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Important Legal Asset For E-Commerce Startups

Trademark

Does your e-commerce business have unique words, phrases, symbols and designs that help distinguish it from competitors? If so, these are your trademarks.

A trademark emphasizes your distinct brand, and only you should have exclusive rights to the mark.

Filing for trademark registration provides you with the trademark’s rights and proves you are the rightful owner. This means nobody else but you can use this mark.

An unregistered trademark is unprotected, and risks being plagiarized by outside sources. The sooner you can conduct a name search and a file a trademark application, the better for your e-commerce business!

Basic business operation license(s)

Filing for a business license fulfils four core duties for companies. It identifies the company and tracks its activities for tax purposes. It also protects public health and ensures that the business has met its minimum requirements along with notifying citizens of activities that could impact them.

As mentioned above, business licenses allow companies to safely operate their business and remain in compliance with state laws. Generally speaking, the most common business license an e-commerce company needs is a basic operation license. This is a permit that lets you operate the e-commerce business in its respective city, county and state.

The type of license(s) your e-commerce business needs to file for may vary. This depends on the industry you’re in and the state in which you do business, so check in with your local Secretary of State to determine which licenses are applicable to your specific needs.

Employer identification number (EIN)

Think of an EIN as a less sensitive, more corporate version of a social security number (SSN). EIN stands for “employer identification number.” It is issued by the IRS to identify a business entity.

An e-commerce business may choose to use their SSN on important documents, or use an EIN instead to safeguard their SSN and identify their company.

Many entrepreneurs assume that it’s only necessary to file for an EIN when hiring employees. An EIN fulfils several other duties aside from hiring or planning to hire, employees.

Your e-commerce business will need an EIN if it decides to form an LLC or corporation, open a business bank account, establish a credit profile, and/or change its organization type.

Doing business as name (DBA)

Doing business as names (DBAs) go by other names. They may be referred to as trade names, assumed names and fictitious names. No matter what you call it, filing for a DBA allows your business to operate and receive payments under a name that differs from your personal, legal business name.

Registering for a DBA allows you to open up a business bank account and accept payments under an alternate business name. Some e-commerce businesses may take advantage of the former or the latter, depending on their needs. It should be noted, however, that filing for a DBA is not the same as filing for a trademark. Trademarks protect the name of the business, while DBAs are the official registration of your business name.

Annual report

Did you incorporate your e-commerce business as an LLC? You’ll need to file an annual report. This document allows you to update the state in which you do business with any changes or new information about your company.

Annual reports do more than alert the Secretary of State about any changes in your e-commerce business and its yearly activities. Filing on time helps to keep your state in compliance.

If you don’t file in time, your company could pay expensive penalty fees and even be subject to dissolution by the state. You may file on your own or work alongside a third party filing service that can take care of your annual report filing needs.

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