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Legal Permissions Required to Start Ecommerce Business License in India

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What is E-commerce?

E-commerce or electronic commerce is a term used for deals done through electronic media. e-commerce is the sale of buying and selling of goods, furnishing services, or transferring finances through an electronic network i.e. through the internet.

Why E-commerce?

E-commerce is a business model, which enables the buying and selling of goods and services through the internet. You don’t need to set up a shop, get it furnished and arrange a lot further effects to start a business. Through e-commerce, you just need to apply for online company enrollment, gain GST enrollment and you're good to vend your products and services online. It saves cost and reaches numerous further guests in comparison to offline businesses. 

People in India are getting more and more tech expertise. Rather than going to shop at a original store, everyone prefers to shop online. As there are a lot of options available online to compare with and prices are also lower than the original offline stores due to competition and low conservation cost. 

For starting a business, starting an e-commerce business is the stylish option as it's the fastest way of buying and selling of goods and services. It has veritably low functional costs. There's no geographical boundary for e-commerce business. It simplifies the business process and makes the business process presto and effective. 

Although e-commerce has numerous benefits, it has a many disadvantages as well. There's a lack of translucency as there's no physical verification of the product. Making a payment online is also a bit parlous due to cyber crimes and hacking of websites.

Legal Processes of Starting an E-commerce Business

To start an e-commerce business, personal e-commerce website or come a dealer on a business, the following enrollment is needed.

Company or LLP (Limited Liability Partnership) Registration

While starting an e-commerce adventure it good to have a company or LLP to have limited liability protection and ameliorate the ease of doing business. Having a company or LLP would insure that the opening of bank accounts in the name of the business or carrying a GST enrollment is easy and fast.

Nearly all commerce allows Proprietorships and Partnership enterprises to vend on their website. Still, there would be no limited liability protection in case of action. Hence, it's stylish to start dealing with an LLP or Company.

In case the promoters wish to start a personal e-commerce website, also it's stylish to start with a company, as it's the only type of reality that can allow for angel backing or equity backing – a must have for successful e-commerce gambles.

GST Registration

GST enrollment is a must-have for getting a dealer on an e-commerce gate or while starting a personal e-commerce website.

Bank Account

Once the Company or LLP is incorporated, a bank account can fluently be opened in the name of the business by reaching a Bank. In the case of Procurement establishment, GST enrollment must first be attained to open a bank account in the name of the business. Opening of bank account is essential to list on e-commerce business or gain payment gateway for a personal e-commerce website.

Payment Gateway

A payment gateway would be needed for a personal e-commerce website to reuse client payments. The payment gateway provides allow for the website to accept credit card, disbenefit card, net banking, internet banking payments from multiple banks and credit card companies. Thus, one payment gateway is sufficient to accept numerous forms of online payments. Formerly, a payment is entered from the client, the payment is transferred to the bank account of the business by the payment gateway handed in one or two business days. Read the composition on “how to get a payment gateway” to know more.

In case of dealing through online commerce, the business would accept the payment through their payment gateway and credit the plutocrat to the bank account of the dealer directly. Hence, it doesn't bear a payment gateway and only a bank account is necessary.

Before starting any business you must know how you want to start your business, what's going to be the structure of the business, and what the products are or services that you want to buy or vend, etc.

So, first of all, we need to know how to register our business. Below are the many options to structure your business. You can structure your business as per your convenience.

Proprietorship

This type of enterprise is possessed and managed by one natural person. The owner is the single proprietor of the business and is personally liable for all the debts and liability of the business. This is the most common structure decided to start a business, as it has minimal compliance and low cost of enrollment.

Partnership Firm

It requires a minimum of two people to start a business. It has unlimited liability and the mates are personally and severally liable to meet the arrears.

Private Limited Company Enrollment

It's an intimately held small business reality. It can have a minimum of two members and outside of 200 members. It has limited liability, members, directors or any other person aren't personally liable for any liability that arises during the course of the business.

One Person Company

OPC Registration procedure, veritably analogous to Private Limited Company, but it can have only one member & Director.

Limited Liability Partnership

Limited Liability Partnership is a combination of Pvt. Ltd. Company and Partnership. It enjoys numerous benefits. As the name suggests, it has limited liability.

Read Our Blog: LLP Registration

After deciding the legal structure of your business, the coming thing you need to do is register your association. And this name should be in conformity with the trademarks act, intellectual parcels rights, etc., and other applicable laws. The company name should be approved and defended by an applicable registering authority.

The coming step is to get a well-drafted sequestration policy for the e-commerce gate to cover oneself from being sued, and well-drafted website terms and conditions to limit the liability of the e-commerce website.

You also need to make Merchandisers Agreement to deal with problems like the dereliction in products, payment issues, quality issues, delivery issues, and numerous further vittles keeping the business model in mind. You need to get a Payment Gateway as well.

Stoner Agreement and data security are also important from the point of view of cyber security. You also need to put the benefits handed to the druggies in the Stoner Agreements.

Licenses Needed for E-commerce Business

Business licenses needed for e-commerce business varies depending upon the nature of the business i.e. products being vended on the website. Given below are the many licenses needed for an e-commerce business

  • Goods & Service Tax Every e-commerce business in India, piecemeal from the North East States, having periodic development Rs. 20 Lacs will be needed applying for GST Registration. GST is Visage grounded enrollment.
  • Shops and Establishment Act You need to get a license under this Act if you wish to have a Payment Gateway. Also, if you wish to set up a physical shop and employ some people, it's obligatory to get a license under this Act.

BOOK A FREE CONSULTATION

Get help from an experienced legal adviser. Schedule your consultation at a time that works for you and it's absolutely FREE.

Author
Shamshad Alam
Experienced Digital Marketer with a demonstrated history of working in the internet industry. He likes to write about the latest technology trends, Skilled in Digital Marketing likes. Search Engine Optimization, SMO, SEM, PPC, Content Writing, and, Designing, etc.