Ecommerce - if I want to start an ecommerce business, what do I need to worry about legally?
3 attorney answers
Are You Planning on Opening a New E-Commerce Website?
There is much you need to know as you begin your new business. I suggest you do not attempt to write your own legal policies. This is not where your training and background lie, and though you are probably as smart as an attorney, you do not have their experience.
Below is a checklist for legal issues I use for new e-commerce clients.
1. Business Model – Is your idea viable as a web based business?
2. Business entity - Are you going to be a C corp, an LLC or a sole proprietorship?
3. Terms of Service - This is your contract with your visitors and is the most important item for any e-commerce site. A little work here brings big dividends in the future.
5. FTC guidlines - The FTC has been regulating business advertising for almost a century. All of their advertising guidlines apply to e-commerce sites.
6. Domain Name issues? Is your name available. Can you create a Trademark?
7. Trademark - Do you have a brand name free from conflict? Should you start with just common law rights? Should you register the mark, and when?
8. Copyright - If it is on the web, it already belongs to somebody. Did you buy a license for the images you are using? Do you have a DMCA notice on your web site?
9. Do you need a DMCA policy?
10. Web Site security issues?
11. Do you need and have an EIN? You can get that for free.
12. Do you have employees? - If so you need written policies regarding their authority and use of the internet.
13. Do you know the difference between a "browser wrap" and a "click wrap" and which do you need?
When I discuss this list with clients other issues arise. Finally, I always discuss with my clients their need for good accounting services. An accountant's advice as you start up can save you many dollars in tax that you might not save if you wait to speak to an accountant until your first tax return is due.
I hope this list will give you pause to think about those issues for which you might need to seek professional advice.
You may want to discuss your situation with a lawyer in more detail. Most lawyers on Avvo, including myself, offer a free phone consultation.
Andrew M. Jaffe
Attorney at Law
Practice Limited to E-Commerce and Internet Law
This post is provided for general informational purposes only and is not intended to be legal advice specific to you. This general information is not a substitute for the advice of an attorney in your jurisdiction. The attorney client relationship is not established by this post.
There's a lot to consider, much more than can be succinctly and thoroughly set out here. Like any business, you should have a business plan first. In the course of preparing that, you will work through hundreds of "what if" scenarios and in doing so, you will better define your legal questions and concerns so they can be answered for you. There are issues that pertain to ecommerce businesses in general and some that pertain to specific types of businesses. Thus, it is necessary to know a LOT more about your plans or goals before an attorney can offer useful advice that is specific to you. As to registrations, the first will be what type of business entity will best suit your objectives, again, without knowing what those are, we can't analyze it for you. I recommend you contact some local attorneys and arrange to have a consultation to discuss some of the "what if" issues and then go from there. Good luck!
Ms. Brown may be reached at 718-878-6886 during regular business hours, or anytime by email at: [email protected] All of Ms. Brown's responses to questions posted on AVVO are intended as general information based upon the facts stated in the question, and are provided for educational purposes of the public, not any specific individual, and her response to the question above is not legal advice and it does not create an attorney-client relationship. Ms. Brown is licensed to practice law in New York. If you would like to obtain specific legal advice about this issue, you must contact an attorney who is licensed to practice law in your state.
First get a handle on the various questions that arise when starting up any business. This includes figuring out what products or services you'll offer and how you would market them and then deliver on your promises. Be sure to clear the name of the business and its proposed products and Internet domain address(es), and choose to form a business entity that will provide the kind of financing, cash-flow and corporate veil that's optimal.
Assemble a set of trusted advisors, including a business lawyer and an accountant, as well as some folks who've started up their own businesses.
There are myriads of books about business startups. An particularly interesting example of the genre, published just 2 weeeks ago, is Disciplined Entrepreneurship, by Bill Aulet. http://www.amazon.com/Disciplined-Entrepreneurship-Steps-Successful-Startup/dp/1118692284/
Next, consider the differences between doing business in cyberspace and the traditional brick-and-mortar model in realspace. If you cannot see your customer across the counter, how do you know who s/he is? This includes dealing with restrictions on online transmissions and transactions with youngsters.
Another is that geographic and government borders become less a barrier, particularly if your product or service can also be delivered via the Internet. But beware of the pitfalls of not only interstate transactions but international transactions. For example, the data you obtain and retain from customers in Europe would need to be in accordance with the more stringent European privacy laws. Are you willing to be hauled into court in a distant jurisdiction?
Also be aware of the problems of maintaining cybersecurity, especially protecting individual identifying data as to your customers, and the obligations imposed by each jurisdiction (and in the U.S., on a state-by-state basis) to notify the government and individuals when their identifying information is compromised.
This posting is intended for general education and isn't "legal advice." It doesn't create or evidence an attorney-client relationship. You are encouraged to engage an attorney in the pertinent jurisdiction for confidential legal advice on matters of any importance. -Gerry J. Elman, J.D. Elman Technology Law, P.C. Swarthmore, PA www.elman.com