E-COMMERCE AND SOLE PROPRIETORSHIP
E- commerce is the place to be for small and big businesses. An e- commerce can be registered as a sole proprietorship. It is one of the most common types as it is very easy to handle. It is most suitable for small startups.
Sole proprietorship possesses the following features:
- One man show
- Unlimited liability
- Maximum and minimum member is 1
- Easy setup and closure
- No separate legal entity
- Nominal cost
Sole proprietorship offers a great number of advantages. They are:
- Easy to setup
- Fuss free as only one person
- Quick decision making
- Less formalities
- No unemployment tax to be paid
- Business and personal assets can be mixed together
- A proprietorship having less than 2 lakh capital does not have to pay any taxes
Before the ecommerce can start selling its goods/services, it is important to register. However, registration is not mandatory but it is good to be a legal registered business when selling online.
The documents required for registration are:
- Id proof
- Address proof
- Business place address proof
- For VAT, a security amount as fixed deposit
There is not any specific way to register for a sole proprietorship. A current account needs to be opened with any bank. But the following has to be maintained. Depending on the type of business, a sole proprietorship can be classified under service provider or product dealer.
- In case the business deals in providing services such as online consultancy, website development, digital marketing, ecommerce, etc. In such cases, to open a current account, service tax certification and chartered accountant certification regarding nature of business are required.
- If the business deals in product selling, such as ecommerce websites, import, export, selling on ecommerce sites. The business needs shop act license or trade license and VAT or sales tax registration.
For all registration, help from a CA is most preferred.
And time taken for registration is about 10-15 days with the registration