As running an online business is a comparatively new phenomenon and there are various businesses that don’t really understand the law. An e-commerce business refers to the vast variety of online activities regarding product and services. It involves business transactions amongst parties electronically, unlike traditional physical methods of business.
If you are intending to build an online shopping store, the best way to do is to research your business niche and idea along with the restrictions and laws that affect your e-commerce store. When you know about these laws beforehand you get the time to work through them and make your business aligned with the online business law:
1. Taxes
Every country has laws regarding taxes, whether you are running a business or doing a full-time job- you have to pay taxes. For your e-commerce business, you must understand your target audience. This is because you need to sell your products according to the tax laws of that country. For instance, in the US, you have to keep prices exclusive of tax whereas if your audience is in Australia, you need to sell products with tax inclusive prices.
So to cover all the tax-related requirement you need to consult the professional of the local authority.
2. Pick Your Payment Gateway
There are various payment gateways available that you can pick for your e-commerce business. Many of those have restrictions on certain products and services that you may intend to sell. While searching for the right payment gateway, you must ask if it has any limitations regarding the products you want to sell. It is also important to check if your payment gateways are hosted or non-hosted and include any required transaction fees, anti-fraud features, termination fees or monthly setup fees. Big e-commerce stores employ multiple gateways which is a smart approach to give your customers a flexible option.
3. Trademarks And Copyrights
Many online businesses owners confused the widely used terms: trademarks, patents, and copyrights, and often use it interchangeably.
According to the US Patents and Trademark Office:
• Trademark is a phrase, symbol, word or design that identifies and differentiates the source of goods of a person or party from others.
• The patent refers to the limited duration of the property of an invention granted by the US Patent and Trademark Office.
• Copyright is related to work of authorship such as music, writings, and art which is expressed tangibly.
Before starting your business, you may need to apply for any of these. Although, it is not strictly important definitely you should check to ensure that you aren’t infringing on others’ business with yours.
4. Restrictions On Shipping
Most often, the shipping companies clearly notify the restricted items. However, every shipper differentiates in these restrictions and ship different products than others. So you need to conduct research, to check whether your shipping company ships the relevant products or not.
The most common restricted items are:
• Ammunition
• Alcoholic beverages
• Aerosols
• Air Bags
• Hazardous material
• Fresh fruits and vegetables
• Poison
Although certain companies allow shipping the restricted products it needs extra fees and paperwork. Moreover, you should also be aware of taxes, duties and customs laws.
5. Business Insurance
With regards to small businesses, there are many types of insurances that include product liability, general liability, professional liability, commercial liability, or home-based insurance.
For this purpose, you must consult the local insurance provider and find out the type of insurance suits you best. The most important insurance type that you must check is product liability. This type of insurance refers to the manufacturers, retailers, distributors or wholesalers who are liable for the safety of the product.
6. Permit and License
Given the type of product you are intending to sell, you may need a permit or license for selling. This depends upon your country laws. Your local licensing department will be of great help in giving you detailed information about the procedure and requirements for obtaining a license.
7. PCI Compliance Business
As online businesses are at risk of data theft, making your business PCI compliance is essential. This is the reason why online business owners take this aspect of their business so seriously.
PCI compliant is not only about providing a safe check out procedure but also avoiding storing any purchasing information on recording or on paper.
8. Inventory
If your business needs to hold substantial inventory, you must check zoning codes to and see if there are any restrictions on the items that you are intending to sell. Collecting information beforehand saves you a lot of legal challenges that may lie ahead in case you don’t pay attention to this aspect.
9. Consider Age Restrictions
In case your products target young children under the age of 13, make sure your business is Children’s Online Privacy Protection Act (COPPA) compliant. Your website should have an age verification code to ensure that the selling is legal and fulfills all legal requirements.
Conclusion
Starting and running a business is challenging enough without having to deal with legal problems. Make sure that your company is on the right side of the law, it will be a wise investment of your time and money!
We hope you enjoyed this article on the legal issues you need to understand before starting a business, planning finances, or investing in a new company.
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