Cyber Law Report: E-commerce Legal Issues for XYZ Tech

This report addresses the complex legal issues of e-commerce for XYZ Technologies Inc., a software development firm operating online. The report delves into key areas including business formation, examining various structures like sole proprietorships, partnerships, and corporations, along with business models such as B2C and B2B. It also analyzes intellectual property protection, focusing on safeguarding company assets. The report further explores employment agreements, emphasizing the use of the internet for promoting employee diversification and also includes transitional law and discusses regulatory, compliance, and liability issues pertinent to e-commerce operations. The report uses at least 15 scholarly citations to provide a comprehensive overview of the legal landscape for the client. The report covers key areas of e-commerce law like intellectual property, employment agreements, and liability.

Running head: CYBER LAW
CYBER LAW
Name of the Student
Name of the University
Author’s Note

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Table of Contents
ABSTRACT....................................................................................................................................3
1. Business Formation, Business Model and Business Cycles....................................................4
Business Formation.....................................................................................................................4
Sole Proprietorship..................................................................................................................4
General partnership..................................................................................................................5
Limited partnerships................................................................................................................5
Corporations............................................................................................................................6
Limited Liability Company.....................................................................................................6
Business Model and Cycles.........................................................................................................6
Business to Consumer (B2C)...................................................................................................6
Business to Business (B2B).....................................................................................................7
Consumer to Business (C2B)...................................................................................................7
Consumer to Consumer (C2C)................................................................................................7
2. Intellectual Property: Asset Protection....................................................................................8
Safeguarding personal intellectual property................................................................................9
Violation of the intellectual property of someone else................................................................9
3. Employment Agreements......................................................................................................10
Fixed-term or the open-ended agreements................................................................................10
Trial Period................................................................................................................................11

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Notice Period.............................................................................................................................11
Strong communication skills.....................................................................................................12
Flexibility...................................................................................................................................12
Market awareness......................................................................................................................12
Data loving.................................................................................................................................12
The manager of e-commerce.....................................................................................................13
The business strategist...............................................................................................................13
Channel manager.......................................................................................................................13
Supply chain manager................................................................................................................14
4. Transitional Law....................................................................................................................14
5. The issues of regulatory, compliance and liability................................................................16
Contractual and liability information.........................................................................................16
Data privacy and protection.......................................................................................................16
Fraud management and electronic transaction security.............................................................17
Conclusion.....................................................................................................................................17
Reference.......................................................................................................................................19

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ABSTRACT
As commented by Monteiro, Swatman & Tavares, (2013) e-commerce is considered as
the selling or buying activity of the products over internet or through online services. Different
technologies are drawn by the Electronic commerce like the mobile commerce, management of
supply chain, internet marketing, electronic funds transfer, process of online transaction,
inventory management system, system of automated data collection and electronic data
interchange. The World Wide Web is typically used by the modern electronic commerce at least
for the life cycle of the transaction’s one part; however, other technologies like e-mails are also
used it. The typical transaction of e-commerce includes the purchasing of the online books and
music and to the lesser extent personalized or customized online services of liquor store
inventory. As commented by Wienclaw, (2013) generally, three e-commerce areas are there,
which are, online retailing, online auctions and electronic markets. Electronic business supports
the system of e-commerce. According to Brendell et al., (2013) all or some of the following
may be employed by the businesses of e-commerce, like, online shopping for the direct retail
sales to the consumers via mobile apps and web sites; via chatbots, live chat and the voice
assistants; business to business selling and buying; participating in the online marketplaces;
electronic data interchange of business to business nature. Some of the common electronic
commerce business application are controversial commerce, digital wallet, electronic tickets,
supply chain document automation, group buying, enterprise content management, instant
messaging, online banking, newsgroup, online office suites, online shopping, pretail, order
tracking, software of shopping cart, teleconferencing, social networking, payment system of

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international and domestic nature, virtual assistant. This research paper aims at discussing the e-
commerce system’s legal issues of complex nature in the United States. For the purpose of
identifying e-commerce system’s legal issues of complex nature in the United States, the
following things are to be discussed, Business Formation, Business Model and the Business
Cycles, Intellectual property in relation to protection of asset, Agreements of the Employment,
Transitional Law, Compliance Issues, Regulatory Issues and Issues of Liability.
1. Business Formation, Business Model and Business Cycles
In the United States the law of business formation is regulated by the State authorities.
However, most of the business laws of the different states are similar in nature. In addition, few
laws of the federation affect, the consideration of business formation, some of them are,
employment laws, federal tax laws. There are several types of business entities, which are,
Business Formation
Sole Proprietorship
As per Cooper et al., (2016) Sole Proprietorship is a business form in which all of the
business assets are owned by one person in the own name of his or her. Any person who
conducts the business for his or her own need and who runs a business without creating any
separate business organization in a formal way is said to operate a sole proprietorship. Various
small businesses are operated as a sole proprietorship, which includes the professional
consultants and the other services of business. These are the businesses which require minimal
capital amounts. As stated by Pomerleau, (2015) unlike any partnership or corporation the sole
proprietorships are no separate legal entity, and hence, there is no necessity of the legal

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formalities for creating this business form. The sole proprietor needs to report the business
expenses and incomes on the Schedule C on his or her personal federal income tax return. Least
protection is given in the sole proprietorship as the sole proprietor’s liability is generally
unlimited. The personal assets as well as the business assets of the owner of the business can be
claimed by the creditors of the business. Additionally, the sole proprietor’s existing liabilities
would not be extinguished on the sole proprietorship’s sale or dissolution.
General partnership
The general partnerships in a business are considered as the joint business where in the
general partners share the management responsibility, profits and the debts liabilities. In a
general partnership all the general partners are liable for all of the partnership debts. Moreover,
any of the partners alone have the right of binding the partnership based on the contracts. In
short, the general partnership is the collaboration of the two or even more sole proprietors.
Limited partnerships
According to Aaronson & Ariel, (2011) the limited partnerships are considered as the
special partnership type that are the most common at the time of need for business funding, or at
the time of putting together any real estate development investment. An agreement in a written
form between the management of the business is required in a limited partnership. The business
managements are the general partners as well as all the limited partners. Fund investments are
made by each of the limited partners into partnership and are supposed to receive a
predetermined profit share that is generally more than each general partner. The limited
partnerships need to file the name or names and the addresses of all the general partners before

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the State Secretary or the other designated officers of the state where in the partnership has been
created as the public would be able in finding out the parties responsible.
Corporations
As stated by Drucker, (2017) Corporations are considered the organizations which are
formed with the approval of the state government for acting as artificial person for carrying on a
business that is authorized of suing and being sued and which has the power of issuing stock
shares for raising funds in order to increase the capital or starting any business. The corporations
are separate legal entities so the debt liability or the caused damages of the corporations can be
limited to the assets of the company. Corporations can be of two types that are, C corporations
and the S corporations.
Limited Liability Company
The limited liability company is considered as a business of non-corporate nature; the
owners of his participate actively in the management of the organization and are generally
protected against the personal liabilities for the obligations and debts of the organization. The
LLC has the characteristics of both a partnership and a corporation. The owners of the LLC are
provided with the protections of corporate-like nature against the personal liabilities.
Business Model and Cycles
Business to Consumer (B2C)
As commented by Massa & Tucci, (2013) the B2C businesses conduct their business by
selling to the end users. B2C is considered as most common model of business, thus, various
unique approaches are there in this type of model. The process of decision making for the

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purchase of B2C is considered shorter than the purchase of business to business (B2B),
particularly for the lower value items. The B2C model includes products as well as services.
Because of the sales cycle of shorter extent it spends typically less amount in marketing but also
have lower order value average and recurring amount of lesser value than the B2B counterparts.
Business to Business (B2B)
As per Casadesus‐Masanell & Zhu (2013) the business model of B2B is considered of
selling its products or the services to other businesses. The buyer may sometime be the end user,
however, sometimes the buyer ay resell the products or the services to consumers. Generally the
model of B2B is a sales cycle of longer extent but of order value of high rate and more of
recurring purchases.
Consumer to Business (C2B)
As explained by Schneider & Spieth, (2013) the businesses of C2B nature allow the
individuals of selling the goods and the services to the companies. The competitive edge of the e-
commerce model of C2B nature is in the pricing for the goods and the services. The consumers
are given the power of naming the price or having businesses that competes directly in order to
meet the needs.
Consumer to Consumer (C2C)
According to Schneider & Spieth, (2013) the business of C2C connects the consumers
in exchanging the goods and the services and typically making the money by way of the
transaction or listing the fees. This type of businesses makes the benefits from the self-generating

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growth by the motivated sellers and the buyers, but may face key challenges in the control of
quality and the maintenance of technology.
2. Intellectual Property: Asset Protection
In the sphere of e-commerce intellectual property is mostly neglected yet it bears the
highest value in the e-commerce world. The reason behind this can be either of the less
understanding of the component or the non-apparent important connection to the e-commerce.
The intellectual property has never been defined formally. As stated by Laudon & Traver
(2016) there can be two primary categorization of the intellectual property, one is the copyright
and the other is the industrial property. The literary or the artistic creations are protected by the
copyright, whereas, the trademarks, commercial names and the inventions are dealt by the
industrial property.
According to Nica, (2015) the importance of the intellectual property to the e-commerce
can be in various ways. The disclosures of the trade secrets are protected by the law of
intellectual property, which means they are protected from the unfair competition. Due to this
certain feature the intellectual property can be considered as an asset which is more worthy than
a tangible asset. Without the laws and practices of the intellectual property, hard work would
have been stolen and would spread over the world without making payment to the creators of
their labour. The technical securities are essential in deterring the theft of less proficient nature,
but the laws of intellectual property are necessarily required for dealing with the crimes of more
serious nature. As per Hanna, (2016) the concern should be on two important primary areas,
which are, safeguarding personal intellectual property and the violation of the intellectual
property of someone else.

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Safeguarding personal intellectual property
One common mistake in this regard is the disclosure of the intellectual property even
before filling such property’s protection. As an example, in various countries, making public of
the trade secrets automatically results in the dissolution of protection.
Violation of the intellectual property of someone else
Many of the small entrepreneurs of e-commerce disregards the issues of the intellectual
property by way of using dictum stating all the free things on internet are free for using. They
ignore the fact of the violation of intellectual property. When a company is small they may be
able of flying away under radar, but with the growing up the flagrant violation of intellectual
property would stand out. The e-commerce companies must take the issues of the intellectual
property seriously. The contents that the e-commerce companies are placing on their website
should be something which would be of their own; they have the expressed permission of using
such; must be in public domain and needs to be covered under the fair use.
When a company plans of selling its e-commerce business, they have to prove the protection
of their intellectual property, for such purpose they need to do an audit of the intellectual
property at least for once. In other words, the proper documentation of the intellectual property
enhances the business stability.
Several website parts are there which have been vested with different intellectual property
protection, some of them are, systems of e-commerce, search engines or the other internet tools
of technical nature; software which includes text-based HTML codes used in the websites vested
with shield; website designs; all contents of the website; databases; logos; business names;

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product names; names of domain and the other signs; computer generated displays, graphic
symbols, Graphic User Interfaces and even the webpages.
3. Employment Agreements
Under the United States law, no minimum requirements are there for the employment
agreement. Further, in most of the states, no memorialization in writing is required for of any of
the terms. In the United States a relationship of employment is generally presumed of being at
the will, which means, that is terminable by the either parties, with or without the notice or
cause. According to Petrescu & Panea, (2018) in the United States, a vast number of employees
are generally employed based on the will, and without any written employment agreement,
further only with an offer in written manner of the employment which outlines the fundamental
conditions and terms and of the employment. Whether any relationship of employment is at the
will or is at the pursuant to any written employment agreement, the parties would be free of
negotiating and setting the conditions and terms of the relationship, for the time being, any of the
provisions of the agreement violates any of the federal, local or state laws, the rules or the
regulations which governs the relationship of the employment.
Fixed-term or the open-ended agreements
None of the legal provisions govern the fixed or the unlimited term agreements. Unlike
many of the countries, the law of the United States never limits the fixed-term employment
agreement’s duration or circumstances under which a party might enter into any fixed-term
employment agreement. In absence of any employment agreement, the relationships of

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employment are generally presumed of being at the will, and terminable by the either parties at
any moment, with or without the notice or the cause.
Trial Period
None of the legal provisions govern any formal period of trial. However, several
employers have the internal policy on the period of trial, which is often referred as the
introductory periods or the probationary periods. The internal policies usually are crafted on the
basis of any particular employee’s needs. They usually provide for the evaluation of the formal
performance after the period initially stated of the employment, usually the period is ninety days.
Notice Period
Except in some dismissals of mass nature or as being provided in any employment
agreement or in any agreement of collective bargaining, the law of the United States never
imposes any formal period of notice for terminating any individual relationship of employment.
Most of the employees have been employed at the will and the either parties would be able in
terminating the relationship of employment without giving any notice. Under the Worker
Adjustment and Retraining Notification Act (WARN Act), all the employers need to give a 60
days’ notice in advance for affecting the employees in the advance of the closing of the plant or
covering the mass layoffs.
As stated by Freedland et al., (2016) while building an e-commerce business, a person
needs one solid foundation for ensuring that the business must survive through the rough times.
The marketplace suspensions, poor experiences of the customer leads to the reviews of negative
nature, the problems of supply and many more affects the business. A right team would make it