Legat tips on setting up and running an online business

1.    What is online business?

In this publication, an online business is any business that sells its goods/works/services through any internet resources (websites, messengers, social networks, AI platforms, marketplaces). It can be the sale of courses (weight loss, personal development, psychology, education, etc.), the sale of goods or services, franchising, advertising, channels on YouTube and other platforms, etc.

2.    What are the legal peculiarities of online business?

The owner/manager of the online business must consider the following:

1)    Specific laws regarding payments, advertising, consumer protection may apply.

2)    Platforms (YouTube , Instagram, App Store, Google Play, Upwork, Freelancer, Amazon) may have their own specific requirements. Read them carefully!

3)    Business must be registered and taxes must be paid.

In most cases, licences are compulsory for online business in the same cases as they are required for offline business.

3.    How do you get paid in online business?

The main legal and recommended ways to get paid from an online business are:

• Payment to a bank account or to a bank card of an enterprise/individual entrepreneur, published on the website/platform or sent to the consumer/platform individually.

• Payment via payment systems: financial companies (with the appropriate financial licenses) offer payment processing services (Internet acquiring, accepting online payments), i.a. PayPal, Wise, Payoneer.

C.O.D.

4.    Is it allowed to receive payment on an individual’s card?

Yes, you may. But if you do, you will pay tax as an individual. In most countries, private entrepreneurs have a different tax system from individuals. Consult a local tax adviser or lawyer to choose the most efficient way of getting paid and taxing your income.

5.    When running an online business, what contracts, policies and regulations are recommended/required?

We recommend the following documents for online business publication:

• Public offer agreement

• Confidentiality Agreement (NDA), including provisions on the protection of personal data;

• Payment terms (if not included in the Public Offer Agreement);

• Warranty conditions and conditions for return (exchange) of goods/works/services;

• Terms of use of the site/page/other resource;

• Price list and list of goods/works/services;

• Any other statements and documents depending on the specific project.

6.    Do you have to register a trademark?

There is no obligation to register a trademark. But for online business its highly recommended. The trademark should be registered in all countries where the goods/services/works are to be sold/provided..

7.    Any recommendations on intellectual property rights for online business?

General recommendations are:

• Respect the intellectual property rights of third parties (obtain licences, permissions from copyright holders).

• Enter into agreements with designers, copywriters, photographers, actors, etc. to assign their intellectual property rights.

Formalise any licensing or assignment of intellectual property created and/or published.

8.    Any special recommendations for running an international online business?

An international online business has to consider local law and international agreements. These may referr to:

o   special conditions and restrictions on advertising;

o   certification of goods/works/services;

o   special laws on protection of consumer rights;

o   the need to have a representative in the country (union);

o   special payment terms;

o   special conditions for processing personal data;

o   etc.

In addition, special accounting and taxation rules apply in most cases.

9.    How do you secure/protect your online business?

As in offline business, important components of legal security in online business are proper documentation, correct accounting and payment of taxes, compliance with laws, good corporate structuring, etc.

Zilver lawyers can conduct a legal audit of your online business and provide legal services in the structuring and running of your online business.

10. How do you sell/buy the online business?

The main legal recommendations for selling/buying an online business are

1) Preliminary legal due diligence is recommended, including an analysis of the structure of such a business;

2) the deal requires a comprehensive approach: assignment of trademarks, domain, other IP rights, financial instruments, corporate structure (if applicable).