Summary
- Startups must have key legal documents in place from the outset, including terms and conditions, privacy policies, and shareholder agreements.
- Failing to establish proper legal foundations early can expose a business to significant contractual, regulatory, and intellectual property risks.
- Legal documents should be tailored to the specific nature of the business rather than relying on generic templates.
- This article is a plain-English guide to essential legal documents for startup founders operating in Australia, produced by LegalVision, a commercial law firm.
- LegalVision specialises in advising clients on the legal documentation requirements for startups and early-stage businesses.
Tips for Businesses
Identify which legal documents apply to your business model before trading. Prioritise a privacy policy if collecting personal data, and ensure contracts with co-founders or shareholders are signed early. Review documents as your business grows, since a one-size-fits-all approach rarely holds up under scrutiny.
Launching an online startup means building your business in public, where legal missteps are visible and costly. The right legal documents protect your brand, set clear expectations for users, and keep your marketing activity compliant from day one. 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:
- it tends to be relatively cheap (or, in some cases, free);
- on certain platforms, your business can specifically target categories of people (such as individuals under 30 years old or those with children); and
- 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:
- which topics are allowed within social media posts;
- an effective complaint process (usually inviting the user to send your company a direct message through the relevant app);
- the approval procedure for a social media posting; and
- a process for the deletion of social media content.
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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:
- whether the influencer receives a fixed fee per post or a variable amount based on the number of views or likes;
- whether the influencer receives commission payments for each sale made through an affiliate website link;
- 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
- 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:
- that content on the website may constitute intellectual property or be subject to copyright, so users cannot copy it without permission;
- 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);
- 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;
- 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
- confirmation that continued use of the website after reviewing the terms and conditions will constitute acceptance of those terms.
Starting an online business in the UK is complex. This free guide helps you navigate the legal steps with confidence.
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.
LegalVision provides ongoing legal support for businesses through our fixed-fee legal membership. Our experienced e-commerce lawyers help businesses manage contracts, employment law, disputes, intellectual property, and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision’s legal membership, call 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Can lawyers assist with business planning rather than legal documents alone?
Yes, expert lawyers can support your business through funding and business ideas, whether you are a sole trader or a limited company.
What legal documents should my startup business consider drafting?
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.
What happens if a user breaches your website terms and conditions?
You can suspend or ban the user from your site.
Can a social media policy apply to staff personal accounts?
Yes. A social media policy can set rules covering both business and employee personal social media use relating to the company.
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