Online business is a business or commercial transaction that includes sharing information across the internet. With the growing use of internet and online marketing, businessmen find it convenient to grow their business over internet and attract a large number of consumers. A successful online business requires correct blend of true marketing facts, creative and achievable ideas along with strong vigor and some legal requirements.
Now let’s have a look at how to get started with selling on two of the most popular online selling portals in India
Amazon business provides a platform for businessman to register their business online. Amazon then provides warehouse for products, fulfill the orders and also provides customer services. It enables for a businessman to act as a big corporation without actually being one. It is a hassle-free working zone that helps your business to get a wider reach.
Reference link to FAQ’s of Amazon for sellers- https://services.amazon.in/services/sell-on-amazon/faq.html
Starting an online business would involve complying to all the legal formalities provided for the respective business. Some of the legal requirements are listed below:
If a person has an objective of selling goods at an online marketplace or open a web store of his own, it is preferred to register as a proprietor. An individual would require a current account in the name of the business for conducting online transactions. Registering business will help to integrate the site through a recognized gateway.
Proprietorship provides dazzle free work and keeps the confusions clear with the laws and, registered business more trust from customers.
Starting an online enterprise as a private company or Limited Liability Partnership (LLP) is a better option as it has a limited liability protection. A company also allows for equity funding, which is an important criterion for a start-up venture.
To open a private limited company, one must approve its name, registered office, minimum 2 directors with Director Identification Number (DIN) and a minimum authorized capital of Rs. 1 lakh.
A GST registration is mandatory if you are starting an online business.
While starting an online business, it is mandatory to open a bank account in the name of the business which would be an essential payment gateway for the online business.
Payment gateway providers allow the website to accept credit card, debit card, net banking, internet banking payments from multiple banks. Therefore, one gateway is sufficient for multiple forms of online payments.
For every businessman, to protect himself from any fraud it is necessary to create proper legal documentation like terms and conditions, legal document and private policy based on the nature of business.
If the business is setup on an online platform, the terms and legal document/ seller’s agreement is provided by the online marketplace. Before entering into any such agreement, the seller must read the terms and conditions of the agreement thoroughly so that he can abide by them.
Registering your business on Amazon would require a GSTIN Number and GST Registration certificate as an addition.
Identification Proof require different documents and certificates depending on the type of business entity you ought to have.
For partnership firm, private company, public company, the following documents are accepted:
For sole proprietorship- in addition to the above document PAN card, drivers license or passport of the businessman is accepted.
Reference link- https://www.amazon.in/gp/help/customer/display.html/ref=hp_left_v4_sib?ie=UTF8&nodeId=202117520
Compliance of the tax liability is necessary for any type if business. Whether you prefer any gateway of payment like net banking or Cash on Delivery, adherence to the Tax Laws is essential. With the tax laws, compliance to the Goods and Services Tax is a must.
i) GST Compliance
E commerce has a major impact on GST. Government has provided special provisions to be followed by online service providers.
An online seller must file following GST returns as per the applicable timeline.
ii) Tax collected at source
Online supplier has to mandatorily deduct TCS @ 1% of the net value of goods supplied.
iii) Place of supply
GST of goods/services will be taxed at the place where the goods are delivered.
iv) Other legal compliances to be considered
Flipkart being the largest online marketplace in India, helps you to group your business and reach a greater audience. Flipkart lists the following reasons which provide good start to the businessmen-
Anyone who sells new and genuine products can become a seller on Flipkart. Any person wanting to get registered must have the following documents-
Reference link to FAQ’s of Flipkart for sellers- https://seller.flipkart.com/slp/faqs
(The author is a CA in practice at Delhi and can be contacted at: E-mail: [email protected], Mobile: +91-9811741451)