Legal Basics for Online Merchants - Priori

Legal Basics for Online Merchants

By Basha Rubin

Originally published on Opensky's Blog.

The law has a serious impact on you as an online merchant—even if it’s the last thing you want to deal with. From protecting your creations against copycats to negotiating the best deals with vendors, getting legal right is crucial for your business. In the long run, investing in legal advice in the following areas can save you time and money.

1. Corporate Form. If you’ve never filed any paperwork to establish your business, you are probably running a sole proprietorship or partnership. While that might seem easy in the short-term (especially if you also have a day job) you may want to consider establishing your business as an LLC or corporation to minimize liability and protect your personal assets. A lawyer can evaluate your particular situation and recommend which arrangement is best for you.

2. Vendor Agreements. As your business grows, you’ll probably work with a range of vendors to produce goods or source different materials. Lawyers help minimize the risks of these relationships by offering expertise in:

  • Drafting. Lawyers can create versatile templates for vendor agreements to allow deals and decisions to be made quickly, while limiting risk and liability.
  • Negotiating. Lawyers can advocate to remove detrimental clauses (example: impossibly short delivery time-frames) and achieve a better price overall.
  • Resolving Conflicts. When a dispute arises, it is imperative to seek legal advice quickly in order to assess your obligations and options for resolution.

3. Employees and Independent Contractors. If you hire employees or work with independent contractors to design, produce or sell your goods, lawyers can help with:

  • Drafting. When you hire employees or work with independent contractors, a lawyer can craft high-quality agreements that are tailored to your business. For example, a lawyer can help make sure that you own everything that your employee or contractor creates, and can address how your employee or contractor can use or display those works.
  • Worker Classification. Misclassifying someone who functionally is an employee as an “independent contractor” can be extremely costly. A lawyer can advise you on the rules and regulations for working with independent contractors to make sure you don’t wind up on the wrong side of a big tax bill.

4. Brand Protection. When you sell product online for the world to see, it is particularly important to protect your intellectual property from competitors and retain rights in your innovations. Consulting a lawyer can help you better understand your rights and what innovations you need to protect.

  • Trademarks. Any word, symbol, or phrase used to identify and distinguish your company’s products can receive federal registration and protection. As you establish your business with customers, you’ll want to protect your unique name and logo so you can build your brand.
  • Copyright. A copyright protects “original works of authorship.” While you do not need to file with the U.S. copyright office, it is recommended and might give you a leg up if there is an issue later. A lawyer can help guide you understand what to copyright and how to do it.
  • Patents. If your business has invented a non-obvious and novel product or business method, you could receive federal patent protection.
  • Copycats: Infringement. If you notice someone has co-opted all or part of your work, a lawyer can help guide you through the process of getting them to remove the infringing work—from a letter, hopefully, to litigation, if necessary. On the other hand, if someone has unjustly accused you of infringing, a lawyer can assist and protect your brand.

Priori’s network of vetted lawyers have specialized experience handling these and any other legal issues your business may face. Request a lawyer through Priori for free.


Photo Credit:

dawnfu via Pixabay

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