Recent reviews have shown that every 5 in 8 businesses which are in operation also manages an ecommerce business. This is due to online media continuing to expand, which had positively affected online businesses which have flourished beside this rising trend. Still, businesses that operates either online and offline are prone to legal implications if they do not follow the law.

There are many legal issues that can occur within ecommerce businesses because of the industry it operates in. Therefore, if these issues remain unresolved, they can lead to disputes which will be problematic for your online company not just in reputation, but financially and daily operations.

To prevent these problems for business owners, we have curated the most common legal issues that have been encountered by eCommerce entrepreneurs. So, hopefully this will be useful for you.

Incorporation problems

If your business is not incorporated, it can create major issues particularly if all your business activities are based online through the website. This is due to the fact that if the business owner do not register as a company, you are at the risk of being unprotected from debt and bankruptcy. Being incorporated as a company separates the legal and financial entity from you as an individual. Therefore, most business owners integrate their online business to be guaranteed personal liability protection from possible debts or bankruptcy. In turn, this protects the business owner’s assets. Nowadays, it is common for an individual to rush and set up an online business and shop, and neglect registering their business. So, if things take an unexpected downturn, debts can increase and the business owner will be liable for their debts.

Furthermore, it looks professional to incorporate the online business as there are tax benefits for the business owner. So, if an investment and employing more staff is on the agenda for the future, registering as a company is an essential step to aid future growth.

However, although being registered as a company gives a security blanket, it does not completely protect the business from any criminal charges.

Taxation

As a legal business, you can not completely avoid paying tax in the country that you are operating in. Even if you do not operate a physical store, the same rule still applies. Hence, it is the business owner’s responsibility to abide by their local taxation laws as they are purchasing and selling products. Tax avoidance is a serious offense, and failure to pay taxes can result in legal action against the company, and causing the business owner to pay out heavy fines.

It is a misconception that you do not need to pay your taxes just because the business is based online. So, it is the business owner’s responsibility to contact their government tax department to gain the full information on what they owe and need to pay. Still, it must be remembered that depending on the industry that the business operates, and they may payout differing tax levels. So, do ensure that you have conducted your research properly, and that the matter is not delayed until it is too late.

Copyrighting

It is essential that copyright is taken out to protect the integrity of the company, and this is applied to the branding and content that is on the online website.

It is only the owner of a copyright who has the exclusive rights to:

  • Copy and reproduce the work

  • Modify the work

  • Distribute the work to the public

  • Display the work in public

  • Perform the work in public

  • Control their product design

  • Control their brand imagery

  • Control their logo design

  • Their naming rights

Issues that recurs for copyright cases is often related to copy and content. This is usually connected to online text, media content such as images, music and videos. Although it is not a legal requirement for business owners to register their work for copyright protection, registering their work can still grant them clear conscience that their work is protected by copyright. This is applied from the date of registration, so the owner of the copyright has the control and right of their work. So, this will aid the business owner in the case of potential legal battles. Furthermore, you can seek advice from employment lawyers which will help to solidify your case.

When you see the word “Public Domain” online, this does not allow you the right to use it freely. This is only related to the material in question that does not need copyright, or the copyright protection has expired. Hence, should you be in a situation where you are not creating the content, you should purchase warranty from the licensor or seller that specifies the seller owning the copyright, and allowed you the same protection from someone who may attempt to sue you for using it. Further details regarding copyright law can be found here.

The importance of brand Identity

Brand identity is the most important feature that can distinguish your brand online. Numerous businesses and products are made available at an instant to consumers within one click or touch of a button. There is pressure to keep your marketing and PR distinctive, and this is important when you compare it to the competitor.

To start, you must review and obtain the rights of your domain name and website address. Therefore, it will make it easier to for your target market to distinguish your brand name, and reflecting your business. From a legal point of view, care must be taken to ensure that the name is not already claimed by another business. So, your brand name and logo must not be similar to another copyrighted material, otherwise this can incur a legal battle. Websites such as Companies House can be visited to verify you do not choose something that has already been acquired.

You are more likely to be prone to identity theft when your brand starts to gain popularity. This is due to fake websites and fake social media pages can redirect traffic that could have gone to your brand. To prevent this from happening, you can learn how to safeguard your brand from scams and SEO manipulation.

Trademark protection

To avoid legal cases, it is highly recommended that you trademark your brand logo and brand name. This is straight forward enough to set up with the help of Manchester Solicitors as this helps to ensure your competitors do not imitate your brand. Having a trademark can protect your name, and full control of taking legal action against businesses infringing your product. Therefore, business owners need to be aware, as the trademark or patent office does not tend to include the domain name as a trademark. This can only be done if the domain name is exclusive.

The importance of Privacy Policies

Business owners often overlook privacy policies. This can be detrimental for the online businesses, as privacy is a major threat. This can cause major concerns for the consumers, as they expect their information to be confidential and safe when they share it with businesses online. In addition, consumers hold full legal rights for their information to be safe, which is why the domain also need to be secure should a business owner decide to sell any products online on their website. This can be done by having a secure certificate otherwise known as HTTPS on your website. Through this method, personal details such as banking details can remain secure. Besides, it is a costly affair for the business if any information and privacy of the consumers are leaked to hackers, particularly if legal proceedings are involved. You can lose your reputation and custom as well. Ergo, it is important to follow legal procedures and conduct your research to avoid any legal threats that may ensue.

eCommerce companies and its frequent legal challenges

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