With online shopping having become the norm for most consumers, many sellers are now taking their business to the internet to capture a larger market.
As a prospective seller, you have many chores to tick off your list. Apart from getting an e-commerce website built, you must also ensure that your company has been registered in the correct manner, with all the requirements for your business to be up and running smoothed out before you launch.
In India, though the start-up culture has grown and blossomed wildly over the last few years, most companies are not completely aware of the legal procedures and requirements that go into establishing the legitimacy of their business, which can often lead to a myriad of issues down the line.
So, in order to help you prevent the same, we’ve jotted down everything you need to know about registering your company as an online seller.
Registering your company
To begin with, you must identify whether you want to register your company as an LLP (Limited Liability Partnership) or a Private Company. You can also choose to register your company as a Sole Proprietorship, as it is the simplest to register. However, do not that under a Sole Proprietorship, individuals running the business are not protected from any liability, business debts or even obligations. This is why many people prefer forming an LLP.
Ideally, you should register your company on the same state that you intend to operate in. if you are planning to register the company as a private company, you must have:
- An approved name
- A registered office address
- 2 directors with their own director identification numbers
- A minimum capital of Rs 1 lakh
- Digital signature certificates
- Memorandum of Association (MOA) and Articles of Association (AOA)
Additionally, you will need:
- Tax Identification Number (TIN)
- Permanent Account Number (PAN)
- Tax Deduction Account Number (TAN)
- A bank account registered in the company’s name
- GST Number
To find out how much GST you must pay for your goods or services, simply use an online GST calculator.
Additional laws to abide by
If you are an online seller looking to register their company, there are a few other laws that you should keep in mind while running your business. Some of these include:
- Contract law
- The Indian penal code
- Current tax laws
- Shops and Establishment Act
- Intellectual property rights protection
Abiding by these laws can help you protect your business from any potential liability issues that might crop up later. You must also abide by the cyber crime laws that are currently in place in India. These laws make it mandatory for companies to offer data security, data protection, privacy protection, confidentiality maintenance, and cyber security to all consumers that shop on their website.
As an organization, you must take care of additional details like having a proper HR team in place, along with proper employment contracts for everyone who works for you.
What is the process for registering your company?
You can register your company online by submitting all the required documents such as your PAN, company name, corporate identifiers, and so on. To do so, you must visit the website of the Ministry of Corporate Affairs. You will need your Digital Signature Certificate in order to apply for the online registration, so make sure that you have secured that beforehand.
When you’ve got your DSC and DIN, you can fill out the 1A form online to register your company. Remember to add at least 4 different name options for your company while registering the same.
The RoC generally takes close to 2 days to come back with the approval, and once you have that, you can get the company registered anytime within the following 6 months. If 6 months pass, you must initiate this process all over again!
What else do you need to run your business smoothly?
For many companies looking to sell goods online, it is crucial to have a payment gateway on your website. Most consumers these days prefer getting the payment process over with, and they are less likely to come back to a website if they sense that the payment gateway is not secure enough.
Of course, it is not enough to just have any payment gateway on the website. Instead, pick a gateway that offers a myriad of functionalities that can help you run your business more smoothly.
For instance, Razorpay offers not only solutions for online payments, but also additional functions like creating GST-compliant invoices, a smart dashboard that tracks payments, customer behavior trackers that can help you spot trends, and much more.
With all of this in place, you need never worry about the smaller details that go into running the business and can, instead, focus on the larger picture, like your growth.