What legal prerequisites, permissions, delivery licenses and govt approvals are required for crowd source delivery in India?

<p>the platform connects travelers and senders and travelers can carry stuff for senders to the required destination for a fee (as of now domestic travelers only)-this is crowdsource delivery What are the legal prerequisites/permissions/delivery licenses/govt approvals needed for something like this?</p>

Answer (1)

Team Legistify

  • Sector-1, Noida


Business conducted over the internet is called e-commerce. In recent years, e-commerce or m-commerce or mobile-commerce business conducted through smart phones has a very popular. There are two main modes to start a e-commerce business, a proprietary e-commerce website or joining an established marketplace like flipkart, amazon, paytm, etc.

Legal formalities to start an e-commerce business are as follows:

1. Comapny or LLP Registration- While starting an e-commerce business it is good to have a Company or LLP to have limited liability protection and improve the ease of doing business. Having a company or LLP would ensure that opening bank accounts in the name of business or obtaining VAT Registration are easy and fast. In case the promoters wish to start a proprietary e-commerce website, then it is best to start a company, as it allows for funding for the successful e-commerce business.

2. VAT Registration- A VAT Registration is a must for becoming a seller on a e-commerce portal or while a proprietary e-commerce website. VAT Registration is required for anyone selling goods or products in India and must obatin from the State's Sales Tax Department.

3. Bank Account- Once the Company or LLP is incorporated, a bank account can easily be opened in the name of the business by contacting a Bank.Opening of bank account is essential for an e-commerce business to obatin payment gateway for a proprietary e-commerce website.

4. Payment Gateway- A payment gateway would be required for a proprietary e-commerce website to process customer payment. Payment gateway provides allow for the website to accept credit card, debit card, net banking, internet banking payments from multiple banks or credit card companies. In case selling through online marketplaces, the marketplace will recieve the payments through their payment gateway to the bank accounts of the seller directly, hence a payment gateway is not required and only a bank account will do.

5. Legal Documents- While selling online, it is important to protect that the business and the promoters of the business through proper use of the terms and conditions document and privacy policy. In the case of proprietary e-commerce website, the policy would have to be drafted by the bussiness based on the nature of its activities and products sold online. If the business sells through online marketplaces, then the legal document or sellers agreement is provided by the marketplace and the seller must abide by the sellers agreement. It is important for any business to read the sellers agreement before agreeing to the document.

Answered on 28 Sep 2018

Was this answer helpful?

Yes   No

Didn't find the answer you are looking for?

Talk to experienced lawyer online and get your answered in minutes.