Running an online business in the UK means navigating a complex legal landscape from day one. Whether you’re launching a subscription-based skincare brand from your kitchen, scaling a SaaS platform built with a remote team, or managing an e-commerce marketplace out of a converted warehouse, getting the legal foundations right is essential.
You’ll need to consider everything from your website’s compliance with e-commerce rules, to your contracts, cookie policies and how you process personal data. It’s not just about ticking boxes; the right legal documents and policies will help you gain customer trust, manage risk and avoid costly disputes later on. Working with our experienced commercial law solicitors will ensure you stay on top of the ever-evolving online regulations that apply specifically to your business model, customer base, and sales process.
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Why does understanding the legal rules for online trading matter?
Running a business online in the UK means you will be subject to a large regulatory framework, comprising various and often complex legal rules. Compliance with these rules is not just a legal obligation but also vital for building trust and credibility with your customers.
When setting up your business initially, assuming you are trading as a company, you should ensure your business is correctly incorporated and registered with Companies House and the UK Data Protection Regulator if required.
On your website, there is a range of mandatory information you will need to display. For instance, your name, email address, address, company registration and VAT number, where applicable.
You may also need to implement various documentation, including customer-facing online contracts and policies, such as sales terms and a privacy policy.
Failure to comply with your legal obligations can lead to costly legal disputes, damage to your reputation, and in the worst-case scenario, fines and even criminal prosecution.
We explore some of the key legal rules common to most online businesses below.
How should your business navigate distance selling rules?
Distance selling, which covers transactions conducted remotely without face-to-face interaction, presents various legal challenges and obligations for businesses.
Distance selling refers to transactions where a business sells goods or services without face-to-face contact, using online platforms, phone, or email. The entire interaction, including the conclusion of the contract, is conducted via distance communication. This includes sales conducted through websites and over the phone.
Key legal rules to follow include the following:
Consumer Rights Act 2015
The Consumer Rights Act 2015 outlines various rights and remedies available to consumers when purchasing goods or services online. For instance, it aims to ensure that products meet specific standards of quality, are fit for purpose, and accurately match their descriptions. For example, consumers are entitled to a refund if goods are faulty.
Consumer Contracts Regulations 2013
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 govern contracts concluded at a distance, including online transactions. They require businesses to provide consumers with clear and comprehensive pre-contract information, including details about the goods or services, pricing, delivery arrangements, and cancellation rights. Consumers also have a statutory cooling-off period of 14 days during which they can cancel their order without penalty unless exceptions apply.
Electronic Commerce Regulations 2002
The Electronic Commerce Regulations 2002 apply to businesses engaged in electronic commerce, imposing requirements for specific information to be provided to consumers before and after the conclusion of a contract. Businesses must provide clear and accessible information about their identity, contact details, pricing, and terms and conditions.
Effective distance selling requires strict compliance with these legal requirements and will help your business ensure transparency, fairness, and consumer protection throughout the transaction process.
Some distance selling rules under the Electronic Commerce Regulations 2002 also apply to business-to-business selling via email, text or online. For instance, the requirement to display your business information when selling online.
However, legal advice on the relevant rules for your business is always key, as there are certain exceptions to the general rules which apply to distance sales.
Legal considerations and key documents for online businesses
In addition to distance selling regulations, online businesses must navigate a range of other legal obligations.
Some of the key legal issues and considerations for an online business include the following:
Do you have website terms and conditions in place?
Your website must have clear terms and conditions to protect your website content and intellectual property. These terms often include provisions such as copyright notices, trademark protection terms, disclaimers, terms regarding the use of user-generated content, and prohibitions on the use of the website. These terms are vital to protect your business from potential liability from its website visitors and users.
Have you considered a privacy policy and data protection rules?
With increasing concerns about customer data privacy, safeguarding customer data is crucial. Compliance with the UK GDPR and Data Protection Act 2018 is key for every online business.
Assuming your business acts as a data controller, a comprehensive privacy policy is essential for complying with data protection laws. Businesses must provide a detailed privacy policy that explains what personal data is collected, its uses, with whom it is shared, retention periods, and the data subject's rights.
Alongside publishing a compliant privacy policy, your website should implement strong security measures to protect customer data and avoid harmful personal data breaches.
Have you published robust e-commerce sales terms?
Clear and comprehensive e-commerce terms are crucial when selling online. These terms should cover key provisions related to the sale of your products or services, including payment terms, delivery times, return policies, terms limiting your liability, and any warranties. These terms require careful thought and consideration, particularly for consumer customers, as consumer protection law issues can significantly influence how terms are applied and enforced. You must also ensure that any online e-commerce sales terms are legally binding, especially given the legal requirements for online business that may affect your contract structure and compliance obligations.
Are you aware of electronic marketing and advertising law rules?
The Privacy and Electronic Communications Regulations (PECR) govern electronic marketing activities, including email marketing and the use of cookies. Any website marketing opt-in forms must comply with the PECR requirements.
There are also stringent laws which apply to the advertising of goods or services online. Legal rules prohibit unfair practices such as misleading actions, and there are also rules about advertising and marketing claims on a company’s website.
Do you need a cookie policy?
If your website uses cookies, you should publish a PECR-compliant cookie policy explaining their use. This includes detailing what cookies are, their use, how long they last, and how users can manage or disable them.
Consent will be needed for your website’s use of any cookies other than non-essential ones. Consent is often collected through a PECR-compliant cookie banner. Businesses have been subject to heavy regulatory scrutiny and enforcement action for getting this wrong.
You can find more information on other typical legal documents for an online business here.
How can we help you stay compliant online
Running an online business in the UK entails a range of legal obligations that must be understood and carefully implemented. From distance selling rules and data protection to advertising standards and contract terms, these requirements shape how your business operates and how your relationships with customers are structured.
Crucially, you’ll need to assess whether you’re selling to businesses (B2B) or consumers (B2C), as this distinction influences which documents you need, what protections apply, and how your legal risks should be managed. A consumer-facing subscription box service, for example, will require very different terms from a B2B SaaS provider. Similarly, how you collect and use personal data, deploy cookies, or present cancellation rights can trigger different obligations depending on your audience.
Understanding these distinctions and how they affect your contracts, policies and compliance responsibilities can be complex. Working with experienced commercial law solicitors helps ensure that your online business not only meets its legal obligations but is also structured to support long-term growth and avoid regulatory pitfalls. We can help you identify which laws apply to your business model, draft enforceable terms, and build the proper legal framework to support safe and sustainable digital trading.
