E-Commerce website: Legal Issues
I am from Allahabad. I have a business plan which is based on a Website (Based on only city level). Before starting my business I want to know (1)what is Legal formalities for developing E-Commerce website in india means to which type of registration necessary(Solo Proprietorship/Company) .(2)which type of documentation/Registration/Approval necessary for this type business(3)How to I take copyright on my business plan.
1. No specific legal formalities to start - anything is ok
2. a. firslty, its depends upon the type of organisation such as partnership, LLP, company etc
b. you have to comply with the cyber laws ( Information Technology Act)
d. approval/registration depends upon the nature of business
3. copy right only protects the expression and not the idea or plan. The only protection available to you is trade secret, that is, you should not reveal the plan to anyone. In practice, that not possible. So, for this purpose we have Confidentiality Agreement to share the information e to selected people who should not share it further as per the contractual terms. it also specifies the damages if the other person reveals such information.
Sole Proprietorship would be the best option for e-commerce business due to minimal legal complexities, less expensive and rapid processing. You can register your e-commerce business under sole proprietorship at your nearest local municipal corporation office. You need to submit the Shops and Establishment Form to complete your registration. Along with it, you are needed to submit an undertaking.
Documents required for registration of sole proprietorship depends upon the nature of business.
If your website aims at Service Based business, then you are required to follow two steps:
1. Service tax registration; and
2. Chartered account certification-certifying the nature of the business.
Furthermore, the following documents are required for registration of sole proprietorship:
1. PAN Card of the sole Proprietor.
2. ID Proof and Address Proof of the sole Proprietor as Adhar Card, Driving License, passport etc.
3. Rent Agreement, No Objection Certification or Electricity bills of the property where business is to be registered.
4. If Proprietor has owned any property then copy of sales deed or electricity bill is needed.
5. Copy of bank Statement or cancelled cheque.
6. Some documents like undertaking, which is prepared by a legal advisor.
If your website aims at Product Based business, then you are required to follow these steps:
1. VAT or Tax Information Network (TIN) registration;
2. Chartered account certification-certifying the nature of the business;
3. Shops and Establishment Licence of Uttar Pradesh; and
4. Certification by Certificate Authority (CA) for verifying your website’s entity on the Internet.
Similar documents as mentioned above are required for registration of sole proprietorship, except the last requirement, instead of which the document required is Security Amount as Fixed Deposit or minimum two surety of dealer for VAT Registration in some states.
The final step after registration would be the opening of a current account in the name of your business.
Copyright protection would extend from the moment of creation of the website as registration is not essential for recognition of copyright. However, for avoiding legal complexities, registration of copyright with Registrar is advisable:
Application for registration as prescribed under the First Schedule of Copyright Rules;
Fees as prescribed under the Second Schedule of Copyright Rules; and’
Signed application by or on behalf of the applicant.
Researcher: Apoorwa Iyer
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