Legal requirements for starting an online business

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It is becoming less expensive and practical for people to start up with online businesses like e-commerce. It's a new way of working anywhere in the world on an international basis. However, people must consider the importance of the legal framework in business online and abroad. Because, even though it may seem really simple to start selling products via the internet (you just need to purchase a domain, build a website and acquire stock), the reality is that in order to do things properly, there are some extra steps.

More than digital marketing: legal requirements

The virtual business world is based on digital marketing strategies, advertising, promotions, and useful tools such as SEO and SEM. However, to start a business and advertise it, the legal and fiscal procedures that apply to online stores must be carried out. The intention is that stores can offer products or services within the legal scope, which is constituted by the following requirements:

The legal form of the business

The company must be created under a defined concept. Therefore, the entrepreneur has to clarify the type of business to be carried out through the Internet. In general, he can choose between an autonomous company (working as a freelance), a limited liability company, or any other of the available types. If the person already owns a physical shop, he only needs to make a declaration to the competent institutions.

The ideal business structure will depend on the commercial law of the country in which the entrepreneur starts operating. That is why it is highly recommended to ask a specialist before the constitution process. 

Depending on whether you would like to sell products overseas or within your country, the answer will vary.

Processing of personal data

Typically, online stores receive and store personal information from users who visit their website. If, for example, you are running online advertising campaigns that use cookies from users who have visited your site, you should then be careful and comply with the specific regulations. 

According to the legal framework, this is sensitive data that should not be sold. It is necessary to protect it to take care of people's privacy.

The most straightforward solution is having a privacy policy, cookie policy, and legal warning sections inside your website that specifically define how is it that you are going to treat user data, and for which purposes.

Comply with sales regulations

Europe uses specific laws to regulate virtual business mobility, product sales, service mediation, commercial ownership, and advertising. 

However, each country is different. For example, Spain has various legal regulations that differ from the rest of the countries within Europe. And those make it a perfect country to initiate your project. You can access more information on how to start a business in Spain here.

The bottom line is that understanding the commercial laws that will affect your daily activities is crucial. And when considering to launch your online business, that is something you should give an eye on.

Registration of administrative information

Before creating an online company, the owner's personal information is provided and an administrative record is made:

  • company name;
  • address;
  • e-mail address;
  • commercial register;
  • professional data;
  • tax identification number;
  • catalogue of products or services;
  • taxes and shipping costs;
  • delivery times;
  • replacements;
  • return policies;
  • payment methods and guarantees;
  • liability for damages;
  • right to withdraw;
  • among others.

Importance of legal codes

To apply the legal steps that are indispensable for the execution of electronic commerce because it includes the codes of behavior of the business. Online stores are in the obligation to preserve the legal notices and the conditions of use of the products or services they offer. In this way, the policies of cookies, the defense of the consumer, and commercial orders must be obeyed because there are sanctions, fines, and closings of the business.