Legal obligations for online business

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You must meet legal obligations when conducting business online. These are designed to protect you and your customers.


If you save contact and personal information from your customers, you are required, under the Privacy Act 1988, to make your customers aware of what you are collecting. You must also clearly explain how you will use their information.

Intellectual property

You may encounter intellectual property (IP) issues when running your online business, such as potential copyright and trademark infringements.

IP India registers designs and trademarks and provides protection for intellectual property. When setting up your online business, it may be useful to help you work out your IP rights and obligations.


Spam is electronic junk mail. It’s used to send bulk unsolicited promotional emails indiscriminately to a large volume of email accounts or mobile phone numbers. It can be a costly and inconvenient nuisance to your business.

Under the Spam Act 2003, it’s illegal to send unsolicited commercial electronic messages. To ensure your business keeps within the law, make sure you adhere to these 3 points:

  • consent – you must have consent to send messages to your contacts
  • identify – you must include clear and accurate information about your business, including who is sending the message and how they can be contacted
  • unsubscribe – you must include an ‘unsubscribe’ facility to allow recipients to opt out of receiving your messages.

Electronic transactions

There is no legal difference between electronic and other transactions (e.g. paying for something with cash). This means the same laws apply to the transactions made on your website as the ones you might make at the supermarket. Before you start trading online, make sure you are familiar with the laws outlined in the Fair Trading Act 1989.

The Electronic Transactions Act 1999 mean that electronic or digital signatures can take the place of a handwritten signature, contracts can be made electronically and you’re legally allowed and required to keep records of transactions and other information.

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