All You Need To Know About Registering An Online Business In India
Establishing a new business in India is
an arduous and time-consuming process, but if you learn from your mistakes,
enjoy your laurels, and stay patient, the fruits of your labor will start to
pour in in no time.
It would be best
to have a business plan to outline your business objectives, funding, and
setup. Once you know in which direction you are headed, it becomes simpler to
start. Entrepreneurs seeking to launch their company must first receive a
permit to operate it. This article shares information on the procedure of
registering online businesses in India.
Registering
An eCommerce Business In India: Sole Proprietorship
For starters, a
sole proprietorship is the easiest way to start a company because it demands
lesser legal compliance and is easier to handle. You, as a proprietor, are a
single entity in all legal matters. Thus, your brand/company and you exist as
one soul, with no bias whatsoever. You can run a proprietary business out of
your home, for which no special registration is required. However, when your
business turns profitable and seeks expansion, it is wise to set up a physical
office/commercial store. And for that, you need to complete paperwork as per
the Shops and Establishment Act of 1965 and register the documents with your
local municipal corporation for further processing.
An eCommerce business that intends to accept
online payments must be a registered company. Only registered companies can
integrate an authorized payment gateway into their website.
Registration
Of Sole Proprietorship For eCommerce Business
You can register
your eCommerce business under sole proprietorship at your nearest local
municipal corporation office. To complete the registration process with the
authorities, you need to submit the duly filled Shops and Establishment Form.
Essential
documents for submission to the municipal corporation include:
•RegistrationForm
•Undertaking
• Fee Schedule
Cost
to Establish a Sole Proprietorship Business
There is
absolutely NO additional cost required. All you really need is a current
account in the name of your business at
a bank of your choice. However, for opening an account, you would need to
submit an address proof of the establishment like electricity or telephone bill
or a rental agreement to rent the commercial space.
Apply For Company’s Registration
This is the
final step in establishing a sole proprietorship business. This includes
incorporating the company name, registering the office address, notice for
appointment of company directors, managers, and secretary, and declaring the
employees’ salary structure. The following forms are needed to proceed with the
process.
Form 1: The application form for
availability or change a company name is declared in Form 1. Once you apply for
a new company name, the MCA (municipal authority) will suggest four different
forms, and you have to choose the most suitable one from the options.
Proprietors can download this form from the website www.mca.com.
Form 18: You must declare authentic office
address for your new E-Commerce establishment in Form 18, which you can collect
from your local municipality office or download from the website www.mca.com
Essential
Documentation for Registration Process
Promoters who
intend to be the Directors in a company must apply for Director’s
Identification Number (DIN). Thus they must have a Permanent Account Number
(PAN) and Digital Signature Certificate. The DIN application (DIN 1 form) is
available on the website – www.mca.gov.in. Shareholders can apply for DIN
online as it is a convenient way to upload and attach essential documents.
Upon obtaining
the DIN, Directors must apply for the availability of the company’s proposed
name to the ROC. Shareholders must fill the MCA-21 form (available on the
www.mca.gov.in portal) for the same. Upon receiving confirmation on the name,
the proposed company must be incorporated within 6 months; the name must be
renewed by paying a fee.
Here is the
procedure for ease of understanding.
Step 1: Fill An Application To Obtain
Directors Identification Number (DIN); It Hardly Takes One Day To Receive It
From The Government Authority.
Step 2: Apply For The Digital Signature Of
Directors Of The Proposed Private Limited Company (Pvt. Ltd.) In India.
Step 3: File An Application To The
Respective Registrar Of Company (ROC) To Obtain Approval On Company’s Name.
Step 4: Once the confirmation on the name
is obtained, fill an application for the company’s registration to the same ROC
of the state where the company has its headquarters. Simultaneously, the
company’s members must be ready with legal documents like Memorandum of
Association and Article of Association, identity proof, and residential proof
of the Stakeholders.
Step 5: Apply For VAT At The Commercial
Tax Office, Followed By Professional Tax At The Profession Tax Office, Both
These Identification Codes You Shall Receive Within A Few Days.
Step 6: Apply for Provident Fund (PF) with
the respective Provident Fund Organization. You need to submit the essential
documents of the employees in the process.
Step 7: Register with the Employees’ State
Insurance Corporation for medical insurance of the employees. If your employees
meet with an accident on the job, this plan will take care of the medical
expenses on behalf of the company. Submit the essential documents
of the employees to the regional office.
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