This is the era of digitalisation. Due to its convenience and accessibility, online services are very popular these days. Increased customer base and easy marketing of the product has made the online business flourish within a short period.
There is a common misunderstanding among those who are looking to start an online business, whether they need a business license to sell online or not. Since it is different from the companies in physical form, it seems to be less formal.
In addition to your marketing plan, website designing, branding and so on business owners should take care of the legal requirements also. You risk heavy fines if the business has no proper license.
So legally, yes we need business licenses to sell online like every other company.
First of all, You are required to register your business in the form of a firm or company or as LLP.
That is
- Proprietorship firm registration
- Partnership firm registration
- Private Limited Company
- LLP (Limited Liability Partnership)
- One person company
If you are looking for a small scale buisness, going for sole proprietorship firm will be appropriate. If you have chosen a company or partnership firm you are supposed to have file tax returns and tax ID number. It’s your wish whether you want to run the business independently or want partners in it.
Once you have chosen your business structure, you have to register it. Registering your online business is an easy process. With necessary documents, you can even get your company registered even in a day.
Company registration
You have to obtain DIN( Director’s Identification Number) from the Ministry of Company Affairs. The form can be downloaded from the official website or you can apply online after uploading necessary documents.
You should have a Pan Card and must obtain a DSC(Digital Signature Certificate).
Once after getting the DIN, you can fill the application form of the company name for the approval ROC (Registrar of Companies)
Once you receive the confirmation regarding the name you can incorporate the company within six months.
whether you are offering services or selling products you have to apply for GST( Goods and Service Tax) certification.
Once you have got your GST certificate, you can open the bank account in the name of your online business itself. Afterwhich you can obtain and operate a payment gateway since most of the transactions happen through online mode.
Payment gateway
In order to obtain a payment gateway, certain documents are needed. They are:
- Bank account in the name of the business
- PAN Card of the business
- Certificate of Incorporation
- Memorandum of Association
- Articles of Association
- Identity Proof
- Address Proof
- Website Terms of Use
- Website Privacy Policy
Trademark Registration
In this competitive world, securing your brand name is important. So this registration would help you to secure your brand image so that no one can use it without your permission.
Business licenses required vary depending upon the type of products you are selling through your portal.
a)Service tax: This only required only after your annual turnover crosses 10 lakhs
- b) Professional tax: This is required if you have employe(es) working under you.
- c) Shop and Establishment Act: This is needed if you want to set up a physical shop and employ people.
Before starting an online business, it is advisable to refer a business consultant to set up all your legalities. So why wait, jump in and start your own business.
We getmycompany is there to help you with registering your business.
