The Internet helps you explore and purchase almost anything that you need. You can search the required query in search engine tab related to a product, and you will find many options to choose from. All the details you need regarding the product, you will find it on the internet itself. Web-based stores will allow you to gain more information regarding the product you are interested in.
Starting own online shop reduces the stress of monthly rent and for customers its convenient to reach your shop very quickly from the comfort of their house.
To setup an online business you need to determine Business Strategy(what works best for you), what products to sell, a user-friendly website and a legal document of authorization/legal aspects of E-commerce.
How to get started:
1. Legal Aspects
To make business startup legal and authorized, you will need a business name, tax and legal documents to register your business.
There are ways of registering a Company name to form a business person as a corporation or limited liability company (LLP).
Company Registration in India:
There are some types of company registration such as One Person Company (OPC), Limited Liability Partnership (LLP) and Private Limited Company (PLC).
One Person Company (OPC): It consists of only one person as owner or promoter affiliated to the company. OPC can be registered only by Resident Indian citizen. There has to be only one person as shareholder and nominee. Here limited liability is provided which is a huge advantage since you don’t have to be worried about your assets to be on the stake. This type of company will have its own MOA(Memorandum of Association), AOA(Articles of Association), DIN(Director Identification Number), TAN(Tax Deduction and Collection Account Number) and Company name.
Also, the Government has provided three years of Tax holiday under section Startup India Higher Benefits on Depreciation for this company type.
Limited Liability Partnership (LLP):Introduction of LLP (Limited Liability Partnership) into your business will benefit an individual’s assets from the company’s dept in the future. The first leverage of a Limited Liability Partnership over a long-established partnership business is that in an LLP, one partner is not responsible alone for another partner’s immorality or disregard. All partners in an LLP relish a form of limited liability protection for each’s protection within the partnership, similar to the shareholders of a private limited company. However, unlike private limited company shareholder, the partners of an LLP have the right to manage the business directly.
LLP will ensure that opening of Bank Accounts in the name of the business or retrieving a VAT registration is quick and effortless.
Before applying for LPP, you will first need to apply for Designated Partner Identification Number (DPIN) and Digital Signature Certificate (DSC).
It also has low investment needs along with high depreciation.
Private Limited Company (PLC): It includes shareholder and company officers having separate legal liabilities limited to the shares they hold against the company. The word “limited” refers to limited liability which means it is limited up to the shares of shareholders; no personal assets of shareholders remain safe. Bank will recover its recovery only from the company’s assets by selling them.
GST (goods and service Tax): GST is an Indirect Tax which replaced many Indirect taxes, introduced in 29th March 2017 and is mandatory in India for all Business holders. As an Entrepreneur applying for Online GST Registration is very essential for his/her business.
Three components of GST-
CGST: The tax collected under CGST(Central Goods and Service Tax) on an intra-state for the center (Eg: transaction happening within Maharashtra)
SGST: The tax is levied by SGST(State Goods and Service Tax) on an intra-state sale (Eg: transaction occurring within Maharashtra)
IGST: The Tax collected by IGST(Integrated Goods and Service Tax) for inter-state sale (Eg: Maharashtra to Tamil Nadu)
Adv. of GST:
- Increasing Tax effect
- Fewer compliance’s
- Increase in Logistics.
For GST application you can consider approaching Afleo.com.
2. Know what products to be sold
Get some research done prior regarding profitable products, which gets sold easily in your area. Make sure to collaborate with a few known brands and provide coupons/offers for the customers. Websites are providing automated price comparison which drives customers interest to buy the product without thinking twice. Interested shoppers know where to look for discounts.
Also, products can be of your Niche, which makes you more knowledgeable about the product you selling. Provide services that make you unique from any other online shop.
3. Business Strategy
Before putting it all together, there are few factors to keep in check with, and they are listed below:
Production Cost – The costs gained by a business while manufacturing a good or providing a service. It includes a variety of expenses, such as labor services, raw materials, consumable manufacturing supplies, and general services. Also, tax collected by the Government.
Shipping costs – Shipment cost for transportation of goods required for the business purpose.
Domain and Website hosting Cost– To make a website you need a Domain name and web hosting server.
Employee wages (if any)
Legal aspects – GST Registration, Company registration, Bank Account and its details, Payment Gateway, Legal Documents, Fidelity to cyber law crimes.
… (legal aspects explained in detail below)
Bank Account: Opening of a bank account is essential to list on an eCommerce marketplace or obtain payment gateway for a proprietary eCommerce website. Having a separate bank account for business is vital, which helps tally income accordingly and mess free.
The revenue generated on your website will be directed to your bank account directly.
Advantage due to this is that a professional personality is reflected, identity remains protected, gain bank relationship, simplify tax audits.
Payment Gateway:It provides customer to make payment through credit card, debit card, net banking from multiple banks and credit card companies. It is convenient to use merchants website as payment gateway since they provide flexible and secure options while making payment. Hence, one payment gateway is adequate to accept online payment.
Four types of Payment Gateways:
- Hosted Payment Gateways
- Self Hosted Payment Gateways
- API
- Local Bank Integration
Cyber Laws:E-commerce websites in India should have privacy protection, data protection, data security, cyber security, confidentiality, maintenance, etc.
Some common cybercrimes against Business are computer System Attacks, Malware (Viruses, Spyware, Bots), Phishing, Identity Theft, Social Engineering, etc.
Precautions like full-service internet security suits, strong passwords, updated software, home network strengthening should be taken care of.
As a young Entrepreneur, you should take care of the legal aspects mentioned above for successful business ahead. Also, choose the business structure which suits your best and go ahead accordingly.Afleo.com is a business platform which helps the small business owners to start and develop their business in India, at an affordable cost. Also, Afleo.com provides business services like intellectual property rights, incorporating of company, GST registration filling and returns.
