Have you been considering starting an ecommerce business? These days, the internet has made it a simple thing to start an online business. One can get hosting and starting a website with a few clicks of the mouse. However, the hard part comes in the planning stages of your business.
I’m not talking about just picking your niche or type of business. Have you considered all the legal implications and issues that arise with starting an ecommerce business?
There are often legal issues that arise when one starts a business. Some of the things to consider are:
- Are there any risks of legal liability?
- Do you have business partners?
- How do you divide the assets of the company?
- Are you building a brand that you need to protect?
- Will you be hiring employees?
- Will you be entering into contracts with service providers?
There are literally a myriad of legal decisions to be made before starting your ecommerce business where a good technology lawyer can be an incredible asset.
Here are a couple of the most simple ecommerce business legal issues you’ll need to decide:
Does Your Ecommerce Business Need to Incorporate?
One of the main reasons to incorporate is to provide you personal protection against legal liability. When you incorporate your business, the corporation generally becomes the liable entity when lawsuits arise. This can serve to protect your personal assets from a lawsuit.
The thing to consider is what kind of business are you running? Will you be selling a physical product? Giving advice? Is there a possibility that someone might misuse your product or advice and somehow injure themselves? These are some things to consider when you are considering whether you need the additional protection of a corporation.
If you’ve invented some fantastical chemical cream that hasn’t been FDA approved or tested and you want to sell it online. This is the time to consult with a professional about the risks of selling your product and whether you should incorporate to protect yourself.
The other reason that people look to incorporate is for money management. There are some tax considerations when you are earning income online. You may want to adjust how you earn your income.
Are You Creating a Brand?
Did you come up with some incredible product with a catchy name? Perhaps you want to protect your intellectual property with a trademark or copyright. This is planning ahead for the success of your ecommerce business.
Think on what will be important to your ecommerce business if you become wildly successful. Your name, brand and image will become huge assets if you become successful in your business. You certainly want to protect yourself from copycats if that happens.
This is the time to look into legal advice to learn how to copyright or trademark your brands.
Even if you are doing something as simple as running a blog. Your content needs to be protected. After all, this is your work product. Your original content is protected by copyright. These are issues that you will want to learn about in the course of starting your online business.
Information is power. Giving information can also protect you from issues that arise. While it may seem obvious to you that your products and information should only be used a certain way, sometimes it doesn’t hurt to state the obvious.
A good disclaimer can protect you from future liability. If you warned people that they shouldn’t use your skin cream as a condiment for their french fries, it will be much harder when some strange skin cream, french fry eating maniac tries to sue you for giving him a stomach ache. I exaggerate, but you see my point.
Now we can’t foresee everything that can go wrong. It’s often difficult to write a disclaimer that covers every contingency. However, a good technology lawyer will be able to spot the most common issues and draft you a very good comprehensive disclaimer to protect you.
Are You Working with Other People?
Whether you are a sole proprieter or you are planning a partnership, you will most likely be dealing with other people in your ecommerce business.
Whenever you are going into a business relationship with another person, it’s a good idea to put your agreement in writing. If you are going into a partnership, draw up the terms of your agreement. Establish how the company assets with be split. Agree beforehand what each of your duties will be. Having these items in writing ahead of time will save you from many disputes later on.
The same advice should be followed when you are entering a business contract with somebody else. If you are contracting third parties to manufacture your product. You want to agree on all the details in writing ahead of time. You want to have a set price and delivery date. What to do in case of a breach of any of the terms. Who’s responsible for the cost of any defective products. All of these are issues that will arise in any business. An ecommerce business is not exempt from these basic issues. So it’s always best to plan ahead for these potential legal issues in advance.
These are just a few examples of the potential legal issues that may arise when you start an ecommerce business. There are many more pitfalls that can arise in any business. That’s why it’s best to consider all these aspects in advance and even consult with an attorney before jumping in.