E-Commerce Through Social Media: Do You Have to Register Your Business

by | Jun 12, 2021 | Business, Featured, Law


2020 was a year of change when we were hit by Covid-19. It has been almost 2 years since we could no longer socialized with other people, instead of greeting each other with a warm gestures, our social contact are now limited to one meter distance, hand sanitizer and surgical mask as our weapons in our war against Covid-19. Small-business owners were forced to shutter their store as the corona virus pandemic prompted a mandate requiring all non-essential business to close. To stay afloat in this pandemic outbreak, most of the business owners found creative ways to change their operating model. With the help from technology, most of the small-business owners implement the use of technology and online platforms as their business mode.

Many business owners are now using their Facebook, Instagram, BlogSpot and many social media as a platforms to stay afloat. One of the perturbing questions that are usually at the back of these business owners mind are “whether or not they should register their online business?” as unlike the traditional business where it involves brick and mortar, e-commerce or online businesses only required the owner to have a fast internet access, laptop and a phone. E-commerce has minimal requirements business in compared with the traditional way of business.

In 2010, there were 400 online businesses in Malaysia that were charged for not registering with the Companies Commission of Malaysia (SSM). In addressing this issue and confusion that occurred among the online business owners, Malaysian Consumer Protection (Electronic Trade Transactions) Regulations came in force in 2012 where it is mandatory for all online business owners to meet the requirement set out under this sub legislation before commencing their online business.

  1. Provide full disclosure of information

As an online business owner where it is not necessary for you to meet the buyer physically, it is required under the law that you must provide the following details in your online platforms;

  • Your name or name of the company or name of the business that operates the online business
  • Company or business registration number, if applicable
  • Contact address;
  • Description of the goods or services provided;
  • The full price of the goods or services. This must include shipping cost, other cost that you intend to charge the buyer;
  • Method of payment;
  • Your terms and conditions for the sale;
  • The estimated time of delivery for goods purchased.
  1. Rectify any errors and provide receipt

Buyer are allowed to rectify any errors prior to confirmation of any purchase. As an online seller, you are also required under the law to provide proof of payment by issuing a receipt to the buyer.

  1. Maintenance of Records

If you are an online marketplace operator that sells third party goods or services, then you must take steps to keep and maintain information of your third party suppliers which include name of supplier, their contact number and address for at least two years.

Therefore, in this new era of technology, it does not only allow the online seller to provide a faster service but also allows fraudulent misconduct like scammer to occur. The current law that regulate business online does not only exist to protect the business owner but also to protect the buyer from potential scammers. By failing to register, the online business owner will be subjected to  fine of up to RM100,000  or imprisonment up to three years or both. If you commit the offence again, you will be fined up to RM250,000 or imprisonment up to six years or both.

Khairina Binti Abdul Malik

Share This