RUNNING an online business is an increasingly popular option to earn income these days. After all, most of us already spend many hours a day connecting with others on social media, sending and receiving email, gathering information from the Web, and downloading pictures, documents, books, music and videos.
And of course, performing transactions through personal computers and smartphones has become second nature for many people. So why not set up shop in the digital world if we have something to sell? It can be fast and simple.
Best of all, technology allows an online entrepreneur to operate with a smaller investment of time and capital than if he had a bricks-and-mortar business.
However, people sometimes mistakenly believe that because an online business does not have a physical presence, it is not subject to the many laws that govern traditional commerce and industry.
Companies Commission of Malaysia chairman Datuk Seri Alias Ahmad highlighted this problem on Monday when he pointed out that many online businesses had not registered with the commission. He said about 30,000 such businesses had done so since 2012. This is a low number when you consider how frequently we come across people selling goods and services by reaching out to potential customers solely through websites, social media and mobile applications.
Alias added that in 2014 and 2015, the CCM had taken action under the Business Registration Act against more than 1,000 online business owners for failing to register their businesses.
However, it appears that the level of awareness is rising. Last year, 6,389 online business companies were registered, which is more than double the 2,690 in 2014. But a lot of people still have to learn about the importance of business registration.
A seasoned entrepreneur will tell you that registering a company, a sole proprietorship or a partnership is a standard first step in any business journey. So perhaps the large number of unregistered online businesses is more likely the result of inexperience than a disregard for the law.
Nevertheless, the online businessmen should appreciate why registration matters, and not just because the law says so.
For example, Alias said the laws on business and company registration helped protect consumers because it enabled people to verify information on the business owners.
In addition, the registration data is useful in the formulation of government plans and policies.
Business registration benefits the owner because it cements his claim over the business name, projects professionalism, and eases the dealings with customers, suppliers, banks, government agencies and employees.
Online commerce may have its own set of rules because it operates differently from the bricks-and-mortar enterprises and because the online buyers and sellers can be quite distinct from those in the traditional markets, but whether online or offline, all businesses work best when there is a healthy balance of confidence, regulation, fairness and freedom.