How to Start an Online Business – Australia's No 1 Legal Guide

Updated: Mar 15

If you are considering starting an online business in Australia, it is important that you understand the legal requirements. In this guide, we’ll step you through what you need to set your business up for success and ensure your new online business complies with the law.






Author: Farrah Motley, Legal Principal of Prosper Law and an eCommerce lawyer.


Choose a brand name and attend to registrations


Choosing a brand name can be a challenging task. A good brand is not just a sleek logo on your business card. And it's not good because you like it. It's good because it communicates something to customers and conveys something about your business.


Choosing the right brand name is a crucial aspect of a business. In legal parlance, it is called a trademark. Every business needs a brand name, whether it's a multinational corporation, a medium-sized company, or a startup. A brand name helps to create recognition in customers' minds and distinguishes your products and services from those of your competitors.


When choosing a brand name, you must be prepared to walk a tightrope between the legal and commercial aspects. For example, you may have chosen a name that has excellent marketing value but scores poorly on the scale of registrability and enforceability.


Therefore, it is important to choose a trademark that is easy to register and that can be enforced against third parties in case of misuse. An eCommerce lawyer can help with this.

When starting your online business, you should first research possible online trade names.


You should ensure that:

  1. the brand name is not already taken

  2. the name you choose is memorable and cannot be easily misspelled

  3. both the domain and the traditional business name are available

Therefore, you need to research before choosing a brand name for your online business.


First, this will tell you if someone else has already adopted your proposed brand or uses a similar brand. This is because if you use a trademark that is already being used by someone else, you could risk a trademark infringement lawsuit.


Second, it clearly lists any previous trademark registrations or pending applications that are likely to prevent you from registering your trademark with the trademark registry in the future. This will save you time and money on applying to register a trademark that has little chance of actually being registered.


An eCommerce law firm can assist you with this process.


What can you do to choose the right brand name?


  1. type ideas in your browser's address bar to see if the domain name in question is already taken

  2. check what appears under that name with a Google search - you do not want to be associated with groups that may negatively impact your reputation, like gambling sites

  3. make sure that the domain name is not already registered. You can do this at primary domain registrars like NetRegistry.

  4. search the ASIC database to see if the traditional company name is also available

  5. check with an online tool such as NameChk to see if the name is available on social media platforms such as Twitter, Meta, Youtube, etc.


Once all these checks are complete, register both ‘.com’, ‘.com.au’, ‘.au’, or ‘.net.au’ versions of the website. However, if you want to register a domain name with one of these extensions, you must register for an ABN. Also, you can apply for your domain name with your Australian Company Number (ACN) or trademark number).


If you do not have ABN, you can register for a .id.au domain; however, you cannot use this website for commercial purposes. Although it is advisable to register for an ABN, you will increase your business's legitimacy to your customers by including one on your tax invoices or website.


You can also take the benefit of claiming GST credits and make it easier to collaborate with other businesses.


Set up your business's infrastructure


Setting up business infrastructure is crucial for an online business. It ensures proper coordination of all resources, processes, and other tools to ensure manageable and profitable growth.


The two most important areas to focus on for your online business are technology and security, and content.


Technology and security


Online businesses rely on technology, and the role of technology in business will only increase. This fact makes it necessary to incorporate good technology into your online business. It will also help increase the efficiency of systems, products, and services.


Since you have an online business, you need to understand what technology is available to you and what technology can give you the best value. You need to streamline administrative processes, reduce operating costs, innovate, enter new markets, improve customer service and gain a competitive advantage through technology.


With data breaches and cybercrimes on the rise, strong security is essential for your online business. Therefore, you need to take strict measures to protect your data and the data of your customers. It would be best if you secure not only your data and your customers' data, but also a whole range of documents, from customer data to labour and financial information, to names and addresses on HR's records, and so on.


The most effective way to prevent the loss of sensitive data is to strengthen your cybersecurity. Threats can come in any form, including fraudulent emails, ransomware, etc. so you need to invest in cybersecurity that you can easily manage, or outsource your security requirements.


First, create a data breach response plan for your online business. This will protect your online business from unexpected data breaches. Second, you should regularly update your systems to prevent them from being hacked. Third, you can go a step further by investing in cybersecurity insurance.


If you want to learn more about the legal implications of cyber security breaches, you can read our article about business email compromise.


You can also read further about cyber security risks in eCommerce businesses and actionable steps to protect your eCommerce business from cyber threats.


Content


One of the first marketing tasks can be creating content for your online business.

This can help you attract customers and generate more sales. Also, by writing helpful content, you can easily attract and keep more audience to your website and social media sites.




But how do you write engaging content?

  • make the content about your customer

  • write the way you speak to add your personality to the writing

  • describe the experience or change you are offering

  • do not assume your customers know everything

  • teach your customers something

When writing content for your online business, you need to make sure that the content is fair and truthful and not misleading and deceptive.


You need to make sure that any statements or content on your website or social media that represents your products or services are truthful, accurate, and can be substantiated.


Misleading and deceptive content representing your online business may be subject to fines, damage to your business’s reputation, and other legal issues. And it does not matter whether a false or misleading statement was made intentionally or not. You can talk to an eCommerce lawyer for legal advice about eCommerce business and marketing material.


Your obligations as a seller


Make sure the goods and services you sell comply with the Australian Consumer Law


Every business person needs to familiarise themselves with the Australian Consumer Law. It is important to know the rights of consumers when selling goods and services because your online business must comply with automatic consumer guarantees.



Under the Australian Consumer Law, businesses selling goods must ensure that the goods are:

  1. safe and durable, have no defects, and be of acceptable quality

  2. are fit for any purpose that the consumer has tol the business (either expressly or impliedly) before purchase, or for the purpose for which the business has agreed they are fit

  3. have been accurately described

  4. conform to a sample or demonstration model

  5. meet all express warranties

  6. have a clear title unless you advise the consumer otherwise before the sale

  7. are in undisturbed possession so that no one has the right to take the goods away from the consumer or prevent the consumer from using them

  8. are free of hidden collateral or charges

  9. have spare parts and repair facilities for a reasonable period unless the consumer is otherwise advised.


Businesses providing services guarantee that these services:


  1. are rendered with due care and skill

  2. suitable for a specific purpose (express or implied)

  3. will be provided within a reasonable time (if no time limit is specified)


Suppose a product or service purchased by the customer does not meet the consumer guarantee. In that case, the customer has the right to request a repair, replacement, or refund under the Australian Consumer Law.


There is also mandatory wording that needs to accompany a warranty against defects. You can talk to our eCommerce lawyer for more information, including a free consultation.


How to deal with customer disputes


Every businessperson deals with an angry customer at some point. For example, a customer complains to you about a product they have purchased and demands redress.


In that case, your business has a legal obligation under the Australian Consumer Law to provide the appropriate redress.


If you fail to comply, the consumer may:


  1. report the problem to the ACCC or their local consumer protection agency; or

  2. have the matter heard in the local small claims court or Magistrates court.

The decision of the Tribunal or Court is legally binding.


Instead of not complying with the law, handle the situation to make the customer think you are running a compassionate and customer-focused online business. Moreover, you can even encourage the customer to act as a passionate advocate for your brand.


If a customer dispute is becoming confrontational, it is important to engage with an eCommerce lawyer early on.


You can follow these customer-focused tips to turn dissatisfied customers into active advertisers for your business:


  1. listen attentively to what the customer says and let them finish

  2. ask questions in a caring and concerned manner

  3. put yourself in the customer's shoes.

  4. apologise without placing blame

  5. ask the customer, "What would be an acceptable solution for you?"

  6. solve the problem, or maybe find someone who can solve it - and quickly!


Comply with marketing and advertising laws


Almost all Australian businesses use advertising to promote their goods and services. You too will advertise and market your online business.


Advertising and selling occur extensively in the online environment, such as through email, social media, apps, online shopping sites, price comparison sites, review platforms, and search engines. Nevertheless, online businesses have the same rights and obligations as those traditional operating businesses. If you need legal advice to review your marketing material, get in touch with an eCommerce law firm.


The Australian Consumer Law affects every business in Australia - whether brick-and-mortar or online. It aims to protect consumers, ensure fair trade in Australia, and make sure businesses do not act unconscionably towards consumers. That's why you need to know how consumer law affects your eCommerce business.


You must follow strict guidelines when advertising and marketing your products and services to customers. This is so that your customers are not misled in any way.


Unfortunately, misleading and deceptive advertising has become an ethical problem in the business world today. It is unethical and distorts competition and, of course, consumer choice.


The Australian Consumer Law requires you to ensure that your advertising and marketing is fair and truthful and not misleading and deceptive.


Add website terms and conditions


The website of your online business must have terms and conditions. This is because they act as a contract between you and your customers. Therefore, customers ought to agree to your terms and conditions if they wish to browse, make purchases or use any related services on your website.


You can ask an eCommerce lawyer to prepare website terms and conditions for you. By setting the code of conduct for your website and the way visitors interact with it, your T&Cs provide you with legal certainty in case of any disputes that might arise.


Every website and online business is different. That is why your website terms must be tailored to your business and website.


Here are some of the most common items typically included in terms and conditions for an e-commerce website:


Privacy policy


A privacy policy is a short legal notice stating that you will keep the visitor's personal information secure and not misuse it. Your website should display a privacy policy so that how you use personal information is transparent.


Your privacy policy needs to be professional, easy-to-understand, and customer friendly. This will help you stand out from the crowd and strengthen your online business's brand.

Australian legislation requires you to inform your customers and all visitors to your website about your privacy policy:



  • what personal information do you collect;

  • how you intend to use that information; and

  • how you will store that information and keep it secure.


Remember that you must only collect the necessary information for you to conduct your business.


Think from the perspective of a website visitor. Unless you collect their email address or other data where they have consented to receive marketing messages or someone could reasonably expect this, you must not send them unsolicited messages ("spam").


You can read more about how to ensure your email marketing is compliant here.


You must also ensure you do not sell their email address to third parties. Visitors to your online business should know that you will keep all the information they give you private, protected, and secure.


Remember, it isn't enough to simply post a well-written privacy policy on your website: Be prepared to adhere to it and respect your customers' privacy. If you "spam" your customers, for example, you could cause damage to your business. Moreover, it can ruin your online reputation, which is difficult to repair.


You can read more about the requirements for a privacy policy here.


Refund policy


Under the Australian Consumer Law, customers are generally entitled to refunds in certain circumstances. Online businesses are required to clearly display their refund policy on their website.


Your refund policy should help users understand how the refund process works and what they can and cannot do with payments made. You do not have to issue a refund if a customer simply changes their mind about the product.


The customer can only request a refund, repair, or replacement:


  1. at their choice, if the defect is ‘major’; or

  2. at your business’s choice, if the defect is ‘minor’.


Therefore, you need to know what a ‘major problem’ is so that you can respond appropriately when a customer comes to you with a problem.


A product has a major problem if:


  1. it is not safe to use;

  2. it deviates significantly from its description and/or a sample or demonstration model;

  3. it does not work as you promised or as the customer requested, and it cannot be repaired easily or on time; or

  4. there is a problem with the product that would have prevented the customer from purchasing it had they known about it.


If the problem cannot be fixed, the consumer has the option to:


  • cancel the contract for the services and receive a full refund; or

  • demand compensation equal to the difference between the value of the services provided and the price paid.


However, if you have informed the customer about the defect before the purchase, they cannot demand redress for this defect.


If this all sounds a bit complicated, contact an eCommerce lawyer today for tailored legal advice.


Website terms of use


Website terms of use are an agreement that a user must agree to and abide by to use the website. Website terms of use are considered legally binding and subject to change, which should be noted in the terms. They contain terms of use for user activities, accounts, products, technologies, etc.


If you need website terms of use prepared, contact an eCommerce lawyer. Website terms of use can help you better protect yourself if something goes wrong. Your website's terms of use help to protect you from various lawsuits. Website terms and conditions can mitigate liability for your online business.


In the same way, you should update your website content regularly, you should also regularly update your terms of service. While there is no specific period for reviewing your terms of use, you should do so every few months. In addition, you should conduct regular reviews to ensure that your terms of use are still protecting you as you originally intended.


Delivery terms and conditions


Delivery terms specify how the company delivers the goods to the customer. Unfortunately, in eCommerce, delivery conditions carry the potential for error and a bad customer experience.


For example, delivery could be delayed, damaged in transit - or not arrive at all. That's why it's important to outline your shipping and delivery terms, where you can advise how much time it takes to fulfil orders, how costs are calculated, whether additional fees apply, and what your responsibilities are if third parties are involved.


Many eCommerce businesses may not require comprehensive delivery terms. However, it is advisable to have detailed delivery terms and conditions, including how the expected delivery date is calculated, between what hours delivery is made, and what additional charges may apply.


How can Prosper Law help?


Prosper Law is Australia's online law firm with experience in providing legal services to businesses across Australia. Our experience in handling commercial legal matters is second to none.


Contact our team today if you are an entrepreneur starting or operating an online business and need legal advice from an eCommerce attorney on starting an online business in Australia.


Farrah Motley | Legal Principal

PROSPER LAW - A Commercial Law Firm for Businesses

M: 0422 721 121

E: farrah@prosperlaw.com.au

W: www.prosperlaw.com.au

A: Suite No. 99, Level 54, 111 Eagle Street, Brisbane, Queensland Australia 4000


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