Every entrepreneur that starts up a business had profitability and success in mind and from the start of that business, the entity is being nurtured in that line. No business owner wants to be facing issues all of the time and one of the first things they take note of are the laws guiding businesses in their niche. Business law determines the formal process of establishment of a business organization and regulations related to the selling of corporate entities. The right assignment, drafting, work delegations, breach of contract, transactions, contracts, and even the punishments for violation of agreements are all within the scope.
The Amazon case
If a big online company like Amazon was sued recently, then you need to be very careful as an online business owner. There were three reasons why Amazon was sued in 2021. In May of 2021, it was alleged Amazon’s restrictive policies harm consumers by forcing sellers to raise their prices on Amazon and other online platforms, as sellers must account for the fees charged by Amazon when pricing their products. The Amazon team navigated these crises with a lot of business law intelligence. If you own an e-commerce website or online store, you have to stay informed of the online business laws and regulations you should be compliant with to avoid being hit hard by any sanctions. Here are some of those laws.
Trademarks, patents, and copyrights
Trademarks, patents, and copyrights are business intellectual property and hence, protected by laws. A trademark is a word phrase, symbol, and/or design that identifies and makes the source of the goods of one party stand out from those of others. A patent is a limited-duration property right relating to an invention that is granted by the United States Patent and Trademark Offices in exchange for public disclosure of the invention. A copyright protects works of authorship, such as writings, music, and works of art that have been tangibly expressed.
If you follow the right steps with respect to your intellectual property, you will be afforded legal protections that will prevent other brands from using your intellectual property without your consent. As an e-commerce business owner, you must be sure that you are not using someone else’s intellectual property knowingly or unknowingly. It would be a lot of suit sanctions to deal with. Make sure that the name you would be adopting as your company name is unique and not in any way taking something precious from another registered business entity in the country you want to operate, for example, if you’re opening your business in Hong Kong then you have to double-check this information before going about your Hong Kong company registration.
Shipping restrictions
E-commerce shipping could prove overwhelming most times because of the different rates of logistics companies. There are also different rules and restrictions for shipping different types of products. This is usually expressly written out by the shipping companies. Some shipping companies could allow you to ship some restricted items only if you have submitted some other paperwork and fees of course. It is very important to take these into consideration when evaluating shipping providers to know which ones to go for. You can find out more information on international shipping in the Federal Trade Commission’s Electronic Commerce: Selling Internationally guide. This will help you with clarifications on taxes, duties, and customs laws. You have to make sure to abide by these online laws.
Some commonly restricted items for shipping are animals, dry ice, CBD products, fresh fruits and vegetables, explosives, ammunition, aerosols, airbags, alcoholic beverages, perishables, perfumes, nail polishes, poison, and any hazardous material.
Business licenses and permits
This all depends on the type of goods or services you are offering online, you may need a business license to offer those services. For example, in the U.S. you cannot carry out a brick-and-mortar business without a valid seller’s permit. So wherever you are plying your trade, you need to seek out this piece of information very carefully and follow it to the letter. For online businesses, LegalZoom infers that a seller’s permit is only needed when you are dealing with healthcare products or services. However, you still need to be absolutely sure that it is the same rule within your state and/or in your industry.
Payment Card Industry (PCI) compliance
PCI Data Security Standard (DSS) is a commercial security standard introduced by a group of American financial services providers more than a decade ago. Their main objective was to introduce unified standards for processing card transactions securely. They hoped to bring all industry participants to the same level of compliance. This covers not only online transactions but POS transactions as well. As a PCI compliant, you need to provide a secure encrypted checkout experience and avoid storing any purchasing information on paper or through recording (for example, if someone were to provide their card number over the phone). If your plan is to use a third-party payment processor or an integrated POS system, you need to make inquiries about their PCI compliance.
Final word
I once read somewhere that if you do not know about all it takes to start and run a business legally and you do not have the patience to find out, run away from entrepreneurship, and take a job as an employee. This sounds hilarious but business owners who have been slapped with different penalties ranging from paying fees to having their businesses closed down would be able to explain that statement better. I would say that making detailed inquiries about laws and regulations guiding your online business is part of the foundation you are building for your company. Take it seriously so you can stay away from legal penalties.
