2. STRUCTURE OF ONLINE
BUSINESS ENTITY
STEP 1: User Registration
Register yourself on the website of Ministry of
Corporate Affairs, developed for LLP services, i.e.
www.llp.gov.in. Click on “Register” tab on top
right hand corner of the page.
Fill in the registration form. Fields marked in the
form are to be mandatorily filled. Select your user
name and password.
On successful registration, system will give a
message that you have been registered
successfully.
Prof. Vikram Tyagi 2
3. STRUCTURE OF ONLINE
BUSINESS ENTITY
STEP 2- Obtain Designated Partners
Identification Number (DPIN)
All designated partners of the proposed LLP shall
obtain “Designated Partner Identification Number
(DPIN) / Director Identification Number (DIN)”.
DPIN/DIN may be applied from:
http://www.mca.gov.in/MCA21/Din.html
Prof. Vikram Tyagi 3
4. STRUCTURE OF ONLINE
BUSINESS ENTITY
STEP 3- Digital Signature Certificate(DSC)
Partner/Designated partner of LLP/proposed LLP,
whose signatures are to be affixed on the e-forms
has to obtain class 2 or class 3 Digital Signature
Certificate (DSC) from any authorized certifying
agency, details of which are available on the home
page of the LLP portal under the tab “Certifying
Authorities”.
Prof. Vikram Tyagi 4
5. STRUCTURE OF ONLINE
BUSINESS ENTITY
STEP 4- Reservation of Name
Log on to the LLP portal by clicking the “log in” tab on the top
right corner of the homepage and enter your username and
password. After login, click “E-Forms” link.
Open Form-1 for reservation of name and fill in the details. Select
name of the proposed LLP (up to 6 choices can be indicated).
Any partner or designated partner in the proposed LLP may
submit Form-1.
Append digital signatures and submit the e-form
Pay the necessary fee by credit card (master/visa).
Free name search facility (of existing companies/LLPs) is
available on MCA portal
(http://www.mca.gov.in/DCAPortalWeb/dca/DetailsQueryName
.do ).The system will provide the list of similar/closely
resembling names of existing companies/LLPs based on the
search criteria filled up.
Prof. Vikram Tyagi 5
6. BUSINESS
ENTITYSTRUCTURE OF
ONLINE BUSINESS ENTITY
STEP 5- Incorporation of LLP
Once the name is reserved by the Registrar, log on to the portal
and fill up Form-2 “Incorporation Document and Statement”.
Pay the prescribed registration fee as per the slab given in
Annexure A of the LLP Rules, 2009, based on the total monetary
value of contribution of partners in the proposed LLP.
Statement in the e-form is to be digitally signed by a person
named in the incorporation document as a designated partner
having permanent DPIN and also to be digitally signed by an
advocate/company secretary/chartered accountant/cost
accountant in practice and engaged in the formation of LLP.
On submission of complete documents the Registrar after
satisfying himself about compliance with relevant provisions of
the LLP Act will register the LLP, maximum within 14 days of
filing of Form-2 and will issue a certificate of incorporation in
Form-16. You can check status of your application online.
Prof. Vikram Tyagi 6
7. STRUCTURE OF ONLINE
BUSINESS ENTITY
STEP 6- Filing of LLP agreement (Form-3)
and Partners’ details (Form-4)
Form 3 (Information with regard to LLP agreement
and changes, if any made therein) and Form-4
(Notice of Appointment of Partner/ Designate
Partner, his consent etc.) may be filed with the
prescribed fee simultaneously at the time of filing
Form-2 or within 30 days of the date of
incorporation or within 30 days of such
subsequent changes.
STEP 7- Open a current Account with a Bank
STEP 8- Obtain Permanent Account Number
PAN/BIN for the entity.
Prof. Vikram Tyagi 7
8. Other Business Registrations for
online Business entity
The major legal issues for online business entity can
be divided into spheres- one that deals with labor
issues and other that deals under the head of tax
registrations.
2.1 LABOUR ISSUES
Information Technology has brought in sea change as to
the definition of workplace.
Work Place is not bound to be an office or factory any
more. In fact more and more people are working from
their homes and the new giants are being raised in family
Garages. The internet has changed the boundaries of
workplace too. You are no longer bounded to one city or
state or even a nation.
In this regard it becomes increasingly difficult to apply
settled legal provisions.
Prof. Vikram Tyagi 8
9. Other Business Registrations for
online Business entity
IT and ITES companies are registered as Public Utility
Services by various State Governments. This sector has
had exemption from some of the labor law provisions.
The exemptions were up to March,2012. However, after
huge protests they are restored in September 2012 and
extended up to 2013. However, sooner or later they will
come into force.
Ecommerce websites are also vulnerable to labor issues
and consequently to the labor laws. All aspects of
employee-employer relationships come under the
purview of labor laws. The very nature of IT/ITES sector
demands that it functions 24x7x365. This very nature of
sector is in contravention with settled provisions of
labor laws where employees have defined work place,
timings and defined working hours.
Prof. Vikram Tyagi 9
10. Other Business Regulations for
online Business entity
Recently, various IT/ITES companies got notices from
various state governments for deploying women
workforce for night shifts which violation of normal
work force laws.
Ideally IT/ITES sector should demand continuation of
exemption granted to them or should seek review of
archaic labor laws of this nation.
Labor law is a vast subject but for the purpose of
ecommerce website we shall focus only on two aspects:
First one is concept of virtual workplace and its affinity
with the Industrial Disputes Act, 1947 and Industrial
Stand orders Act, 1946 and,
The second one is online shops, and Shops and
Establishments Act.
Prof. Vikram Tyagi 10
11. Other Business Regulations for
online Business entity
2.2 Online shops:
E-commerce webs stores are available 24/7/365. You
can shop anytime you like. But we need to understand
the basic function that it discharges is of a shop where
products are bought and sold.
In India, shops are regulated under an Act called “The
Shops and Establishments Act, 1953”.
This Act is not a central legislation and each state has
enacted a separate act. Each State Act certain common
features with minor variations.
Here we shall be discussing this Act on the basis of Delhi
Shop and Establishment Act, 1954.
Prof. Vikram Tyagi 11
12. Other Business Regulations for
online Business entity
Objective:
The objective of the Delhi Shop and Establishment Act,
1954. is to regulate the working and employment
conditions of worker employed in shops and
establishments including commercial establishments.
The Act provides for fixation of working hours, rest
intervals, overtime, holidays, leave, termination of
service, maintenance of shops and establishments and
other rights and obligations of the employers and
employees.
Scope: This Act covers all persons employed in an
establishment with or without wages, except the
members of employer’s family.
Prof. Vikram Tyagi 12
13. Other Business Regulations
for online Business entity
Definitions:
Off late many IT/ITES companies are getting notices for not
getting registered under the Act. Let us examine some
definition under the Act and see e-commerce stores fall under
this category or not.
s.2(5) "commercial establishment" means any premises
wherein any trade, business or profession or any work in
connection with, or incidental or ancillary thereto, is carried on
and includes a society registered under the Societies
registration Act 1860 (XXI of 1860) and charitable or other
trust, whether registered or not, which carries on any business,
trade or profession or work in connection with or incidental or
ancillary thereto, journalistic and printing establishments,
contractors and auditors establishments quarries, and mines
not governed by the Mines Act, 1952 (XXXV of 1952),
Prof. Vikram Tyagi 13
14. Other Business Regulations
for online Business entity
educational or other institution run for private gain and
premises in which business of banking, insurance, stocks and
shares, brokerage or produce exchange is carried on, but does
not include a shop or a factory registered under the Factories
Act, 1948 (LXIII of 1948), or theatres, cinemas, restaurants,
eating houses, residential hotels, clubs or other places of public
amusement or entertainment;”
If we examine above definition of “commercial
establishment” then websites if they are having
physical store or godowns then they can fall under
this category. However, whether online share
broking sites like icicidirect.com, ebay and other
online business operations will fall under this
category is doubtful.
Prof. Vikram Tyagi 14
15. Other Business Regulations
for online Business entity
s.2(9)"establishment" means a shop, a commercial
establishment, residential hotel, restaurant, eating house,
theatre or other places of public amusement or entertainment
to which this Act applies and includes such other
establishments as Government may, by notification in the
Official Gazette, declare to be an establishment for the
purposes of this Act;
s.2(25) "retail trade or business" includes the business of a
barber or hair-dresser, the sale of refreshment of intoxicating
liquors, and retail sales by auction;
Under this definition sites like ebay in which do
conduct sell by auction will come under the
purview.
Prof. Vikram Tyagi 15
16. Other Business Regulations
for online Business entity
2 (27) "shop" means any premises where goods are sold, either
by retail or wholesale or where services are rendered to
customers, and includes an office, a store-room, godown,
warehouse or workhouse or work place, whether in the same
premises or otherwise, used in or in connection with such trade
or business but does not include a factory or commercial
establishment
This definition lays emphasis on term “any premises”
which means even virtual workplace is included in it.
Thus, all online business activity can fit into one of the
terms and it is recommended that online business
entities must register themselves under this Act in the
respective States where they are located or if
incorporated where there registered office is.
Prof. Vikram Tyagi 16
17. Other Business Regulations
for online Business entity
Main provisions
The main provisions of the Act are:
Compulsory registration of shop/establishment within
30 days of commencement of work.
15 days prior notice before closing down
shop/establishment
Number of working hours per day and week
Various guidelines providing for rest interval. Opening
closing hours, holidays etc.,
Rules for employment of children, young persons and
women
Leave rules
Prof. Vikram Tyagi 17
18. Other Business Regulations
for online Business entity
Rules for termination of services
Maintenance of register and records
Obligation for employers and employees
Registration of an establishment:
Now the registration of the Shop and Establishment can be done
online also. For this we shall use the example of Delhi Shop and
Establishment Act, 1954. However the following points should be
remembered:
The application for registration of an establishment can be
accepted only after commencement of business.
It is only registration certificate and not license. This certificate
does not confer any legality on the structure on which
shop/establishment is located.
Prof. Vikram Tyagi 18
19. Other Business Regulations
for online Business entity
Process for online Registration in Delhi NCT
Step 1: Visit the website
http://www.labour.delhigovt.nic.in/ser/index.html
Step2: Fill the form ‘A’ online
Step 3: Input all the details
Step4: Click ‘yes’ on dialogue box that appears
Step5: Form ‘C’ your certificate is ready and printable.
This is a self certification process.
No fees is required to be paid nor any verification is done
Prof. Vikram Tyagi 19
20. Other Business Regulations
for online Business entity
Penalty:
It requires shops, commercial shops, establishments, retain
trade and business premises to be registered.
The penalty for contravention of any provision of the Act and
rules made there under is fine which shall not be less than
Rs.25/- and which may extend to Rs.250/-.
However if a person is convicted for willfully making false
entries in any record, register or notice, he shall be liable for
imprisonment for a term not exceeding three months.
Prof. Vikram Tyagi 20
21. Other Business Regulations
for online Business entity
Industrial Disputes Act:
The Industrial Disputes Act, 1947 is the mother legislation
governing labor laws in India. Broad and generic definition of
the term ‘industry’ is given under this Act is wide enough to
cover IT/ITES and e-commerce websites.
The definition of defines industry under the Act means, “any
business, trade, undertaking, manufacture or calling of
employers and includes any calling, service, employment,
handicraft, or industrial occupation or a vocation of workmen”.
If we apply this definition then all online business activities will
fall under the purview of this Act and consequently all the
consequences under the Act. It is to be noted that The
Industrial Disputes Act applies only to workmen
Prof. Vikram Tyagi 21
22. Other Business Regulations
for online Business entity
The definition of workman given under s. 2(s) the Act means,
“any person (including an apprentice) employed in any industry
to do any manual, unskilled, skilled, technical, operational,
clerical or supervisory work for hire or reward, whether the
terms of employment be express or implied, and for the
purposes of any proceedings under this Act in relation to an
industrial dispute, includes any such person who has been
dismissed, discharged or retrenched in connection with, or as a
consequence of, that dispute, or whose dismissal, discharge or
retrenchment has led to that dispute.
The definition of workmen does not include any person who is
employed mainly in a managerial or administrative capacity or
who being employed in a supervisory capacity, draws wages
exceeding ten thousand rupees per month or exercises, either
by the nature of the duties attached to the office or by reason
of the powers vested in him, functions mainly of a managerial
nature”
Prof. Vikram Tyagi 22
23. Other Business Regulations
for online Business entity
Thus, under this definition people working even for
online business entities can fall under this definition of
workman and if the online business entity fulfills the
qualifications of the definition of industry they are liable
for all the applicable consequences under the ID Act,
1947.
The simplest escape route for IT/ITES companies is to
draft their employment terms and conditions in such a
way that they remain out of purview of the same. The
easiest way is to keep employees salaries above Rs.
10,000/-pm
Prof. Vikram Tyagi 23
24. Other Business Regulations
for online Business entity
Industrial Employment (Standing Orders)
Act, 1946 :
This archaic labor statute has been made applicable to some
Indian States and sooner later it seems to be made applicable
to other states. Recently it was made applicable to IT/ITES
companies after enjoying exemption for over Eleven Years.
However due to protest it has temporarily been suspended till
March, 2013. It seems sooner or later other states will follow
the route and like any other industry ITES/ software or
ecommerce establishments will have to follow this central
legislation.
This Act requires employer to define uniform conditions of
employment under them. This Act is applicable to ‘industrial
establishments employing a minimum of 100 workmen. Some
states like Maharashtra and Karnataka has lowered the
requirement to 50 or more employees.
Prof. Vikram Tyagi 24
25. Other Business Regulations
for online Business entity
The relevant portion of ‘industrial establishment’ for
IT/ITES/ E-commerce website would be some clause
(ix). The wordings of which are Industrial
Establishments means “workshop or other
establishment in which articles are produced, adapted or
manufactured, with a view to their use, transport or
sale;”
Thus, all the IT/ITES companies where 50 (or 100
depending on location) or more employees are there are
required to comply with the provisions of the Standing
Orders Act.
Prof. Vikram Tyagi 25
26. Other Business Regulations
for online Business entity
The companies have to draft these Standing orders
in the model format provided under the Act and
have them certified by the labor department.
It is to be noted that these orders can be modified
or amended only with the specific consent of the
labour department and the employees and/or their
representatives.
It is to be noted that these model code of conduct
is in addition to employees hand book and code of
conduct. Further the employee’s handbook and
code of conduct cannot be in conflict with the
model standing order.
Prof. Vikram Tyagi 26
27. Other Business Regulations
for online Business entity
Registration for sale of goods and services
There are two types of taxes that we are concerned with
ecommerce websites.
One is called CST or Central Sales Tax and another is
Value added Tax (or VAT).
Value Added tax is imposed upon on sale/purchase of
transactions taking place within the State. Each State
has its own VAT Law. While CST is tax applicable on
transaction between various states.
CST is governed by Central Sales Tax, 1956. We shall
look into legal provisions of VAT based upon Delhi VAT.
All dealers with turnover above Rs 10 lacs have to
mandatorily register while those less than 10 lacs can
voluntarily register.
Prof. Vikram Tyagi 27
28. Other Business Regulations
for online Business entity
For Registration under Delhi VAT Act, Form No 4 available
at:
http://delhi.gov.in/DoIT/TradeAndTaxes/Forms/DVAT
Forms/Form 4.pdf (accessed on 2-11-2012) is required. Along with
this form following mandatory documents are required:
Proof of incorporation of the applicant dealer i.e. Copy of deed of
constitution (partnership deed (if any), certificate of registration
under the Societies Act, Trust deed, Memorandum and Articles of
Association etc) duly certified by the authorised signatory.
PAN card of legal entity
In case of company list of directors along with address and identity
proof, like copy of passport etc
2 photographs of each directors
Copy of Board Resolution in favor of authorized signatory
Copy of PAN card and address proof of authorized signatory along
with 2 photographs
Prof. Vikram Tyagi 28
29. Other Business Regulations
for online Business entity
Copy of address proof in respect of principal in Delhi
Copy of first sales / purchase bills
Copy of bank statement
Bank Pay in Slip, one cancelled cheque
Surety in form of registered dealer / security in form of
Bank Guarantee a sum of Rs. 1 lac. This will be deed of
guarantee on Stamp Paper of value Rs 100/-
Two self addressed envelopes (Without stamps)
This surety amount of Rs 1 lac can be lowered by
submitting following optional documents. The maximum
amount of rebate is Rs 50,000/-
Prof. Vikram Tyagi 29
30. Other Business Regulations
for online Business entity
CST -Central Sales Tax Registration
The dealer must make an application to the concerned authority
in the appropriate state, in Form A (available at
http://comtax.cg.nic.in/comtax/forms/cstform1.pdf accessed on
2/11/12) within 30 days of the day when he becomes liable to
pay tax. The form contains the following details.
Details :
Name of the manager of business
Name and addresses of proprietor or partner of the
business.
Date of establishment of business.
Date on which first inter-state sale was made.
Name of the Principal place and other places of
business in the appropriate state
Particulars of any license held by the dealer.
Prof. Vikram Tyagi 30
31. Other Business Regulations
for online Business entity
Single Place of business –
If a dealer has single place of business in the
appropriate State and he is registered in that state, he
shall apply to the sales tax authority of that state only
for obtaining registration under central sales tax Act.
If a dealer has more than one place of business in the
same state , he shall select one of these places as the
principal place of business and , get only one certificate
of registration.
More than one place of business in different states. If a
dealer has more than one place of Business in different
states, he will get a separate certificate of registration
with respect to each state.
Prof. Vikram Tyagi 31
32. Other Business Regulations
for online Business entity
Fees for Registration is Rupees twenty five to be paid in
cash or court fee stamp.
The application has to be signed by, in case of -
Sole proprietorship , the proprietor
Partnership firm, any one the partner
HUF, the karta
Company, the director
Government, authorized officer
The CST and VAT Numbers are to be displayed on the
invoice. Further the dealer/ecommerce website in the
invoice must stamp and write that the provisions of
VAT/CST are complied with.
Prof. Vikram Tyagi 32
33. STRUCTURE OF E-STORE
LEGAL ISSUES
The following steps shall be required to get
your own e-store ready and operational:
1-Booking domain name:
The first step to establish your online presence is via booking
your domain name. The domain name is your unique address on
the Internet and must be selected with great care and prudence.
In the cyber world disputes over domain name are increasingly
on rise. A domain name on worldwide web consists of two levels
for example in www.charumathur.com the domain name
charumathur.com has two part- charumathur and .com. The
“.com” is called generic top level domain (gTLD) and
“charumathur” is considered as a second level domain name. The
ccTLD are administered by ICAAN. Apart from these domain
names we come across web addresses as
www.charumathur.co.in ..
Prof. Vikram Tyagi 33
34. STRUCTURE OF E-STORE
LEGAL ISSUES
In this “charumathur” remains second level domain name
while “co.in” is called country code generic top level domain, .
Registrars help individuals and organizations register a
domain name that has an extension like .com, .org, .net, .info,
.biz, .us, .mobi, .name, .pro, .tv, etc
A domain name can be registered by paying a nominal fee. It
is to be noted that nobody owns a domain name a domain-
name holder is merely a licensee who has a right to use it the
license expires and thereafter it is to be renewed or after
expiry of grace period it becomes available in public pool.
Prof. Vikram Tyagi 34
35. STRUCTURE OF E-STORE
LEGAL ISSUES
Registering domain name is matter of few clicks, in this simple
procedure you visit registrar site where you enter the name of
domain that you want to register, if it is available you have to
punch in few details and pay the requisite fees and your domain
name is registered.
To register a domain name WHOIS search is conducted to ensure
that name is not taken.
To avoid legal hassles it is strongly recommended that one
must conduct trademark search to verify that the chosen
domain name is not infringing on another party's trademark.
Trademarks in India can be searched at
http://164.100.176.38/tmrpublicsearch/frmmain.aspx and
in US it can be searched at
http://tess2.uspto.gov/bin/gate.exe?f=tess&state=4006:q
velk4.1.1
http://www.networksolutions.com/whois/index.isp
Prof. Vikram Tyagi 35
36. STRUCTURE OF E-STORE
LEGAL ISSUES
2-Sign up for Web Hosting:
The next important step is to sign up for web hosting. Some
registrar of domain names provides for web hosting. However, you
can sign up with other.
The Webhost must be selected with great prudence. It is important
as you would like to have your e-commerce website to be fast and
trustworthy. It should not crash as traffic increases to your site.
Later when you become big brand like facebook.com, amazon.com
you can have your own server farms.
If you are on lean budget and have less fancy stuff to project you
can even opt for free webhost otherwise if you are ready to spend
must use some reliable webhost.
Secondly, the webhost agreement should be dealt with carefully.
Try and get “Terms of services” negotiated on pricing, backups etc,
Ensure that your webhost provides you with 24/7 data centre
support and should have all the essential firewalls and security
system in place.
Prof. Vikram Tyagi 36
37. STRUCTURE OF E-STORE
LEGAL ISSUES
3-Developing Sources of Supply:
This would require screening, approving reliable vendors
and signing agreement with them to supply products at per
terms and conditions offered to with the buyers.
4-Preparing Product Catalogue:
The next important aspect is to prepare the catalogue of products
that you intend to sell on your e-store.
Your inventory should have “SKU” code. SKU is stock keeping Unit
which will allow you to track product for inventory purposes.
Each type of product has to click and needs to provide with
complete description.
Here it is important to disclose to the prospective consumer the
complete and true picture of the product.
Provide your consumers with zooming facility also. Here, issues like
privacy and whether you are bonafide dealer or a particular product
or not are issues which may prop up.
Prof. Vikram Tyagi
37
38. STRUCTURE OF E-STORE
LEGAL ISSUES
5-Shopping Cart:
Once the product is selected it goes into shopping cart or
basket. There after you can check out after making or
assuring payments. In early 2000-01 there was ugly patent
war in respect of the shopping cart by amazon.com which
developed one click technology and divine inc’s shopping
cart.
Today these are settled issues. There are many eCommerce
software companies which provide these cart from free or
cost to Rs 10,000/- Some of popular shopping carts in
Indian market are shopify, Big Commerce, Mjack etc.
At the time of checkout ensure that valid coupon codes can
be applied, various applicable taxes are deducted and
invoice generated should depict it.
Prof. Vikram Tyagi 38
39. STRUCTURE OF E-STORE
LEGAL ISSUES
6-Payment Gateways:
The next most important crucial step is set up payment
gateways. Payment Gateways are crux of e-commerce. Indian
e-commerce scene is quite unique where large number of Cash-
on-Delivery (COD) transactions takes place.
The other options available are via credit/debit cards. National
Electronic Fund Transfer (NEFT), ECS (Electronic Clearance
System), cash cards.
However what is important is to keep on checking new
guidelines coming from Reserve Bank of India
(www.rbi.gov.in).
It is important to note that as per RBI directives it is mandatory
to be registered Indian entity and this registered entity is
required to have an account with Indian Bank for integration
with any Indian Payment Gateway.
PayPal operations are under suspension in India.
Prof. Vikram Tyagi 39
40. STRUCTURE OF E-STORE
LEGAL ISSUES
RBI vide notification dated 18th Feb 2009 has come out with
security issues and risk mitigation measures (available at
http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=4844&Mo
de=0 accessed on 31-10-2012).
Under this notification system of ‘online alerts’ have been put in
place. All transactions above Rs 5,000/- are alerted.
Thus, apart from physical and data center security (where the
Payment Gateway Servers are hosted), OS and Application security,
Firewall and Intrusion Detection Systems at the OS and Application
layer, Database security, and finally Transaction security are to be
provided.
When you are setting your ecommerce store ensure that you
choose a Payment Gateway which offers you advanced Fraud
Detection tools apart from mere AVS and CVV2. RBI Notification on
additional security for credit-card transactions has mandated
additional authentication/validation for all VISA and Master card
transactions using Verified by Visa and Mastercard SecureCode.
Prof. Vikram Tyagi 40
41. STRUCTURE OF E-STORE
LEGAL ISSUES
7-Types of Payment Gateways in India:
In India Payment gateways are offered by Banks as well
as by third party service providers who tie-up with
banks to provide payment Gateways.
Banks: The Banks are popular Payment Gateway in
India. The merchant side division of the Bank provides
the facility of payment gateways to businesses. This
facilty allows businesses to accept secure online
payments. Some of most the popular Payment Gateways
in India from banks are Payseal by ICICI Bank and HDFC
Payment Gateway.
Third Party: There are various players in this category.
Notable ones are: Paypal / Google Checkout / Wirecard
/ Moneybookers
Prof. Vikram Tyagi 41
42. STRUCTURE OF E-STORE
LEGAL ISSUES
CCAvenue, DirecPay. Paypal is suspended in India
currently. The reason being it does not convert in
Indian currency and is only credit card based.
As per CCAvenue it’s payment gateway solution
offers eMerchants with real time, multi-currency,
multiple payment options online payment
processing services including all types of credit-
card processing through multiple banks and card
associations, debit-card processing, direct debit to
bank accounts.
Prof. Vikram Tyagi 42
43. STRUCTURE OF E-STORE
LEGAL ISSUES
8-Documentation for Payment Gateways:
To set up Payment gateway considerable about of documentation
from legal and technical aspect is required. From technical aspect
bank has to ensure that it supports merchant’s infrastructure. From
the legal point of view following documents are required in hard copy.
These documents are required to be signed and stamped. The required
documents are:
Board Resolution (On company Letter Head)
Director List (On Company Letter Head)
Director/ Partner/ Onwer PAN Card.
Director / Partner / Proprietor Address Proof
Company Profile (On Company Letter Head )
Last 3 Month Bank Statement (Mandatory)
Last 2 Years Financial with Auditor Report, Balance Sheet/Profit &
Loss A/c of Company / Partner's/ Proprietor (Any one/ Mandatory )
Business Pan Card.
Prof. Vikram Tyagi 43
44. STRUCTURE OF E-STORE
LEGAL ISSUES
Passport size photo.
Memorandum of Association / Article of Association /
Partnership Deed.
Registration details (in case of Proprietorship firm)
Along with these, following documents may be required:
Detail Business Plan
Promoters Background
Staff strength and skill background
Provision/Projected Financial
Funding detail (own fund & Venture Capitalist)
Expansion plan
Existing processor (statements reflecting CR & CB)
% split region wise
% split plan wise
Prof. Vikram Tyagi 44
45. STRUCTURE OF E-STORE
LEGAL ISSUES
It is important to note that at the time of integrating
Payment Gateway the website should be live or its
Beta version is ready.
Cost Factors:
Considerable cost is involved in setting up Payment gateway. One
must remember that it is not necessary to have payment gateway as
soon as you start online business. You can accept payment via NEFT,
or you can ship products via VPP Value Payable Post - The cash on
delivery system by India Post. Since 2011, Government has
introduced eVPP whereby online payment is done.
Once your business gains momentum, you can then use the payment
gateways and shift to reputed courier service. One leading website
has provided with following table for comparative cost and features
of various payment gateways in India.
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46. STRUCTURE OF E-STORE
LEGAL ISSUES
Payment Gateway Comparisons
Source
http://techaloo.com/comparison-of-
pavment-gatewavs-in-india
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47. STRUCTURE OF E-STORE
LEGAL ISSUES
9-SSL Certificates: Ensure that your website has an secure
Socket layer (SSL) certificate. This SSL certificate secures websites
from third parties. With SSL in place third party cannot intercept
information transferred from your account to the server.
10-Shipping Account: Shipping the product is next step.
For this ecommerce website needs to have shipping account with
reputed courier service like DHL, First Flight, Aramex or start its
own delivery service like in the case of flipkart.com.
11-Packing/Shipping/ Outsourcing logistics
service provider : This juncture decides how your
ebusiness will prosper. The way a product is packed, labeled and
delivered makes the huge difference. Any deficiencies/ negligence
in packing/ shipping the product can make you liable on many
counts and you can even be dragged to consumer courts. Hence,
this section requires superior supervision and perfect logistics to
make your eventure a successful one.
Prof. Vikram Tyagi 47
48. STRUCTURE OF E-STORE
LEGAL ISSUES
12-Help Line and Live Chat etc: Get toll free
number from various online service providers or telecom
companies like BSNL, Bharti, and Reliance in India. Sign up and
pay small monthly fees. Its good idea to have live chat box and
facility to receive offline messages. Mailing newsletters and
SMSs are also good options to keep the consumers informed
about new products, deals etc.
13-Advertise: Advertise your ecommerce store on
various mediums including social media
In these simple steps your eStore is ready. As an advice
it is recommended that you must build a mobile friendly
shopping site. This is more relevant in Indian market as
everybody seems to be carrying mobile and the
penetration of handheld devices is far more than
Personal Computers penetration
Prof. Vikram Tyagi 48