The Covid-19 crisis has meant unprecedented change to the way in which we conduct business, and more business than ever have moved online. Besides the practicalities of moving your business online but what are the legal requirements you need to consider? E-Commerce is quickly becoming THE way to do business.
- Registration
Even if your business operates from behind a computer screen rather than a shopfront, your business is still subject to various legal requirements. The main ones to think about include:
- Register your business entity and/or business name
- Structure of your business – think taxation issues, income splitting, asset protection, etc.
- Obtain an ABN
- If necessary, register for GST
- Government regulations e.g. relating to your products and/or services.
- Any restrictions on advertising on the products and/or services you provide.
These may seem daunting at first, but it’s important not to put them on the backburner because it can be costly! Work through them one at a time and you will be thankful for it later.
- Consumer Law
The laws regulating business transactions have changed in recent years, and if you’re a business owner you need to know about it! In particular, you should be familiar with the Australian Consumer Law which regulates the majority of consumer affairs and transactions. The most relevant provisions of this legislation are those relating to misleading or deceptive conduct. In practice, this means being careful to ensure all of your products, services and advertisements do not create false assumptions in the minds of your consumers. There is also a requirement to have website terms and conditions along with a privacy policy for anyone who accesses your website.
- Terms of Trade
A business website should clearly state the terms of the proposed sale to consumers (i.e. the terms of sale). Most businesses provide a description of goods, the price, and method of delivery, but what else should be included? Consider these:
- The legal framework applying to your contracts (e.g. State, Federal);
- Any limitations on liability;
- Who bears the risk for loss or damage to goods while in transit?
- Intellectual property issues;
- Rules for delegating contract to third parties; and
- Warranties and/or indemnities, etc.
- Security & Privacy Issues
Online businesses are under constant threat of fraud and hacking from all over the world. When dealing with personal and confidential information such as email addresses and credit card details, it is vital to have appropriate security measure in place. Your business should:
- Ensure all sensitive information is securely stored, or not stored at all.
- Use appropriate firewalls and software.
- Provide a safe and secure online platform.
- Spam
Finally, before you decide to email everyone excitedly to tell them all about your new online business, you need to be aware of the Spam Act. Spam is defined as any unsolicited commercial message promoting goods or services or its provider. Some of the key features of the Spam Act include:
- Imposes civil penalties on businesses that engage in spamming.
- Bans the use of electronic address-harvesting software.
- Requires that emails contain an option to unsubscribe.
Get the Legals done for you!
Business owners face countless challenges every single day, so it’s understandable why many choose to turn a blind eye to the legals. But the truth is, this can be a costly mistake. If you are feeling lost or overwhelmed with getting the legals done for your business, please don’t hesitate to contact me.