Starting an online shop for selling jewelry
m
(Querist) 22 December 2013
This query is : Resolved
Hello
I am planning to start an immitation jewelery shop on websites like ebay. Will this require any legal procedure. I have decided on a name for my jewelery collection. Will this require any kind of registration. How do I make sure that this name is already not in use. I do not want to register it as a brand name or copyright it. It is a small business at this stage. May think of registering it as a brand in future,
Please advise on any legal procedure for starting a jewellery shop online
Thanking in advance
ajay sethi
(Expert) 22 December 2013
you want to start business as sole proprietor or as firm or as compnay ?
if it is partnership firm it has to be registered with registrar of firm .
if it is a compnay then you have to register company with Registrar of companies . the name of company should not resemble another company in existence .
you have to prepare the memornadum AND ARTICLES OF ASSOCIATION OF COMPANY .
m
(Querist) 22 December 2013
It is a sole proprietor ship. Will there be a registration requirement. How do I check for name availability in this case
malipeddi jaggarao
(Expert) 23 December 2013
Since you wish to start a small business, initially it is better to opt for a Sole Proprietorship concern. The procedure is simple. Please read the following.
A sole proprietorship is a business owned by a single individual. This is the most basic and common form of business.The individual who owns the business is called Proprietor and hence the name Proprietorship Concern. In the eyes of law, the Proprietor and the proprietorship business is a single entity and they donot differentiate between both of them. This means that all the assets, liabilities, profit, loss etc. of the business are property of the proprietor and they are also taxed at individual rates instead of business rates. This is also the reason why proprietorship businesses donot have a separate PAN card for them and the PAN card of the Proprietor is used for any tax related purposes.
Typically, proprietorship business donot require any registration with any authorities in India to come to existence. There is no naming guidelines specified for the new business. Since this doesnot require any registration, the proprietor is FREE to select and start a business in any name. You should although make sure that you are not infringing on any trademarked, copyrighted or patented name or word. But if the chosen name is a trademarked or copyrighted word, then the concerned company may have objections for the same and they may proceed with a trademark or copyright suit against you. There is no tested way to know whether your selected name runs this or not.
The following are the requirements for starting a proprietorship concern.
Although a proprietorship concern does not require any registration, all specific business licenses are required to be obtained depending on their applicability.
Advantages of Proprietorship Business
Completely controlled, managed and owned by a single person with all authority, responsibility and risks
Can hire employees to facilitate running of business
All profits/ loss are retained by owner. No sharing of profits involved
Easy to start and Easy to close. Requires no legal formality/ registration to start. Similarly, business can be closed whenever the owner decides, no legal approvals required
Can open a separate bank account in the name of the business
Can apply and obtain for trademarks, patents, copyrights and other IP assets
Free to do any business at any point of time as there is no scope document which limits or restrict you to a specific set of businesses
Fewer compliances requirements.
Disadvantages of Proprietorship Business
All the investment is made by the owner either through personal resources or loans/ funding
Typically associated with businesses having lower capital requirement
Not a separate legal entity. The Owner and the business is treated as 1 in the eyes of law
Business ends with death of owner and cannot be continued further
Unlimited Liability associated with business. Any liability that business has is also the liability of the owner.
Difficulties in opening Bank account
Opening a Bank account for Proprietorship Business
Although Proprietorship business is easy to start and easy to close and doesnot require any specific registration to start a business, they have been facing challenges from bankers to open a suitable current account in the name of the business. As per new guidelines issued by RBI under the KYC (Know your customer) norms, any banker opening a current account for Proprietorship business should insist on minimum 2 registrations or licenses in the name of the business. This means that until you donot have minimum 2 different licenses to run your business, you may have lot of challenges opening a bank account in the name of the business.
Many times, small business may not require any licenses to conduct a business. You may continue to operate your business freely without need of any other specific licenses as long as you donot cross 10Lac turnover for the first time. But if you wish to open a bank account then you will need to produce 2 different set of licenses or registration e.g. VAT/CST tax and Shops & Establishments License or any other combination depending on your business activities.
Steps to Start a Proprietorship Business
Finalise a Business name
Obtain required licenses as applicable to your line of business - in your case it is jewelry business - you have to apply and obtain VAT & CST Registrations. They can be obtained by applying to the concerned Sales Tax Department in your place.
May require ID proof like PAN card etc.
May require Address proof e.g. Bank statements, Rental agreement etc.
Open a bank account.
All the best!
malipeddi jaggarao
(Expert) 23 December 2013
Since you wish to start a small business, initially it is better to opt for a Sole Proprietorship concern. The procedure is simple. Please read the following.
A sole proprietorship is a business owned by a single individual. This is the most basic and common form of business.The individual who owns the business is called Proprietor and hence the name Proprietorship Concern. In the eyes of law, the Proprietor and the proprietorship business is a single entity and they donot differentiate between both of them. This means that all the assets, liabilities, profit, loss etc. of the business are property of the proprietor and they are also taxed at individual rates instead of business rates. This is also the reason why proprietorship businesses donot have a separate PAN card for them and the PAN card of the Proprietor is used for any tax related purposes.
Typically, proprietorship business donot require any registration with any authorities in India to come to existence. There is no naming guidelines specified for the new business. Since this doesnot require any registration, the proprietor is FREE to select and start a business in any name. You should although make sure that you are not infringing on any trademarked, copyrighted or patented name or word. But if the chosen name is a trademarked or copyrighted word, then the concerned company may have objections for the same and they may proceed with a trademark or copyright suit against you. There is no tested way to know whether your selected name runs this or not.
The following are the requirements for starting a proprietorship concern.
Although a proprietorship concern does not require any registration, all specific business licenses are required to be obtained depending on their applicability.
Advantages of Proprietorship Business
Completely controlled, managed and owned by a single person with all authority, responsibility and risks
Can hire employees to facilitate running of business
All profits/ loss are retained by owner. No sharing of profits involved
Easy to start and Easy to close. Requires no legal formality/ registration to start. Similarly, business can be closed whenever the owner decides, no legal approvals required
Can open a separate bank account in the name of the business
Can apply and obtain for trademarks, patents, copyrights and other IP assets
Free to do any business at any point of time as there is no scope document which limits or restrict you to a specific set of businesses
Fewer compliances requirements
Disadvantages of Proprietorship Business
All the investment is made by the owner either through personal resources or loans/ funding
Typically associated with businesses having lower capital requirement
Not a separate legal entity. The Owner and the business is treated as 1 in the eyes of law
Business ends with death of owner and cannot be continued further
Unlimited Liability associated with business. Any liability that business has is also the liability of the owner.
Difficulties in opening Bank account
Opening a Bank account for Proprietorship Business
Although Proprietorship business is easy to start and easy to close and doesnot require any specific registration to start a business, they have been facing challenges from bankers to open a suitable current account in the name of the business. As per new guidelines issued by RBI under the KYC (Know your customer) norms, any banker opening a current account for Proprietorship business should insist on minimum 2 registrations or licenses in the name of the business. This means that until you donot have minimum 2 different licenses to run your business, you may have lot of challenges opening a bank account in the name of the business.
Many times, small business may not require any licenses to conduct a business. You may continue to operate your business freely without need of any other specific licenses as long as you donot cross 10Lac turnover for the first time. But if you wish to open a bank account then you will need to produce 2 different set of licenses or registration e.g. VAT/CST tax and Shops & Establishments License or any other combination depending on your business activities.
Steps to Start a Proprietorship Business
Finalise a Business name
Obtain required licenses as applicable to your line of business - in your case it is jewelry business - you have to apply and obtain VAT & CST Registrations. They can be obtained by applying to the concerned Sales Tax Department in your place.
May require ID proof like PAN card etc.
May require Address proof e.g. Bank statements, Rental agreement etc.
Open a bank account.
All the best.
Amritesh Mishra
(Expert) 24 December 2013
take vat registration first. If you provide services as well e.g. making ornaments with gold, will require to be registered with service tax department, if your turnover exceeds 9 lakhs
Rajendra K Goyal
(Expert) 26 December 2013
Registration of name and style of the business, taking VAT license are the basic requirements.
