Currently, the scenario of online shopping has transformed the market in a true sense. The online business shifted the market to customer-centric from seller-centric. The ease of shopping is increased as the customer will not have to visit retail shops and at the same time, the requirements for online sellers is rapidly taking a height in the online shopping business.
Given below are the legal requirements for online sellers. Each point must be considered as important as it is for the sake of running a smooth business.
The registration of any business is always advisable as it gives the business a stable and formal structure to grow, helps in the division of labor. Therefore, Company registration of the business gives an individual identity for the business along with providing the owner with all the legal rights. Registration is not mandatory but it is advisable due to several advantages of company registration some of them being easy funding, registering for government startup schemes a startup or a business needs to be registered, ease in opening bank accounts, etc.
The taxes are applied to all businesses that are selling goods and services. Being in an e-commerce business, an owner needs to apply for GST Registration as soon as they begin operations, or soon after you register your business. If you sell on any marketplaces such as Amazon, eBay, Flipkart you need to have a GST registration else you will not be eligible to sell on these platforms. Therefore, GST Registration is also one of the mandatory requirements for online sellers.
All the requirements for online sellers must have an agreement with vendors listed on their portal. If they are not running a marketplace and are only selling their own goods. Therefore, an agreement should be made with the suppliers. Thus, this agreement should define the expectations of both parties. However, this agreement should include the roles and responsibilities of both the parties, how the default will be dealt with, payment if any, etc.
The online business seller needs to ensure that they aren’t violating anyone else’s intellectual property while protecting their own. Therefore, they should ensure that the name that the business owner chooses to operate or to sell under isn’t too similar to anyone else’s name. As well as after successfully decoding the business name it is recommended that the owner gets a Trademark Registration for the same. Hence, They would also need to ensure the authenticity of the brands being sold on the online portal. The sale of fake items would always lead to legal notices for owners of the other brand.
Licensing & Permits for Online Business
How and where register the business with the state will depend on the respective state’s laws. To find out what is needed to obtain a business license in your state, start by visiting your state’s official website. However, some states have resources on how to apply for company registration and all of the requirements that must be met.
To purchase products to resell and not pay sales tax, businesses will need a resale license or certificate. Not all states require a sales license and each state has its own name for this type of license. This type of business license will allow a store to buy goods tax-exempt from a manufacturer or distributor. Then the owner collects the sales tax from the customer and pays it back to the state. Thus, Most vendors will request a copy of your resale certificate before doing business with your company.
Business Name Registration or DBA Certificate
If the business is named according to any retail business other than your own personal name. Therefore, the owner needs to file the appropriate paperwork. Some business licenses include a business name registration others require a separate registration or a DBA (doing business as) certificate. Therefore, When you file for corporate business structure, a foreign or fictitious name application is generally included.
Some industry-specific retailers such as auctioneers, hairdressers, pharmacists, optometrists, and other professionals may require state or local occupational licenses. However, If the business owner is not sure they require an occupational license, check with the industry’s trade association or the respective state’s licensing department.
Certificate of Occupancy
A certificate of occupancy may be required in some areas. After applying, the property is inspected by representatives of the necessary agencies. These may include the fire department inspector, the building inspector, and the health and/or sanitation inspector.