Alex is Sprintlaw's co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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Starting an online store can be one of the most exciting (and scalable) ways to build a business in Australia. You can test products quickly, reach customers nationwide, and grow without the overheads of a traditional storefront.
But when you’re starting an online store, it’s easy to focus on the fun parts - the brand, the products, the website - and leave “the legal bits” for later. The problem is that online businesses often interact with customers, payments, marketing, and personal data from day one. That means the legal risks can start early too.
To help you launch with confidence, we’ve set out a practical legal checklist designed for Australian small businesses and startups. Think of it as your “minimum viable legal setup” - clear, actionable and focused on the areas that most commonly cause issues for online stores.
Why The Legal Setup Matters When You’re Starting An Online Store
When you’re selling online, your customers can’t physically inspect your products, your policies aren’t handed over at a counter, and your communications are often automated. That can create misunderstandings quickly - which is why your legal framework matters.
A good legal setup helps you:
- Reduce disputes by setting expectations about payment, delivery, returns and warranties
- Comply with Australian rules around consumer rights, pricing, marketing and privacy
- Protect your brand so you can grow without copycats or confusion in the market
- Operate more smoothly with suppliers, contractors and partners on clear terms
Just as importantly, getting the foundations right early can save you a lot of time (and cost) later, especially if you plan to scale, raise funds, or sell the business.
Step-By-Step: The Core Legal Setup Before You Launch
If you’re starting an online store, these are the key “first moves” we generally recommend tackling before you start driving traffic and taking orders.
1. Choose The Right Business Structure
Your business structure affects your tax, liability, ownership, and how easy it is to bring in a co-founder or investor later. Common options include:
- Sole trader: simpler to start, but you’re generally personally responsible for business debts and liabilities
- Partnership: can work for two or more people, but it’s critical to document roles, profit splits and exit arrangements
- Company: a separate legal entity, often used by startups and scalable online stores because it can limit personal liability and makes ownership (shares) easier to manage
If you’re starting with a co-founder, the structure decision and ownership planning should happen early. It’s much harder to “fix later” once money has started flowing and contributions become uneven.
Because your structure also affects tax and reporting, it’s a good idea to speak with an accountant about what setup makes sense for your circumstances (this article is general information and isn’t tax advice).
2. Register Your Business Details (ABN, Name, Company)
Most online stores will need an ABN. Depending on your structure and branding plans, you may also need to register a business name and/or set up a company.
If you’re incorporating, it can help to align your registrations with your plans for growth and brand protection. For example, you may want your company to own your key assets (like your domain name, social media handles, and trade marks).
Many founders also choose to adopt a Company Constitution early, especially if they’ll have multiple shareholders or are planning to raise capital.
3. Lock In Your Supply Chain And Product Compliance
“Product compliance” sounds technical, but in practice it means making sure what you’re selling is lawful, safe, and correctly described. The steps here depend heavily on what you sell (for example, cosmetics, food, children’s products, electronics and therapeutic goods can have additional rules).
Even for more straightforward products, you should still ensure:
- your product descriptions are accurate (including sizing, materials, compatibility, and limitations)
- you have reliable supplier documentation (so you can prove what you ordered and what was promised)
- you’re not importing or selling restricted goods
If your inventory relies on overseas suppliers, this is also the point where clear written supply terms become essential (quality control, lead times, defect handling, and who pays for returns).
4. Set Up Your Website With The Right “Legal Pages”
When you’re starting an online store, your website is usually your shopfront, sales assistant, and customer service desk all in one. That means your legal terms need to be easy to find and written for how your store actually operates.
For most online stores, that includes:
- terms and conditions of sale (often called online store terms)
- shipping and delivery policy
- returns and refunds policy (aligned with Australian Consumer Law)
- privacy policy (and often a cookie policy)
- website terms of use (rules for using your site)
A good starting point is having tailored e-commerce terms and conditions that match your fulfilment process, turnaround times, and customer support model.
Australian Consumer Law: Returns, Refunds, Warranties And Pricing
If you sell to Australian consumers, the Australian Consumer Law (ACL) will apply to your online store. This is true whether you’re running your store full-time, as a side hustle, through a marketplace platform, or on your own website.
ACL compliance is one of the biggest “must get right” areas when you’re starting an online store, because it affects your returns, refunds, marketing claims, and customer complaints process.
Returns And Refunds: Don’t Accidentally Overpromise (Or Undershoot)
One of the most common mistakes we see is businesses using generic returns policies that:
- promise refunds in situations where the business doesn’t want to offer them (for example, change of mind)
- try to exclude consumer guarantees (which generally can’t be excluded for consumer purchases)
- don’t match how the business actually fulfils orders (leading to conflict and chargebacks)
It’s completely fine to have a clear “change of mind” policy - but you need to make sure it’s consistent, easy to apply, and doesn’t misrepresent a customer’s rights under the ACL.
Warranties And Consumer Guarantees
In Australia, customers receive automatic “consumer guarantees” for many purchases. These guarantees relate to things like acceptable quality, matching description, and being fit for purpose.
Online stores often get caught out by over-simplified warranty messaging. For example, some businesses assume there is a standard warranty period for all products, when the reality depends on the product type and what a reasonable consumer would expect.
If warranties are a key part of your product positioning, it’s worth understanding how warranty messaging interacts with ACL rights (including how you describe “major” versus “minor” failures). If this is a common customer question for your product category, the way you communicate it matters. You can also see how this issue comes up in practice through topics like warranty expectations and how to avoid confusing statements.
Pricing And Advertising: Make Sure Your Storefront Claims Are Accurate
When you’re starting an online store, your pricing is usually displayed everywhere - product pages, cart, checkout, email marketing, social ads, and sometimes third-party listings. That makes pricing compliance especially important.
In general, you should check that:
- the displayed price is clear and not misleading
- any “was/now” discounts or promotions are genuine
- shipping costs and other fees are explained before checkout
- you’re not using tricky comparisons that could be seen as misleading or deceptive
If discounts and promotions are part of your growth strategy, it’s worth making sure you understand the rules around advertised price compliance.
Privacy And Data: What You Need If You Collect Customer Information
Most online stores collect personal information, even if it’s just:
- names, emails, phone numbers and delivery addresses
- order history
- customer support messages
- marketing preferences
Once you start collecting and storing customer information, privacy compliance becomes a real operational issue - not just a “legal page you publish and forget”.
Do You Need A Privacy Policy?
Many online businesses need a Privacy Policy, especially if you:
- collect personal information through your website
- use analytics tools and cookies
- build marketing lists (email/SMS)
- share data with third parties (like fulfilment partners, CRMs, payment providers, and ad platforms)
In Australia, privacy obligations often come from the Privacy Act 1988 (Cth) and the Australian Privacy Principles (APPs). Some small businesses may be covered by the “small business exemption” (often where annual turnover is $3 million or less), but there are important exceptions - for example, some entities that trade in personal information, provide certain health services, or otherwise fall within the Act can still be covered regardless of size.
Even where the Privacy Act doesn’t apply in the same way to every small business, it’s still best practice to be transparent about how you handle data. Customers also expect to see a clear Privacy Policy on an online store website.
Email And SMS Marketing: Set Up Your Process Properly
When you’re starting an online store, building an email list is often one of your first growth channels. Just make sure your signup forms, opt-ins, and campaigns are compliant.
For example, you’ll want to think about:
- how customers consent to receive marketing
- what you say at the point of collection (including links to your Privacy Policy)
- easy unsubscribe options
- how you segment and use customer data for promotions
In Australia, marketing emails and SMS are also regulated under the Spam Act 2003 (Cth), which generally requires consent, accurate sender identification, and a functional unsubscribe option (and it applies whether you send campaigns yourself or use an email/SMS platform).
If email campaigns are going to be a core part of your launch strategy, it’s worth ensuring your approach lines up with email marketing laws in Australia.
Protect Your Brand And Content (So Your Store Can Scale)
Brand is a major asset for any online store. The earlier you take brand protection seriously, the easier it is to expand confidently into new products, new platforms, and even wholesale or international sales.
Trade Marks: Protect The Name You’re Building
If you’re investing in a brand name, logo, or tagline, you should consider trade mark protection. This can help you stop others from using an identical or similar brand in your category.
Trade marks can be especially important if:
- you’re building a long-term brand (not just selling generic products)
- you’re spending money on ads and influencers
- you plan to expand into new product lines
- you want to increase business value for a future sale or investment
This is the kind of step that can be easy to delay when you’re starting an online store, but it’s often far cheaper to do early than to rebrand later.
Copyright And Product Photography
Online stores rely heavily on visuals - product photography, graphics, written descriptions, and video content.
As a rule of thumb:
- use images you own, have licensed, or have express permission to use
- ensure contracts with photographers and designers clearly deal with ownership and permitted use
- be careful with “inspo” content that could cross into copying
If your store uses contractors, having a written agreement that addresses IP ownership is a simple way to avoid future disputes.
What Legal Documents Do Online Stores Commonly Need?
When you’re starting an online store, legal documents aren’t just about “protecting yourself” in the worst-case scenario. They help your store run smoothly day-to-day by making responsibilities and expectations clear.
Here are some of the key documents we often see online stores needing.
- Online store terms: These set the rules for purchases - payment, fulfilment timeframes, returns, exchanges, limitations and how disputes are handled. Many businesses start with tailored e-commerce terms and conditions that reflect how they actually operate.
- Privacy Policy: This explains what personal information you collect, how you use it, who you share it with, and how customers can access or correct it. A clear Privacy Policy is a standard expectation for online customers.
- Supplier or manufacturing agreement: If you rely on suppliers (local or overseas), this helps manage quality, delivery standards, IP, exclusivity, defects, and who pays for what when something goes wrong.
- Contractor agreement: If you hire freelancers (design, marketing, development, VA support), a written agreement can set payment terms, deliverables, confidentiality and IP ownership.
- Shareholders Agreement: If you have a co-founder or multiple owners, a Shareholders Agreement can cover decision-making, what happens if someone wants to leave, and how new investors come in.
- Company Constitution: For companies, a Company Constitution can help set governance rules that suit your business (particularly where there are multiple shareholders or different share classes).
Not every online store will need every document on this list on day one. But most businesses will need a combination of them, and it’s worth prioritising the documents that affect customer experience and cashflow first (usually the online store terms and privacy).
Key Takeaways
- Starting an online store is fast and flexible, but the legal risks can also start immediately once you take orders, process payments, and collect customer data.
- Choose the right business structure early, especially if you have a co-founder, plan to raise money, or want to protect personal assets. Because structure choices can also affect tax and reporting, it’s a good idea to speak with an accountant about what setup makes sense for your circumstances.
- Australian Consumer Law affects how you handle refunds, returns, warranties and advertising, so your policies and product descriptions need to be accurate and compliant.
- Privacy and marketing compliance matters for most online stores because you’ll likely collect customer data and build email/SMS lists. Some small businesses may be exempt under the Privacy Act, but there are key exceptions, and email/SMS marketing must also comply with the Spam Act.
- Clear legal documents (online store terms, privacy policy, supplier/contractor agreements and founder documents) help reduce disputes and support growth.
If you’d like a consultation on starting an online store, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
