That\u2019s right…But which legal provisions do I have to follow? I have no clue!<\/p><\/blockquote>\n
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Don\u2019t worry. That\u2019s why we are here. In this comprehensive post, we will discuss the easiest method of complying with the government\u2019s rules and regulations i.e. by registering your business as a sole proprietor.<\/p>\n
Understanding the Need for Registration of your online business<\/h2>\n
As per the existing Indian law, if an e-commerce business wishes to accept online payments via an authorized payment gateway on its website, it will have to get registered with relevant government authorities (depending on the scale, operation and location of business). In other words, you cannot accept online payments without registering your e-commerce business.<\/p>\n
Now, several options are available for registering an online store. Each option has its own merits, demerits and associated cost. After analysing all the available options, we came to a conclusion that registering an e-commerce store as a sole proprietorship is the easiest, most advantageous and cost-effective option for small start-ups. Here\u2019s why-<\/p>\n
Structure of a Sole Proprietorship<\/h3>\n
![\"sole-proprietership\"](\"https:\/\/i0.wp.com\/shopnix.in\/blog\/wp-content\/uploads\/2014\/09\/sole-proprietership.jpg?resize=640%2C283\")
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- \n
- The government does not view sole proprietorship as a separate entity. In simple words, you and your business are the same persons in the eyes of the government. This means no need of filing two returns. Sounds easier, doesn\u2019t it?<\/li>\n
- A sole proprietorship is relatively easy to register. You don\u2019t have to follow long procedures of registration as in the case of a company.<\/li>\n
- You can anytime open or shut down your business. No questions asked!<\/li>\n
- You will have ultimate control over the operations of your business. Government will hardly interfere (unless you violate any law).<\/li>\n
- Lowest rates of taxation (individual rates) are applicable to a sole-proprietor, thus saving you a handsome percentage of your profits.<\/li>\n<\/ul>\n
Owing to the above merits, we advise our clients to register as a sole proprietorship concern. In order to register your online store as a sole proprietor, you just need to follow a simple registration procedure as mentioned below.<\/p>\n
The Registration Procedure<\/h2>\n
a) Where to Register?<\/h3>\n
You can register your online store as a sole proprietorship at your nearest local municipal corporation office.<\/p>\n
b) What is the Procedure?<\/h3>\n
- \n
- Fill and submit the Shops and Establishment form.<\/li>\n
- Submit an undertaking (available with the form).<\/li>\n
- Pay registration fees (varies from state-to-state and city-to-city).<\/li>\n
- Submit an address proof of your e-commerce business. It might be your home or your office.<\/li>\n<\/ol>\n
All the above forms, fee schedule, etc. are available online on your city\u2019s municipal corporation\u2019s website. It is advisable to thoroughly go through it before registering your business.<\/p>\n
c) What is the Additional Cost of Setting up a Sole Proprietorship?<\/h3>\n
There is NO additional cost involved. You just need a current account in the name of your business, that\u2019s it.<\/p>\n
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Which other provisions will I have to comply in future?<\/h2>\n
Depending upon the nature, scale and volume of your business, you may have to acquire different licenses in order to comply with the existing laws.<\/p>\n
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- PAN card<\/li>\n
- TAN (tax collection and deduction account number)<\/li>\n
- Service Tax – if you are providing a service (not selling a product)<\/li>\n
- VAT\/CST Registration – if you are selling a product (not providing a service)<\/li>\n
- Central Excise License<\/li>\n
- Importer Exporter Code – if you are exporting outside India<\/li>\n
- ESI (Employee State Registration) – if you have employees<\/li>\n
- Employee Provident Fund Registration – if you have more than 20 employees<\/li>\n
- Professional Tax<\/li>\n<\/ul>\n
If you wish to know more about registering and setting-up your e-commerce business? Subscribe to our Free Ecommerce training course and get started.<\/p>\n
<\/p>\n
\n\n![\"Ecommerce](\"https:\/\/i0.wp.com\/shopnix.in\/blog\/wp-content\/uploads\/2014\/09\/ecommerce-india-training-506x1024.jpg?resize=300%2C600\")
<\/p>\nGet the FREE Ecommerce India Training Course<\/div>\nLearn everything you need to build a Successful Ecommerce business in India<\/b> in 15 days.<\/div>\nHere are some of the things you’ll learn:<\/div>\n- \n
- How do Ecommerce sites work<\/li>\n
- How do you create and build your store in 1 day<\/li>\n
- How to collect payments from your customers<\/li>\n
- Free tools to help you get started with your store<\/li>\n
- and much more…<\/li>\n<\/ul>\n