We have talked about various aspects related to running an internet home business, from creating your private work space to running your marketing campaigns on the social media. Today we feel that we need to discuss one of the basic and most important aspects related to running your own business: the legal aspects. A lot of entrepreneurs are still confused about their legal obligations as business owners, because they do not really feel that they are running an actual business if they are operating from their home.
Let us clear this up once and for all: if you are selling products or services, or even your skills and expertise in a certain niche, you are running a business as defined and regulated by the law.
So, these are the main legal aspects you need to consider before starting your home business:
1. Registration and Taxation
You need to register with the IRS for taxation purposes. This procedure varies from state to state and if you are in doubt, you should hire a tax consultant to help you with the paperwork. However, your registration should be completed and you should have a taxation code before you start running your business (or at least before you make the first sale).
Attention: you are eligible to deduct some of your expenses for business purposes, such as internet, electricity and telephone fees. Ask the tax consultant about the adequate way in which you can determine the level of deductions.
2. Insurance
Once you start running your own business, you are liable to pay your own health, life and dental insurance. If you were never in the position to search and compare offers from insurers, you should proceed with caution and ask for advice if you are unsure which is the best option for you.
Also, you should consider the need for liability and business property insurance. The former is useful in case an angry customer threatens to take you to court, and the latter to protect you if an act of nature destroys a part or all of the property and assets you use in running your business.
3. Terms of Service and Privacy Policy
You must include information regarding terms of service and the privacy policy regarding cookies for the users browsing your website – it is a legal requirement. These documents establish a few important elements in relation to website users:
⦁ You state your copyright over every element of your website: design, photographs, text, etc.
⦁ You waive any liability relating to any negative effects on the website users and their computers caused by viruses which may affect your website.
⦁ You take responsibility for the safe keeping and non-disclosure to third parties of any personal data website users give you while engaging with your website (email address, name, and credit card information).
Whenever in doubt, hire a lawyer to draft your terms of service and privacy policy in order to protect your business from liabilities and lawsuits.
4. Patents
As an internet business operator, you are creating digital properties – some of which may be your own invention. You should investigate to what extent you can register them with the Patent Office so that you can protect them from being used by others without paying intellectual property rights to you.
5. Spam
This is a sensitive issue you should be aware of. As a new business owner, you want to let everyone know about your products or services. However, there are laws against unsolicited emails.
Also, each email you send out should contain a disclaimer in the footer and advising your addressees on the ways in which they can opt out from receiving further email communications from you. Once you receive an unsubscribe request, you must comply with it and refrain from emailing that person.
These five legal aspects are very important to make sure that you run your business in full compliance with laws and regulations, and in order to protect yourself from legal actions in the future from people you interact with in the course of your business operations.