Have you ever wanted to run a business from the comfort of your own home? An online or e-commerce business is a great way to do so. Online stores allow you to sell your goods and services online instead of in a physical shop, at any time and location. An online business also means you can work anywhere you want. However, even though your business may be virtual, you must comply with some New Zealand legal obligations. This article will outline when online stores may need a business license and other non-licensed legal requirements you may want to consider.
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Business Licenses
You do not usually need a general business license in New Zealand. Additionally, some industries will require you to get a license to operate a business in specific industries. Licensing is essential if you plan to sell alcohol or food. These may vary due to your local council, so you should check your obligations based on where you live. You will need a license if your online store is:
- a private investigation service;
- a pawnbroker;
- selling alcohol;
- a brothel.
New Zealand Business Number
Though New Zealand does not have general business licenses, you will need to get a New Zealand Business Number (NZBN) if you are supplying goods and services online or in person. An NZBN is a unique number that any business in New Zealand can get. This number will store all your essential business information in one place, allowing people to find out information about your business efficiently. In addition, this makes it easier for you to liaise with government agencies or other businesses.
Continue reading this article below the formWhat Other Laws Will You Need to Abide By?
Even though you do not need a business license to run an online store in New Zealand, all online sellers still need to comply with New Zealand law.
Tax Law
You will have the same tax obligations if you regularly sell goods online as you would in a physical store. Although you do not need to pay tax if you make one-off sales, you will be ‘in trade’ for tax purposes if you are frequently or regularly selling goods. Hence, you will need to pay tax.
Additionally, you will need to inform Inland Revenue that you regularly earn money from an online business and pay tax on your earnings. You will also need to register for GST (general sales tax) if you have online sales of more than $60,000.
Consumer Law
If you sell goods or services regularly, you must comply with consumer law in New Zealand. Most consumer law comes from the Consumer Guarantees Act and the Fair Trading Act. These obligations mean your goods will need to be:
- of acceptable quality;
- match their online description; and
- arrive in good condition.
You will need to be honest about the goods you sell, especially for online businesses, as your customers will rely on the descriptions you give them. If a product is faulty, you will need to replace it. Moreover, you must comply with different consumer laws if you sell vehicles or online financial services.
Privacy Law
You will also need to ensure that you keep your customer’s information private and confidential. For example, you should only collect the data you need and ensure that any addresses, credit card details, telephone numbers, or other personal information are kept private. Otherwise, your customers may be able to make a complaint under the Privacy Act.
Key Takeaways
An online store could be a fantastic venture if you want to run a dynamic business from home. Unless you engage in certain types of business, you do not need an official ‘business license’ to run an online business in New Zealand. However, registering for New Zealand Business Number (NZBN) can be very beneficial for enabling people to access information about your business. Even though all sales may be taking place in the virtual world, you still need to comply with tax, consumer and privacy laws in New Zealand.
If you need help understanding your legal obligations for your online business, our experienced 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 0800 005 570 or visit our membership page.
Frequently Asked Questions
In short, no. However, you will need to apply for a license to operate specific types of businesses, including those that sell food or alcohol. Licensing requirements vary from council to council, so look at what you may need to do depending on where you live.
Yes, your online business will still be governed by the same tax, privacy and consumer laws as a physical business.
A New Zealand Business Number (NZBN) is a unique number that any business acting ‘in trade’ in New Zealand can get. This number will store all your essential business information in one place, which allows people to find out information about your business efficiently. In addition, an NZBN makes it easier for you to liaise with other companies or the government if you are working with others to try to grow your business.
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