Are you planning to become the next big e-commerce startup? Have you finally decided to embark on the journey of realizing your entrepreneurial dream? If so, there are some legal aspects you will need to take into consideration to avoid potential legal issues down the road. This article will discuss three common mistakes e-commerce startups make.
Not Understanding Sales Tax
When you sell products or services online, there are certain tax implications that apply. You must make sure you become educated on how sales tax can impact your business.
While much of this is still being hotly debated, there are some things that you need to take into consideration. In certain states, you will be required to collect sales tax only if you have a physical presence in that state.
This means you operate a storefront or warehouse from where you ship your goods.
In other states, you will have to collect sales tax regardless of whether or not you have a physical location in their state. If you are an online business, make sure you become aware of which states will require you to collect sales tax.
Failing To Protect Your Intellectual Property
If you are an online business, it is important to do your due diligence when comes to protecting your intellectual property. Failing to do this could allow other companies to steal your work and hijack your brand without you having any legal recourse.
There are two types of intellectual property that you will likely need to protect. Obtaining copyright and trademark rights over your intellectual property can be done by filing the appropriate paperwork with the U.S. Copyright and U.S. Patent and Trademark offices.
Copyrights protect original works of authorship. This can include videos, audio, and even mobile apps. If your business has created a mobile app, it is possible that you will need to register it as a copyright to prevent anyone else from using your creation without your permission.
Trademark rights protect any slogan, symbol, or business name that is used to brand your company. Obtaining trademark rights will make it much easier to protect your brand.
While obtaining trademark rights and copyrights don’t automatically keep others from stealing your intellectual property, they do give you greater recourse in a court of law. If someone infringes on your trademark or copyright, and it is registered with the appropriate government agency, you greatly increase the chances that you will be able to use the court system to make them stop, or gain compensation.
Operating an online business means you need to make sure you post notices on your website that inform the customer of your policies. This will help protect you in the event that a customer is unhappy with your service.
Terms and conditions let the customer know your policies for refunds, returns, credit card use, etc. Basically, this lets the customer know what to expect when they purchase from your company.
Having these in place will not only help your customer, it will also help you protect your business. It’s best to have an experienced attorney draft these for you.
Starting an online business is exciting and can be greatly rewarding. Make sure you are diligent about keeping up with the legal side of the business to make sure you don’t run into any legal troubles.