It takes far more than just creating getting product, creating a website, and starting to take orders. There are, quite literally, dozens of legal considerations when creating and running an e-commerce website. The following four comprise a good place to start. Still, it would behoove you to consult an attorney whose focus is business law to get applicable advice on what to do and how to do it. Remember, there could be different laws and/or interpretations of existing laws when it comes to e-commerce compared to brick-and-mortar commerce. Whether you run an outdoor fabrics store or a pet supply store, it would be good to check out a well-thought-out example of an e-commerce site to get design ideas.
Table of Contents
1. What Kind of Business Will You Create?
Are you going to run the business alone? Then, you’ll need to create what’s known as a sole proprietorship. The advantage here is that you’re your own boss. You can do what you want. The downside is that you’re personally liable for anything that goes wrong because you’re synonymous with the business.
Do you have a partner? Then, a partnership is the right choice. There are several different kinds of partnerships, and each has its own rules and responsibilities.
Are you going to issue stock? Then, you’ll need to form a corporation, appoint a board of directors, and hold annual meetings. Your adviser will explain everything to you.
If you want to form a company but don’t want the rigmarole of a corporation, then the best choice is a limited liability company. It’s one of the most popular choices for small businesses because of its simplicity and flexibility.
2. What’s Next?
Once you pick your business structure, the next steps include registering your business in the state you choose, filing the required paperwork, obtaining any necessary licenses, insurance coverages, and permits for your business, and appointing a designated agent. This is the person who will receive all of your paperwork and other items. The person you appoint must have a physical address in the state in which you will register your business.
3. Paying Taxes
Depending on your type of business, you might have to collect and remit sales tax. You have to file sales tax returns separately from your income tax returns. Remember that unless you’re a sole proprietor or owner of an LLC, you’ll have to file two returns: business and personal. Partnerships also sometimes have to file multiple returns, but not in every case. Your adviser can give you the right information. It’s crucial for you to keep complete and exact records of every transaction your business completes. Many business owners hire an accountant or accounting firm to do that for them so that they can concentrate on their business rather than on the mounds of paperwork involved in commercial taxes.
4. Honoring Intellectual Property
You’re entitled to all the benefits of creating your own product. No one is allowed to steal your ideas for products, processes, or services. By the same token, you’re not allowed to take anyone else’s ideas. Therefore, it’s essential for you to perform a thorough search to see if anyone else has already come up with the same product or service you wish to provide. If no one has, then you need to take the right steps to protect your intellectual property. If someone has, then you have to pick something else to produce or to provide.
