Starting your own e-commerce business? If yes, then check out our legal checklist to work through the process to ensure you have your ducks in a row and avoid any potential legal issues in the future.
Checklist for starting an e-commerce business in BC:
Select a Business Structure
Before you start your e-commerce business, you need to choose a business structure. You can’t register your business name until you’ve decided on which one will apply to your business. The three main business structures in BC are:
- Sole Proprietorship
Each business structure has important implications for liability, succession planning and taxation.
Read about the pros and cons of each one in-depth here.
Decide On Business Name
So, you’ve decided to start your own business – now you have to create a business name that accurately reflects your business, is easy to pronounce, and most importantly, is unique!
You’ll want to ensure your e-commerce business name is exclusive to you for the following reasons:
- You need to purchase a domain name for your website (If another business shares your name, you’ll have trouble getting the domain name you want, not to mention the social media handles)
- If you have a similar or shared business name, you’ll confuse consumers
- If someone has Trademarked the name you want to use, you may run into potential legal issues
Note: If you decide on a sole proprietorship (self-employed or contractor) as your business structure and operate your business under your own personal name, you don’t have to register your business. However, it may be helpful to register your business name even if you’re using your own name, because should a dispute ever arise with another business that has a similar (or same) name to yours, having a Registered business name will come in handy during dispute resolution proceedings.
Get a Business License
One of the most essential legal requirements for starting your own business is the need for a business license. Depending on the industry of your business, you may be required to obtain different types of licenses and permits.
Business licenses are essential because:
- By following regulatory standards, they protect the health and safety of the public
- They help identify your business and hold you accountable
- They ensure your location is zoned properly for your business
Government agencies have the right to fine or even shut down businesses that are operating without the required licenses.
Register for your Business License here.
If your e-commerce business needs to outsource tasks to contractors or use suppliers, then you need to ensure you implement good legal contracts. Contracts with your suppliers will define the services they are providing, outline responsibilities and identify priorities.
Key elements of a supplier contract include:
- Services being provided
- Payment terms for all goods and/or services
- The expected timeframe for deliverables
- Confidentiality and non-disclosure provisions
- Termination conditions
- Provisions for legal and regulatory compliance
Supplier contracts should protect you and your supplier. In order to do so properly, we recommend having a lawyer create these contracts to write the clauses and terms that protect your business in the case of a dispute. If you prepare them yourself, or find a template online, your contracts should be reviewed by a lawyer to ensure they reflect the laws in BC.
Set Up Tax Accounts
You’ll need to register with the Canada Revenue Agency for a Business Number for tax purposes. You’ll need a Business Number when applying for program accounts such as GST, corporate income tax, payroll deductions, WorkSafeBC or import/export tax with the CRA.
Learn more about business taxes here.
If you’re in BC, a great resource for all things business is Small Business BC.
If you’re still unsure about any legal requirements for starting your own e-commerce business, then contact us today. We’re here to help your small business succeed!