What should I know about running an Online Business?

With consumers increasingly shopping from the comfort of their sofas, the online marketplace is an attractive place for a business to be.

And while it can be an easier and less expensive alternative to setting up shop on a high street, launching an online business is by no means entirely straightforward. Aside from sorting out the usual aspects of a new business (legal structure, business plans, and tax formalities, for example), particular legal considerations apply to e-commerce.  

Many of these are to do with the interactions you have with your customers. You’re not dealing face-to-face, so you need to be very clear, at specific points in the transaction, about things including (a) your contact details, (b) the goods or services being bought, (c) the right to cancel, (d) delivery and returns. You must have a secure and reliable payment mechanism in place. Your website should feature well-drafted terms of use. And you’ll need various written policies, not least a refund policy and privacy policy.

In fact, privacy is hugely important. Customers will want to know that the information you collect about them – names, addresses, credit card details – will be dealt with responsibly. There is an Information Commissioner’s Office registration process that businesses handling personal information will usually need to go through. And you will be expected to know and abide by the principles of the Data Protection Act, which include only using the information for the purpose you’ve stated, storing that information securely, and not keeping it for longer than necessary.

Another significant consideration will be the intellectual property that is wrapped up in your business. This can extend beyond a product, a company name and a logo. Consider the ownership and licensing of the software you use, for example, and make sure that proper and effective terms are agreed.  And of course, protecting your intellectual property should help to deter copycats and give you a firm basis on which to raise a legal challenge if necessary.

Those are just some of the e-commerce issues on which commercial lawyers advise day to day. The important point is to get that advice early on – ideally, before embarking on an online venture. Be compliant, and put the right protections in place for you and your business. It really is key to getting a great idea off the ground, and giving it the best chance of succeeding.

If you are in need of specialist legal advice regarding an online business, our business team can help.  Please contact us on 01264 353411, email:  business@bsandi.co.uk or fill out our no-obligation enquiry form.