Welcome to our latest blog series, “Tips from the Top!” Here, we’ll feature interviews from Volusion executives and thought leaders, all to provide expert advice to help you create a thriving online business. By sharing these words of wisdom from our brightest minds, we hope you’ll be inspired to stay at the top of your game. To kick off this exciting new series, check out this helpful advice from our legal expert, Tanya Avila, with “5 Legal Tactics to Bulletproof Your Online Business.”
In this insightful Q&A, Tanya provides a wealth of knowledge covering topics such as ecommerce regulations, best documentation practices and more to help protect your online business. Be sure to check out her answers below to help navigate some common legal questions that arise when starting your ecommerce store.
Volusion is not providing legal advice, rather general advice for readers. For specific information, seek individual counsel.
What are some of the legal issues associated with starting an online store?
There is no material difference between a traditional brick and mortar store and an ecommerce store. Most of the same rules still apply to everyday businesses. However, if you have out of state remote employees, you may need to consider tax issues, insurance and state/location employment laws that apply. In this case, you may want to consult with and set up policies with a lawyer.
Is hiring a business law attorney necessary?
Not usually at first, but at some point in doing business you will need a lawyer. Lawyers can help with setting up the corporate structure, creating contract templates and employment policies, protecting IP or defending or instigating litigation. You won’t need it all at once, but it is helpful to find a good lawyer before you need one. It doesn’t cost anything to find a lawyer, so be proactive with this. There are also a lot of things you can do without a lawyer. There are services like Legal Zoom or Pre-paid Legal that can assist with basic and simple matters, but for complicated issues or ‘bet the company’ matters, hire a good lawyer.
- If you have a sole proprietorship, check out sites such as legalzoom.com to have a lawyer help you begin setup
- If you have a partnership, you should have an attorney involved
How do I know which legal structure fits my business?
It depends on the level of sophistication, risk and maturity of a company. If you’re uncertain, consult an attorney. The decision you make on this will impact your business for years, but generally you’ll fit into one of the following categories:
- Low risk (just you) – Sole Proprietorship
- Medium risk – LLP, LLC
- High risk companies – Inc.
- You, plus another person(s) – Partnership
What other online regulations exist? What types of legal regulations exist for marketing a product?
Regulations are currently being discussed to require that sales tax be captured by the seller in all transactions. These regulations haven’t received much traction in Congress yet, but it is something to keep an eye on. Other than that, if your industry is regulated off line, it’s also regulated online. Keep in mind there are some regulations that may vary state by state. For example, you are not allowed to directly ship alcoholic beverages to the consumer in some states, but can in others. Do your research if you’re selling anything that has off line regulations.
As far as marketing regulations are concerned, it’s important to remember that the internet is international, so be sure to include a disclosure that includes where your business operates. For example, Volusion notes that all transactions take place in Texas, USA; you can adjust your Terms of Service to curb some of the questions about this. Similarly, all of our contests are generally restricted to US entrants because of the variety of rules regulating contests in other countries.
What types of documentation should you keep for an online business?
The documentation you should keep on file would be the same as for a brick and mortar store. You’ll probably want to keep two years’ worth of receipts andother records pertaining to your customers unless there is a significant burden in doing so. The level of recordkeeping truly depends on the industry. It’s best to consult with an attorney on best practices if you’re in a highly regulated industry.
That wraps it up for this Q&A session. For more can’t miss legal insights, check out our next edition of Tips from the Top as we continue to dive deeper into critical legal questions that will keep your online store in tip top shape.
Tanya Avila was named General Counsel of Volusion Inc. in October 2010. Avila oversees all aspects of Volusion’s legal affairs around the world as well as managing Volusion’s compliance and brand enforcement efforts.
Avila began her legal career at internet giant GoDaddy.com in Scottsdale, Arizona. Her passion for technology and law provided unique insight into matters related to new product development, hosting liability, and brand protection. After moving to Austin, Texas, Avila served as General Counsel for Wincor Nixdorf USA Division. In that capacity she was responsible for the operation of the US legal department of an international leader in financial and retail technology.
Avila is a graduate of Arizona State University and Arizona State University College of Law. She is a member of Arizona and Texas bars. In her limited spare time, Avila enjoys spending time with the future boy band, ‘The Avila boys,’ otherwise known as her sons Zander, Gabriel and Slate.