Legal Considerations for Online Businesses and E-Commerce

In today’s digital age, launching an online business is easier than ever. Whether you’re selling products, offering services or running a subscription-based model, e-commerce opens the door to customers far beyond your local area.

But while setting up a website or opening a shop on platforms like Shopify, Amazon or Etsy is relatively simple, running an online business comes with legal responsibilities that many entrepreneurs overlook. Ignoring them can expose your business to unnecessary risk, or worse, legal trouble.

As a business attorney, here are the key legal considerations every online business owner should know:

1. Choose and Formalize Your Business Structure

Before you make your first sale, ensure your business is legally structured to protect your personal assets.

• Consider forming an LLC or corporation for liability protection.

• Separate your business and personal finances to avoid legal and tax complications.

• Register for any local business licenses your state or city may require, even if your operations are entirely online.

2. Protect Your Brand with Trademarks

Your business name, logo, and tagline are valuable assets. Without proper protection:

• A competitor could use a confusingly similar name.

• Online marketplaces could reject your intellectual property complaints if you don’t own the trademark.

Solution: Register your trademark at the federal level to secure your rights nationwide.

3. Have Website Policies in Place

If your business has a website (and it should), you need the following policies:

• Privacy Policy: Required if you collect any personal data, including emails for newsletters.

• Terms & Conditions: Set the rules for how visitors can use your site and limit your liability.

• Return/Refund Policy: Especially critical for e-commerce; clear terms reduce disputes and chargebacks.

These policies should be tailored to your business, not copied from another website.

4. Comply with Online Sales and Tax Laws

Selling online often means selling across multiple states, and that may trigger sales tax obligations.

• Many states now require sales tax collection if you meet a certain threshold of sales in that state (called economic nexus).

• International sales may trigger customs, duties and VAT compliance.

Work with an accountant and attorney familiar with e-commerce to stay compliant.

5. Protect Your Business from Liability

Every product or service you sell online carries potential risk.

• Include disclaimers and liability limitations in your terms and product descriptions.

• Purchase the right business insurance for product liability or cyber risk.

• If you use third-party sellers or dropshipping, ensure your contracts protect you from their mistakes.

6. Secure Your Content and Digital Assets

From product photos to blog posts and social media, your content is intellectual property.

• Use copyright notices to protect your work.

• Obtain licenses for any images, music or third-party content you use to avoid infringement claims.

An online business is still a real business, and it must comply with the same, and often more complex, legal rules as traditional companies. By proactively addressing your entity structure, contracts, website policies, IP protection and tax compliance, you can operate confidently, avoid costly mistakes, and focus on growing your digital brand.

Please contact Serna Legal Services at (312) 601-9859 or info@sernalegalservices.com if you’d like to learn more about protecting your online business.

This content is published by Serna Legal Services, LLC and is available for informational purposes only and is not considered legal advice on any subject matter. By viewing this content, the reader understands there is no attorney-client relationship between the reader and the publisher. The content should not be used as a substitute for legal advice from a licensed professional attorney, and readers are urged to consult their own legal counsel on any specific legal questions concerning a specific situation.