Online store and the law: legal requirements for business

To organize the operation of an online store, it is mandatory to comply with the requirements of current legislation. Particular attention should be paid to business registration (Sole Proprietorship or LLC), accounting support, development of a public offer agreement, installation and connection of ECR/pECR, selection of NACE codes and taxation system, maintenance of primary documents for goods, etc.

Let's understand how to open an online store from scratch and what documents are needed for this.

What is an online store?

An online store is a platform through which an entrepreneur sells goods or provides services. A site user places an order online via an application or browser, selects a payment method, and a delivery option.

The entire interaction process between seller and buyer occurs remotely, without personal meetings and without handwritten signatures on sales documents.

Remote trading saves time, offers a wider range of goods/services for review, and has no geographical limitations.

Which laws regulate the operation of an online store?

The operation of online stores in Ukraine is regulated by various laws and documents, for example:

"On Electronic Commerce": defines the procedure and rules for conducting business activities online;

Civil Code of Ukraine: establishes types of contracts that protect the interests and rights of sellers and consumers in electronic commerce;

" On Consumer Rights Protection": defines the rights of buyers who order goods/services in an online store;

Tax Code of Ukraine: establishes the procedure for taxing profits from website activities;

" On Electronic Document Flow": defines the procedure and rules for drafting, using, and exchanging electronic documents;

Resolution No. 833: helps to understand how to conduct trade activities and serve the needs, requests, and orders of consumers;

Law "On ECR": establishes the procedure for fiscalization of settlement operations.

Who can open an online store?

An online store can be opened by a Sole Proprietorship under taxation groups 2–4 and a legal entity. Exception — Sole Proprietorship under group 1, by law, can trade or provide services only in the market.

The choice between Sole Proprietorship or, for example, LLC depends on the direction of business activity. Therefore, first, you need to determine the NACE code (type of economic activity) as the main one, and then contact the tax office for registration and selection of the general or simplified taxation system.

Until the entrepreneur is registered with the State Tax Service and receives a certificate from the state registrar, it is not allowed to sell goods or provide paid services online. This is considered a violation of the law and may result in a fine of 17,000 UAH.

What information should be posted on the website for the consumer?

The Law "On Electronic Commerce" stipulates what exactly needs to be posted in open access on the website:

• company name,

• location and legal registration address,

• availability of licenses, certificates, permits,

• contact phone number, email address,

• payment terms, delivery, its cost,

• rules for returning goods and money for them.

Main NACE code for online stores

Recall that Sole Proprietorships under the single tax cannot sell art and antiques, organize auctions with such items, and provide postal services. Exception — courier activity.

To open an online store, you can choose the following NACE codes for Sole Proprietorship:

Public offer agreement on the website

The relationship between the seller and the buyer is regulated by an electronic contract, which the entrepreneur drafts and posts on the website. The document is publicly accessible to everyone.

The terms of the electronic agreement are the same and mandatory for all consumers. It includes the following concepts:

• offer — this is the company's proposal to conclude a contract;

• acceptance of the offer — this is the client's agreement with all the conditions specified in the document, full and unconditional acceptance of the store's offer.

If such a document is absent on the website, this means a violation of the law "On Consumer Rights Protection".

What documents are needed to open an online store?

You can open an online store without documents. However, to sell goods or provide services through the website, you must have a certificate of registration as a Sole Proprietorship or a legal entity.

To legally conduct online trade, the business owner needs to:

• register as a sole proprietor or legal entity in the Unified State Register;

• register with the tax authority at the place of registration;

• open a bank account;

• maintain primary documentation and pay taxes on time.

Registering a Sole Proprietorship through Diia and the electronic taxpayer's cabinet will help speed up the process of obtaining the necessary permits.

ECR for online stores

An online store must install an ECR/pECR under the following conditions:

• receives cash from customers;

• receives cash at the post office after sending the goods;

• uses acquiring (non-cash payment for goods from the client's bank card);

• accepts non-cash payment using a QR code;

• receives post-payment to the settlement account;

• sends goods to the customer via a forwarding company, for example, Nova Poshta.

In all these cases, the seller is obliged to generate a fiscal ECR receipt and provide it to the consumer.

Taxes for online stores

For simplified Sole Proprietorships, the object of taxation is the entire income received from online trading.

For entrepreneurs on the general system, the object of taxation is the income received from trading. However, expenses for ensuring the operation of the online store must be deducted from this amount.

If payment systems are linked to the site, such as LiqPay, Easypay, or others, the funds passing through them must also be accounted for and taxed.

Consumer rights protection and privacy policy

The activity of an online store falls under the law "On Consumer Rights Protection".

The seller confirms the quality of the goods with appropriate certificates and provides documents upon the client's request.

The buyer has the right to return an item within 14 days from the moment of receiving such goods. The payment receipt is proof of purchase and actual receipt of the item.

The law "On Personal Data Protection" regulates the procedure and rules for collecting personal data of the consumer, their storage, and non-disclosure to other persons. Therefore, the site must necessarily post a document that defines the privacy policy based on the law.

Liability and fines

If the organization of the online store's activity does not comply with the norms of current laws, the following consequences may occur:

• administrative liability: from 17,000 to 34,000 UAH — fine for trading without registration; a fine of from 3,400 to 10,200 UAH is provided for entrepreneurial activity without a license; fine for working without an ECR — from 100 to 200% of the value of the sold products;

• criminal liability: for fraud through deception, a fine of up to 50 non-taxable minimum incomes of citizens or corrective labor for up to two years, or restriction of freedom for up to three years is provided (Art. 190 of the Criminal Code of Ukraine).

For an online business to develop, remain transparent, honest, and focused on consumer interests, it is necessary to comply with current laws and monitor their relevant changes.