Most successful online businesses attain that status by avoiding key mistakes. The e-commerce world is guided by rules and regulations. Failing to appreciate the legal aspect of starting or running an online business could land you in legal hot waters, cost you money, and damage your business credibility. Here are five legal steps to follow while starting an online business:
Registering As a Legal Entity
It is important to first register your company as a legal entity if you wish to run ecommerce activities on the company site. You’ll want to incorporate your business to reduce certain legal risks. Also, on incorporation as a limited company, your business becomes a legal identity on its own, separate from your personal assets.
Terms of Use
Terms of use are like a contract between you and your site visitors. It is a set of rules and regulations your customers must follow when they visit your site. It covers a lot of things like product damage, return policy, product misrepresentation, product quality, warranty, personal injury, safety, etc. Also, ensure display links to terms and conditions at a visible location on your site. Translating the terms document to languages other than English is advisable if you have international customers.
Product Liabilities
It is a misunderstanding to think that product liability will affect only the manufacturer. Even a reseller of defective or dangerous products can be held responsible. It is your responsibility also, as a reseller, to ensure that the products you sell online are not dangerous or defective in any way.
Using a Partnership Agreement
Failing to outline what duties a company partner will have and what rights to the business they may own are some of the most common legal mistakes. An easy solution is to use a partnership agreement that clarifies all this in a single document.
Agreements With Online Service Producers
From website designers and hosting platforms to advertisements, ensure that you always have written agreements with any contractor that provides online service for your ecommerce business. Making provisions for intellectual property ownership will also be useful in avoiding issues.
