy I've seen at a school where I previously worked was that students needed to gain approval from central administration for their businesses (It was a smaller school, so this was possible). This was really more for the students' (and the university's) protection, though. For example, students weren't allowed to start a tree-cutting service that involved using chain saws.
Another possible remedy has been when a student has really wanted to start a high risk business, like a landscaping firm, we've helped them take the next step and form an LLC as part of the process to reduce the threat of lawsuits aimed at them personally.
It is unfortunate that these potential threats exist...most professors I know that have had a "micro-business" component to their course seem to believe these are valuable learning experiences for students.
Thanks for any suggestions you might have.
Franz Lohrke
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Franz T. Lohrke
Alvin C. Copeland Professor of Franchising and Entrepreneurship
Stephenson Department of Entrepreneurship and Information Systems
E. J. Ourso College of Business
Louisiana State University
3023 Business Education Complex
Nicholson Drive Extension
Baton Rouge, LA 70803
(225) 578-2126
https://twitter.com/@ftlohrkehttps://twitter.com/@LSUentrepreneur------------------------------