E-Commerce Business

Types of E-commerce model

Building and establishing your e-commerce business begins with research. You need to research and choose the business model that best fits your e-commerce business.

Business structures include:

B2C (Business-to-Consumer)
B2B (Business-to-Business)
C2B (Consumer-to-Business)
C2C (Consumer-to-Consumer)
D2C (Direct-to-consumer).

Business Registration

Choosing a business model is the first step in making the Entrepreneur's dreams a reality. As most banks in India are reluctant to lend money to e-commerce startups, most e-commerce businesses require lots of equity capital to start and operate. A private limited company is the best way to start an e-commerce business since it provides a few benefits, such as

limited liability protection
transferability
ability to have equity partners or investors
being a separate legal entity.

Private limited companies can be formed with an authorised capital of ₹1 lakh and then increased as more investments are made in the form of private equity or bank loans.

Starting an e-commerce business as a Limited Liability Partnership (LLP) or One Person Company (OPC) is not recommended
In LLPs and OPCs, equity investment is not allowed in the business. Ecommerce businesses are best started as private limited companies.

Opening a Bank Account

An e-commerce business needs a bank account after it has been registered as a business entity. It is very easy to open a bank account in the name of a Private Limited Company.

To open a bank account, an entrepreneur can present :

A Copy of their PAN card
Memorandum of Association
Articles of Association
Certificate of Incorporation of their company to any bank.

Licenses Are Needed to Start an E-commerce Business in India

To be a legal and valid company, you'll still need the right licenses and permits, even if your business is mostly online. After incorporating your e-commerce business, you should apply for GST registration so you can file your tax returns annually. Your business will also need a Shops and Establishment Licence to set up a Payment Gateway. You will need a valid license from the government and a PAN card to set up a payment portal through which your customers can pay for the products they purchase.

Tax Registration

It's essential to get a PAN card for the business and open a bank account before you can register for taxes. If the business sells goods or products in India, it needs VAT / TIN registration from the state sales tax department. Getting a service tax registration is necessary if the business provides services online.

To complete the seller registration process, VAT / TIN Registration must be obtained if the business plans to sell online through marketplaces.After obtaining TIN registration, a copy of the PAN card, Certificate of Incorporation of the Company, and cancelled check can be submitted to start selling online on marketplaces. The business may be required to set up a payment gateway if it plans to sell goods or services online through its own website.

Payment Gateway for Ecommerce Business

Credit cards, debit cards, net banking, and cash cards can be processed through an online payment gateway. Payment gateway providers require these documents for e-commerce websites:

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

The e-commerce business will be provided with an online payment gateway once the above documents are submitted.

Here are some Indian payment gateway providers:

CC Avenue
PayU
EBS
DirecPay

How to Incorporate an E-commerce Business

To incorporate your e-commerce business, you'll need a Memorandum and Articles of Association, a Director Identification Number, and a PAN. When you have all these things, you can register a unique name for your company and then register with the ROC. It's easy with Zolvit by your side.