What Legal Documents Does My Online Startup Need in the UK?

Online startup owners and entrepreneurs face many challenges when launching their websites. An online business is only usually successful when achieving high user volumes and good attach rates. Alongside the issue of getting customers to access the site and spend money, there is also the challenge of putting relevant legal documentation in place. This article will detail key legal documents, so your online startup business can operate lawfully without excessive legal risk.

What is an Online Startup Business?

An online startup business is a new company existing online. Aside from physical warehouse space, most are small businesses with no physical retail premises. Instead, they do most business online (or by telephone or video call).  

Some of the biggest challenges facing online startup businesses include obtaining the initial investment and attracting users to the new website. This article will therefore focus on legal documentation concerning efforts to engage in digital marketing and website development.

Let us explore three useful legal documents that benefit a new online business.

Social Media Policy

Social media marketing is very popular amongst UK online startup businesses. The reasons for this are numerous and include the following:

1. it tends to be relatively cheap (or, in some cases, free); 
2. on certain platforms, your business can specifically target categories of people (such as individuals under 30 years old or those with children); and
3. it is quick and efficient (for instance, you could decide on a marketing campaign in the morning and have them hit the app by the afternoon).

However, social media marketing also comes with some pitfalls. Social media users on certain platforms, including Twitter, can react very negatively to even the slightest hint of controversy. In this way, a careless post on Twitter can spiral out of control much faster than one on an electronic billboard with limited reach.   

A social media policy aims to mitigate the risk of adverse online marketing outcomes. It does this by setting rules for your company’s social media use. Whilst social media policies differ depending on the type of business, most will address the following:

1. which topics are allowed within social media posts;
2. an effective complaint process (usually inviting the user to send your company a direct message through the relevant app);
3. the approval procedure for a social media posting; and
4. a process for the deletion of social media content.

Influencer Agreement

The use of influencers is a slightly different form of online marketing, but one which is currently booming. Essentially, your business outsources the social media posts to an individual with a sizeable social media following.

For example, if your business produces a new coffee machine, you might collaborate with a coffee connoisseur with 10 million followers on YouTube. Whilst the fees for influencer social media marketing tend to increase with their follower numbers, it is usually good value when their followers comprise your target audience.

An influencer agreement lets you commit key terms to paper, including some of the following:

1. whether the influencer receives a fixed fee per post or a variable amount based on the number of views or likes; 
2. whether the influencer receives commission payments for each sale made through an affiliate website link;
3. if your business requires the influencer to provide exclusivity to your brand (for example, by refraining from social media posts concerning rival products for a set period); and
4. whether the influencer can only use your company’s intellectual property for social media marketing purposes.

Choosing influencers from different territories can also allow your product to hit new markets, therefore hitting a wide range of potential customers.

Website Terms and Conditions

In the same way you set rules of conduct for your staff, your business should impose restrictions for site users. You can do so through website terms and conditions.

You can suspend or ban any site user who breaches these terms and conditions. Naturally, you should reserve this measure for severe acts, as the primary purpose of running an online startup business is to get users on the site rather than ban them.

Most terms and conditions documents will specify the following:

1. that content on the website may constitute intellectual property or be subject to copyright, so users cannot copy it without permission;
2. that any abusive comments or behaviour will likely result in a ban (for example, including racist messaging within emails with staff or posting explicit content within public comment sections);
3. that any attempt to hack into protected areas of the website or use the site in unauthorised ways will result in a ban and possible notification to relevant authorities; 
4. a disclaimer making clear that visitors use the website at their own risk and the company accepts no liability for damage caused by the use of the website; and
5. confirmation that continued use of the website after reviewing the terms and conditions will constitute acceptance of those terms.

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Key Takeaways

It is vital to ensure your online startup business gets off on the right foot and complies with UK law.  Implementing documents like a social media policy, influencer agreement, and website terms and conditions can help your startup avoid legal issues regarding marketing and website optimisation.  Given the importance of legal compliance, many UK businesses seek legal advice before launch.

If you need help putting relevant legal documentation in place for an online startup business, our experienced ecommerce and online business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page. 

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