Starting a business is always exciting! In building your business, you are probably spending a majority of your time perfecting the layout of the website, your products, packaging and all the minor and major aspects of how your vision will be executed. What you likely have not been as excited about is managing the legal requirements of an e-commerce business (and we don’t blame you).
Gladwin Legal frequently provides legal advice for e-commerce startups, so we know that the urge to skim the legalese can be tempting. However, there are a number of risks and obligations that you will be need to be aware of to position your business for long-term success.
We have prepared 5 tips for starting an e-commerce business that we believe are the need to know.
Of course, one of the first things you will need to do is give your business a name.
This stage can be very tricky and we have seen businesses fall into re-branding situations because this initial stage was not carefully considered. When picking your brand name, the less descriptive your brand name is, the greater protection you will likely be able to obtain in your eventual trade mark registration. While using descriptive words in your branding can be tempting, it will be very difficult to enforce as IP Australia is reluctant to allow a descriptive word to be trademarked when it might need to be used by others in the industry.
We have expert IP lawyers with who can provide tailored legal advice for e-commerce startups. Learn more about our trade mark service.
- Do your research
It is also very important to consider your long term business strategy early on. That is, do you see this e-commerce business as something that you will grow and run for the next 15 years, or you intending to establish the business to sell or are you looking for external investment?
Depending on what your vision is for the business, the legal requirements and processes will change, including any, written contracts, licences and permits and the business structure you chose.
To discuss the legal requirements of an e-commerce business, contact our e-commerce lawyers today.
- Get agreements in writing
One of our key tips for starting an e-commerce business is to avoid “handshake agreements”. When money is involved, it is important to have the terms of any agreement to be formalised in writing. This will avoid a “he said, she said” situation that can be costly to resolve, especially in the early days of your business.
We suggest, at the least, having formal contracts for:
- Supplier and distributor agreements
- Employer and contractor agreements, and
- Partnership and shareholder agreements.
- Intellectual property
As you likely have painstakingly established your brand, your intellectual property becomes one of your most valuable assets. Protecting your intellectual property through trade marks is important. This protects you from a costly re-branding situation.
Learn more about our trade mark service.
- Be aware of the laws
Finally, and importantly, depending on what goods or services you are intending to sell there may be additional legal requirements for selling online in Australia that must be complied with.
- The sale of food and drink will be governed by Food Standards.
- The sale of goods and services will attract various obligations under Australian Consumer Law.
- Collection of personal information will need to be in compliance with Privacy Laws.
- Payment processing may require PPC compliance.
We are experts in e-commerce and start-ups. Find out how we can help you today by contacting our team.