We have all engaged in discussions concerning the similarities, and the differences, between our Miva Merchant-based eCommerce stores and the traditional bricks and mortar stores.  What you may not have considered is that your store's business organization is governed by exactly the same laws as the traditional store down the street.  The fact that you may be able to launch a site from your home or small office does not excuse you from obtaining the same licenses and complying with the same laws as the store at the nearby mall.

The first legal step in establishing any business is deciding what sort of business entity you want to use. The most common of these are the sole proprietorship, the partnership, the corporation, and the limited liability company.  There are numerous factors to consider in order to determine which type of business entity best suits your needs, both now and as your company grows.  What's best for the next guy is not necessarily best for you.  Depending on the type of entity you choose, you'll encounter different reactions when you attempt to raise money, sign leases and contracts, hire employees, etc.   You will find that by adopting certain forms of business organization you can limit your personal liability to others when they have a dispute with your company.  And, of course, you will find that your form of business organization directly determines both how you pay taxes and how much you will pay.  At  legalities.com, we have some books that may help you make this decision. The Small Business Start Up Kit provides an excellent discussion of the variables you should consider in determining how to organize your business.

Once the choice is made, you'll have numerous other legal considerations.  More than likely, you'll need a business license" from your local City Hall.  These licenses generally cost $25 to $100 per year for businesses with only 2-3 employees.  You probably will also need to file a Fictitious Business Name Statement at your local county recorder's office.   You'll need to register to collect sales tax.  If you have one or more employees, you'll have to obtain an Employer's Identification Number (EIN) from the IRS and purchase a Worker's Compensation Insurance Policy.  In fact, there are so many legal responsibilities that they cannot be listed in this article.  You will find a very helpful review of these steps in the Legal Guide for Starting and Running a Small Business.  A companion book, Legal Forms for Starting and Running a Small Business, provides an extremely helpful resource for small business owners who prefer self-help to hiring lawyers.

You'll also have to learn something about Intellectual Property.  Trademarks and Copyrights are issues which have enormous applicability in eCommerce.  You don't want others to rip off your trademarks and service marks.  But perhaps even more important for your financial survival is being assured that you are not, even innocently, misusing someone else's Intellectual Property.  For a good overview of Intellectual Property law, see Patent, Copyright and Trademark.  If you re interested in filing an application for a new trademark, How to Register Your own Trademark, can help.  Once your trademark is in place, you'll need to be certain not to take any actions which might, even inadvertently, result in your loss of the mark.  For a good review of trademark maintenance, Trademark: Legal Care for Your Business & Product Name provides an excellent overview of trademark care.

Many members of the Miva community are not selling products, but are rather selling their consulting services, often to Miva-based merchants.  These individuals typically operate as Independent Contractors.  Nothing is more important to an IC than the IC Agreement.   A handshake may be fine-until there is a dispute.  A client may unreasonably withhold payment, claiming that the services performed did not fulfill the scope of the services promised.  Fortunately, these issues are nothing new, and contracts exist which can be tailored to fit.  Consultant and Independent Contractor Agreements provides many instructive examples of agreement forms.

Legal issues of potential interest to the Miva Merchant community are plentiful.  In future columns, I will attempt to answer your specific questions.  Please email me with your questions.  I only ask that your questions be of general applicability and interest, and that my answers be understood to be directed at the Miva Merchant community at large and not specific legal advice.