Etsy is the premiere online platform for buying, selling, and sharing handmade art, crafts, and more with the rest of the world. For some, an Etsy shop is a viable means of making a living and operates as an online small business. However, as an Etsy shop owner, it is important to understand some of the legal considerations of operating a store online. Even if you consider it a side hustle or part time hobby you do for fun, there are legal aspects that can significantly affect you and your business.
As an Etsy shop owner, there are certain legal issues you must consider when operating your shop. Read more to learn about the most important legal aspects of Etsy shop operation and how they might affect you.
Choosing a Legal Entity Structure
An Etsy shop is a business, even if you just consider it a side hobby. As a business, you need to choose a legal business entity structure. The legal structure you choose can have significant tax and liability implications for you and your business. Many Etsy shops choose to operate as sole proprietorships or general partnerships because the establishment of these structures is easiest; however, it also opens you up personally to more legal liability. Other Etsy shops choose to operate as either limited liability corporations (LLC) or general corporations. These options take a little longer to set up but shield the individual from personal liability if your shop was ever sued. A business law attorney can help review your options and advise you on the best legal structure for your business.
Intellectual Property Considerations
The core value of your Etsy shop lies in the intellectual property of your ideas and creations. As such, it is critical that you protect your intellectual property from others who may wish to pass your ideas off as their own. The three most common forms of intellectual property protection come in the form of copyrights, patents, and trademarks. As your Etsy shop grows, you may want to consider employing some of these protections to ensure that no one else tries to steal your ideas and sell them as your own or dilutes your brand by selling similar, but inferior products to your own. You should also run searches on existing intellectual property protections to ensure that you are not accidentally infringing on the existing rights of another Etsy shop owner with your own products or ideas. An experienced intellectual property attorney can help you with all of these issues.
Tax Issues
As an Etsy shop owner, you are obligated to pay certain taxes in your federal and state tax returns as well as charge certain taxes on your items. These taxes include income tax, sales tax, and value added taxes on the items sold in your shop. For example, you may be required to charge sales tax on each item sold and pay that forward in your state returns every year. Having a local attorney help you with your legal tax considerations will ensure that all taxes are collected and distributed properly according to where you live.
Call or Contact a Lawyer Now
To learn more about the legal considerations you should take into account for your Etsy shop, call or contact a Counsel for Creators attorney to learn more.
