The Legal Things You Need to Know to Start an Online Business

Starting an online business may seem very straightforward, but unfortunately, it is not. There are many legal aspects one must take into consideration when embarking into online business. If you can manage to manoeuvre through the complicated legal processes required, and remain determined, then you can achieve financial independence and reap the rewards of online business.

This page will seek to list some online laws that you must know before starting e-commerce or any other online business. Adhering to online law is paramount to a successful business, and while it may seem confusing, with a little research, you will become a professional in e-law.

Here are the legal things you need to know in order for you to start an online business.

If in Doubt, Contact an Attorney

As a disclaimer, before the list begins, if you have any trouble understanding the complexities of online law, it is best that you consult a digital attorney – there are many attorneys who have studied online law extensively – if you cannot get to grips with it, it may be worth contacting one. Deciding to use an online law firm can mean that you avoid any trouble that could potentially come your way. Online law can result in huge fines and penalties, forsaking it can be a big mistake. If this list makes no sense whatsoever to you, then do the right thing and save yourself the trouble; contact an attorney.

Online Taxes

Every country has different rules and expectations regarding tax. You will have to do significant research to determine whether or not the country in which you are marketing your product or service requires tax. In Britain, for example, VAT (value-added tax) is applied to all non-essential items. In New York, clothing is taxed, and in California, selling anything in a plastic bottle carries an eleven cents recycling fee. The rules and regulations governing online tax are constantly changing, so it is important you speak to a tax professional in order to clear yourself and ensure you do not fall afoul of any government tax laws.

Payment Gateways

You will need a payment gateway for your e-commerce or online business. However, you must vet your payment gateway as many have limitations around specific products. Some payment gateways are hosted, some include anti-fraud systems, and some require fees, whether it be transaction, termination, monthly, or setup.

Trademarks, Patents, and Copyrights

These are laws every business, whether online or offline, will have to deal with. Trademark, patent, and copyright law are stringent and unforgiving. You must thoroughly research both your brand name and service to ensure that it has not been previously copyrighted and is not the property of another person. Falling foul of online trademark, patent, and copyright law can see you winding up in court subject to a settlement hearing, which providing that you did not do research and ended up breaching copyright, will likely result in you having to pay huge penalties and fines which will be determined by how much profit you have made.

Shipping Restrictions

Some countries are completely inaccessible, and you cannot ship to them, and others have stringent laws regarding what can and cannot be shipped into them. In some countries, they will allow you to ship restricted items providing you pay extra money and provide extra paperwork. Shipping restrictions can seriously hinder your business model if you are selling items prohibited by some countries, so you should give serious consideration toward your business model and ensure that you are not going to set yourself up for failure.


Some items require you to have a license to sell it. If you are caught selling items that require a license without one, you can be arrested and wind up facing a period of imprisonment. This can worsen tenfold if you combine the previously mentioned point and are found to be selling items that require a license into countries wherein they are prohibited. This is a very common crime committed and can result in huge penalties, and as previously mentioned, imprisonment. Do not risk it and ensure you have the proper licensing for your business, otherwise, you may find yourself in a lot of trouble.

Business Insurance

Business insurance is still something you will absolutely need, regardless of whether you are online or offline. Be sure to apply for business insurance as soon as possible so that if any data breaches occur or anything goes wrong in your business you will be able to make a claim.

Now you know some things about online law that you must know before starting an online business. The internet abounds with opportunities to make money, but you must ensure you act in accordance with digital law, as you would in the real world.

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