Starting e-commerce business with partnership is more suitable for e-commerce than sole proprietorship. It is a form of business where more than one individual is the owner. They share management as well as profits and loss.
The features of Partnership are:
- Not a separate legal entity
- Unlimited liability
- Minimum 2 and maximum 50 individuals can make a partnership
- Partners are mutual agents
- Oral or written agreement
- A partnership deed has to be made and maintained
The advantages a partnership enjoys are listed below: (more…)
A private limited company is a type of company which allows limited liability to its share holders. Pvt ltd co is the most popular form of business for an e-commerce model.
If we consider other forms of business we will vividly understand why a pvt limited is most favorable.
- Limited liability: If a person has a proprietorship, being the owner, he enjoys all profits and suffers all losses and in case of any default in loan payment, his personal assets can be sold by the bank to repay the loan. Same goes for a partnership form of business. It is only in a pvt ltd, that the shareholder pays nothing.
- Existence: a business is the result of our hard work and dedication. Shareholders are mortals, they have an expiry date. With a proprietor’s death, his company dies too, as the proprietor and business are same in the eyes of law. Same happens with a partnership. In case of a pvt ltd company, the death of a shareholder doesn’t culminate in the shutting of the company. It enjoys immortality in the eyes of law.
- Transferability of shares: in a partnership, the partner’s ratio of share capital decides their profits and losses. A partner cannot transfer his shares, as it is not allowed. But in a pvt ltd company, a shareholder can sell his shares at any time. But, he must approach his fellow shareholders first, provided they deny, he can sell them to a new shareholder. This ensures the longevity of the company.
- Raising investment capital: an increased capital investment helps a business very much. But neither a proprietorship, nor a partnership can pool in investment after its incorporation from people other than themselves. It is only a pvt ltd that allows creating new shares and selling them to increase its capital investment. It is a great opportunity to gather capital. Making pvt ltd most desirable.
To register as a pvt ltd co, the following documents need to be submitted with the registrar. (more…)
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: (more…)
Startup India is a scheme launched by Shri Narendra Modi, Prime Minister of India on January, 2016. Under this scheme startups would be given certain benefits and exemptions for operations.
Which businesses are termed STARTUP under this scheme?
All businesses cannot be called startups and must fulfill certain criteria to be termed one.
- It must be registered as a private limited/ LLP/ partnership.
- It must not be older than 5 years on the date on application.
- The business should have a turnover of less than Rs. 25 crore.
- Startup must work towards innovation, development of new products, processes or services with technology or intellectual property.
- Certificate from Inter-Ministerial Board is essential to get 3 year tax exemption.
- Letter of recommendation for innovative nature of business from incubators.
What benefits and exemptions do the startups get? (more…)