06/01/16

A Legal Guide for Your Ecommerce Startup

Taking your business online is a terrific and exciting growth opportunity, whether you’re a brand new business or an established retailer. For the most part, this is the best time for you to start an ecommerce startup business. The internet has connected the world and now it is possible for most anyone to get going.

However, starting some online storefronts of my own I have learned that with all the advantages out there, there are still some complex legal issues to understand. There are a large variety of laws to take into account, you must remember the law is fluid and subject to change. In order to be rewarded for your online store, you must stay informed to protect yourself and your business.

This information is not meant to be taken as official legal advice. I want to simply make you aware of all the important implications that come from conducting business online. While also, ensuring you know everything you’re doing meets the legal requirements for an online business operating in the United States.

Let’s point you in the right direction.

Trademark

A trademark or service mark includes any symbol, word, or words used or intended to be used to identify the goods/services of one seller or provider, and to indicate the source. U.S. Patent & Trademark Office

In the competitive world of the digital marketplace, a trademark can be a very valuable asset. It differentiates your business from your competitors, carries your reputation, and helps reinforce relationships with your consumers. It’s important to be aware of trademarks to protect your rights and also ensure you’re not infringing on others rights.

The United States Patent and Trademark Office is responsible for registering and enforcing your rights as a mark holder. They’re a resource you can access for information, questions, check the registry of specific marks and begin the registration process of your own mark.

There is no requirement to register your trademark, but there are benefits to your brand if you do. When you do register your trademark, it’s presumed to be your property. Having to prove ownership of an unregistered mark, can be quite difficult. A trademark is an asset to your business that is worth protecting.

Privacy

Spam: unsolicited or undesired electronic messages. You cannot send any electronic messages with the primary purpose of commercial advertisement or promotion of a product or service.

As a business owner, it is in your best interest to collect and use your customers’ information (emails) whether it’s through a purchase they made or by joining an email newsletter. In fact, email marketing is still one of the highest converting sales channels. However, after congress passed the CAN-SPAM Act, it is now an offense to spam and the penalties can be very high.

So How to Avoid Spamming?

This is what’s called “Commercial Messaging.” The law does not ban these but does require the sender to follow requirements. Complying will allow you to maximize your email marketing while ensuring the process is also legal.

Business Structures

Whether you’re just beginning or trying to decide the right structure for your existing company, knowing which structure and the laws surrounding it is vital to your organization.

Sole Proprietorship

This is a type of business that is owned and ran by one person, in which, there is no legal distinction between the owner and the business.

This is the most common structure for online store owners and the easiest to establish. This type of organization is ideal for businesses with a relatively low risk of liability.

Learn more about Sole Proprietorships.

Partnership

A partnership is another structure for small businesses and contains many of the simplicities of a sole proprietorship.

Partnerships are formed when two or more individuals work together as co-owners of a business. This type of organization allows individuals to pool their assets and skills to increase their chances of success

Learn more about Partnerships.

Corporation

Incorporating your business is more complicated than the other two options but it does have many potential benefits for an online business.

Probably the most notable difference with a Corporation is that it becomes a separate entity from you as the owner. This means you’re not personally financially liable for what happens to the corporation, and your personal assets are protected from the liabilities created by your business.

Learn more about Corporations.

Conclusion

Being aware of and obeying the rules that apply to you as an online business owner is an important aspect of running your shop. Protecting your brand, assets, and maintain a positive relationship with your customers can all be affected by your ability to understand and obey the law.

Get more small business tips from Lendio.

About the author

Tyler Heaps
Tyler is a member of the Lendio marketing team. He is passionate about digital marketing, small business, and helping small business owners succeed. Tyler is an outdoorsman and loves spending time with his family.

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