Legal processes required to start e-commerce portal.


I would like to know all the legal details and processes required for starting e-commerce portal based business. Please let me know what all legal compliances need to be done?

Answers (1)


130 votes

Legal issues of e-commerce in India vary as per different business models. For instance, electronic trading of medical drugs in India requires more stringent e-commerce and legal compliances as compared to other e-commerce activities. Digital communication channels for drugs and healthcare products in India are scrutinised more aggressively than other e-commerce activities
Besides there are many legal formalities that are required in order to start a company and e-commerce activity in India. A business can be operated as:

(1) Sole Proprietorship.

(2) Partnership.

(3) Company – Public/Private.

(4) Limited Liability Partnerships (LLP).
In certain cases, compliance with labour laws is also required. For instance, the Shops and Establishment Act is a legislation implemented by various States in India. The Act lays down mutual statutory obligation and rights of employers and employees. Registration of shop/establishment is mandatory within 30 days of commencement of work. Other workmen and labour related legislations cover areas like employees provident fund, employees state insurance, etc.

However, e-commerce in India is also required to be conducted in a legally permissible manner. This is more so when the information technology act 2000 (IT Act 2000) prescribes stringent penal and pecuniary penalties for violation of its provisions during e-commerce transactions.

The legal requirements for undertaking e-commerce in India also involve compliance with other laws like contract law, Indian penal code, etc. Further, online shopping in India also involves compliance with the banking and financial norms applicable in India.


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