Legal Aspect in E-Commerce


Businesses are fuel the Philippines economy. About 90% of the business in the Philippines is composed of micro, small and medium enterprises employing the majority of the Philippine labor force. Businesses play a major role in the helping the country in improving its economy through payment of correct taxes and providing employment opportunities. It is the responsibility of every Filipino to pay taxes and legalize the operations of an e-commerce business. Registering a business is the true mark of a responsible Filipino e-commerce entrepreneur.

While the previous topic stated that an e-commerce entrepreneur should mitigate risks through preselling, it is not an excuse not to legalize operations. While it is acceptable not to register in the customer development and market research using the entrepreneurial framework, legalization of a business is not to register or not but a matter of when. Official registration enables the e-commerce business founders to satisfy their duty as Filipino citizens. More importantly, the legalization of a business provides a legal entity for the e-commerce business that will result in better creditability and trust in the eyes of the customers. This module explores the forms of businesses and other legal aspects of operating an e-commerce business.

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Forms of Business

The Philippine Constitution states three structure options for new and starting e-commerce businesses. Sole Proprietorship, as the name suggest, is owned by a single person. Partnership, on the other hand, is owned by partners ranging from two to more. Lastly, Corporations are owned by five or more. There are differences and similarities among the structures. The unique characteristics of each structure are suited depending on the situation and objective of an e-commerce business.