Running an online business can be a cheap and easy way to launch an entrepreneurial career. It is however important that you get on top of a number of basic legal requirements from the outset. You don’t want to end up in a position where a lack of legal diligence when launching your business leads to substantial costs down the track. This article sets out some of the legal steps you should take when setting up an online business.

Website Development Contract – A Must!

Most business owners don’t have the technical skills necessary to build a functional business website. Unless you bring on board a technical co-founder, or have a developer who works in your organisation, you will have to work with an external development agency. It is important that you enter into a written contract with them, setting out the terms and conditions under which they will develop your website and associated code. This document is called a website development contract.

The main issue to look out for is that the copyright developed by the agency will be assigned to your business upon payment of the final instalment. Occasionally developers will try and retain control over the code; this essentially means that they’re retaining much of the value of your business. Don’t allow it!

It’s also a good idea to ensure that the developer who builds your website provides a warranty that he isn’t using a third party’s copyright.

URL – Register Now!

It’s crucial that you register the URL you’ve chosen for your website as soon as possible. They get snapped up remarkably quickly, and running an online business without a URL is impossible! Obviously you will want to check that you’re not infringing on any trademarks or copyrights when selecting your URL. This means checking that the name is not being used by another entity.

The best way to select your URL, if you’re launching a business from scratch, is not to choose a business name then choose a URL, but rather the reverse. You should check if a given URL is available, then register the company with that name. The two searches you should make when deciding on our business name and thus URL are a business name search with ASIC and a trademark search with IP Australia.

Website Terms and Conditions and Privacy Policy

Every website should provide its customers or visitors with both a set of website terms and conditions and a privacy policy. The website terms and conditions govern the terms under which visitors use the website; it’s the contract visitors enter into with you, the website owner. Having such a document in place ensures that customers are clear on the manner in which your website can be used, the responsibility you take for any problems that might arise with the site. Essentially, having a good set of website terms and conditions is a way to reduce the risk of a visitor suing you. You need to ensure that the document covers issues such as who owns the website, who owns the copyright, and how any information on this site may be used. You can also provide a cancellation policy, as well as a refund policy, if you’re selling goods on the site.

Having an up-to-date website privacy policy is also crucial. This document allows you to disclosure the manner in which you will use any information provided to you by your visitors. Recent changes to law made in December 2012 have introduced a range of new Australian Privacy Principles. These set out requirements for dealing with unsolicited information and for reforming the manner in which consumer credit is reported. The changes come into effect in March 2014, and you should check if your business is covered by them.

Conclusion

Starting an online business can be a great way to generate revenue and enjoy a work/life balance. It is, however, still a business, so you need to ensure you’re covered legally. Contact LegalVision today to speak with one of our online solicitors and make sure you follow the tips provided in this document!

Lachlan McKnight
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