The advanced and increased use of online media has made the online business a fast-emerging trend. Every five in seven companies operate online and conduct e-commerce business.
E-Commerce is a term that encloses a broad range of online commercial operations involving a wide range of products and services. It is a sort of commercial transaction which allows the participants to communicate electronically instead of through physical exchanges or direct contact.
Though performing e-commerce may appear easy and cost-effective at first, there are numerous legal considerations that an e-commerce firm must consider and keep in mind before beginning its operations.
In India, legal issues in e-commerce have gone a long way since its beginning and are expanding quickly in the world. Online business is rapidly becoming a prevalent trend, but because one is online does not mean they are immune to legal issues.
With the day-by-day growth of the e-commerce industry, businesses are booming, and many entrepreneurs are beginning their e-commerce businesses. One of the challenges faced by these entrepreneurs is legal issues in e-commerce.
There are diverse legal issues associated with e-commerce businesses, and if they are not taken care of, they can lead to problems.
Common Legal Issues Faced by E-Commerce Businesses
Illustrated below are some of the common legal issues in e-Commerce business:
Incorporation Issues
Not being incorporated is a critical problem if the companies run through a website. Product purchase and selling activity will be deemed unlawful, and one can’t claim their right in case of fraud and corruption. Thus, the business has no shelter without incorporation.
Trademark Security Issues
Not obtaining trademark protection is the primary legal issue in e-commerce. Trademark protection is much needed because it is the symbol of a company and is all over the web.
Trademarks might get infringed on if not protected, and this is a very ordinary legal issue that becomes a danger to an e-commerce business. Because hackers and cybercrime are so common, trademark infringement of the business can be a grave legal matter and may restrict the business’s progress.
Copyright Protection Issues
Using the content of other companies while publishing content for an e-commerce website can be a severe legal issue, and this might be the end of your e-commerce business. The other party can sue your business, even if you unintentionally use their content.
Multiple online sites allow you to access their content and ideas, and you can use them for making web content for your business site.
Transaction Issues
Consumer Law can levy fines on the business if the business fails to provide a precise and complete description of the product, price and purchase details, delivery details when the customer received the products and further information related to exchange and refunds.
Thus we can get into serious law infringement issues if we do not accept the rules.
Privacy Issues
Privacy is the primary issue that creates problems in online businesses, both for the customers and the business. Customers share details online and desire the sellers to keep their information hidden.
Through just a single small mistake and leakage of beneficial details of a customer, one might lose the potential customer along with fame and reputation.
How to Prevent Legal and Regulatory Issues?
You must ensure that you operate within the boundaries of the law while starting your own business. You have to follow the laws to remain profitable and existent.
Nowadays, businesses need to understand the law to safeguard their bottom line and avoid actions that might result in a closeout. On that note, here are a few things you need to keep in mind to avoid legal problems-
Protect Your Reputation
So many small business proprietors don’t heed the warning- be cautious about what you say and do online!
Social media has become a cornerstone of business, but hundreds of horror stories about business owners who have expressed bad behaviour toward customers and suffered the outcomes are known.
Keeping your tone inviting and polite, do not overreact to a complaint or shut down a conversation that makes things worse.
Incorporate Yourself
Many business owners work as only proprietorships. While this is one of the least expensive paths to start a small business, it also holds financial troubles.
The owner’s acquisitions could easily get lost in the settlement or judgment if a company in a sole proprietorship gets sued, so incorporating is a better idea.
Founding your small business as a private limited company, LLP, or OPC will safeguard your investments, and if your business goes under, your life won’t go with it.
Avoid Suspicious Situations
Avoiding clashes of interest and suspicious employees might appear self-evident, yet many small business proprietors fall prey to dishonest employees, contractors, or customers.
Conduct background checks and proper research while employing workers. Direct your customers and clients to pay you on time and obtain all your agreements in writing. Hire a tax lawyer or financial advisor during tax time.
Get Protected
The foremost thing, your business should have penalty insurance in case of damage or an employee accident. Business proprietors take out mistakes and omissions coverage, which covers the business in case a client blames you for a contract violation.
Another way to protect your legal bases is safeguarding your contracts and assuring you are not responsible for events above your control.
Stay Alert
While safeguarding your business from legal trouble, the best method is to be prepared. Back up all essential client details and observe your finances and infrastructure daily.
Keep your protection up to date to avoid any virus attack or malware. Loss of client details doesn’t just cost money or time but can also open you up to possible legal action.
Conclusion
Customers find e-commerce legal issues marketplace a better experience due to the constant change of rules, laws, and regulations. If the laws of e-commerce companies become harsher, they will provide development and vast investments.
The continued growth of laws and rules will make the e-commerce legal problems marketplace a pleasant experience.
Even if the limitations become more restrictive for e-commerce companies, this will ensure their growth and higher investments. Amid this legal turmoil, India is among the few countries to have legislated e-commerce legislation.
Yet, much more is required to manage the tangled network and proper risk management techniques with appropriate lawful documentation help e-commerce companies.
