E-commerce has become one of the most popular and evolving ways to start a business in India. With increasing internet penetration and digital payment systems, more and more people are buying and selling products online. Whether you want to start a small online store, sell on platforms like Amazon or Flipkart, or launch a full-scale e-commerce website, there are some important legal requirements you must follow.

In this blog, we will explain and guide the key registrations and licenses you need to start an e-commerce business in India. We will also guide you through the process step-by-step in simple terms.

What is an E-commerce Business?

An e-commerce business is a type of business that involves buying and selling products or services over the internet. This includes:

• Selling through your own website (like myntra.com)
• Selling through online marketplaces (like Amazon, Flipkart, Meesho, etc.)
• Selling via social media (Facebook Marketplace, Instagram shops)
• Drop shipping businesses
• Subscription box services
• Digital goods or service-based platforms

Why Are Registrations and Licenses Important?

Starting an e-commerce business without proper registrations can lead to penalties, legal issues, or even the shutting down of operations. Having proper licenses helps build trust with customers, protects your business legally and allows you to access payment gateways, logistics partners, and various other services easily and smoothly.

Step-by-Step Registrations and Licenses Needed for an Ecommerce Business

1. Business Structure Registration

Before starting your e-commerce operations, you need to choose and register a legal business structure. You can choose from:

• Sole Proprietorship – For small businesses, it is easy to set up.
• Partnership Firm – For the purpose of businesses with two or more owners.
• Limited Liability Partnership (LLP) – Offers limited liability protection.
• Private Limited Company Registration – Suitable for growing startups looking to raise funds.
• One Person Company (OPC) – For solo entrepreneurs who want a company structure...!

Documents Required:

• PAN card of the owner.
• Aadhaar card.
• Address proof.
• Passport-size photo.
• Registered office address proof.

Registration is done through the official Ministry of Corporate Affairs (MCA) portal for companies and LLPs.

2. GST Registration

GST registration is mandatory if:

• You are selling goods or services online.
• You are selling across different states in India.
• You are selling on platforms like Amazon, Flipkart, etc. (even if your turnover is below ₹20 lakhs/₹40 lakhs).

Benefits:

• Helps claim input tax credit
• Necessary for operating on marketplaces
• Legal compliance

You can register for GST online through the GST portal.

3. Trade License (Shop and Establishment Act)

A trade license or Shop and Establishment registration is required by local municipal corporations to run a business legally.

Even if your business is run from home, some states require registration under this Act.

You can apply online or offline from your local municipal office or its website.

4. Professional Tax Registration

Professional tax is a state-level tax imposed on income earned by employees or professionals. If you have employees in your business, you may need to register for the purpose of professional tax with the respective state authority.

5. Import Export Code (IEC) – For Cross-Border E-commerce

If you plan to sell your products outside India via platforms like Etsy, eBay, or Amazon Global, you need to apply for an Import Export Code (IEC).

Issued by the Directorate General of Foreign Trade, viz., DGFT, the IEC is mandatory for any import or export activity.

You can apply for it online on the DGFT website.

6. Udyam Registration (for MSMEs)

Udyam Registration is a government registration for Micro, Small, and Medium Enterprises (MSMEs). It is optional but also highly recommended as it provides:

• Subsidies
• Lower-interest loans
• Government tenders and schemes

It is free of cost and can be done on the Udyam portal.

7. Trademark Registration (Optional but Important)

If you want to protect your brand name, logo, or slogan, it is wise to register them as trademarks. This helps prevent others from copying your brand identity and gives you legal rights to your brand assets.

Trademark registration is done through the Controller General of Patents, Designs & Trademarks.

8. FSSAI License (For Selling Food Items)

If you plan to sell any kind of food product (even packaged or homemade items), an FSSAI license is mandatory. It is issued by the Food Safety and Standards Authority of India (FSSAI).

There are three types of licenses based on business size:-

• Basic Registration – For turnover below ₹12 lakh
• State License – For turnover between ₹12 lakh to ₹20 crore
• Central License – For turnover above ₹20 crore or inter-state operations.!

You can apply for FSSAI on foscos.fssai.gov.in

9. Legal Agreements and Policies for Website

For your own e-commerce website, the following legal documents are important:

• Privacy Policy
• Terms and Conditions
• Shipping Policy
• Return and Refund Policy
• Disclaimer

These documents help in building customer trust and are also required by many payment gateway providers.

10. Payment Gateway Setup

To accept the online payments through credit/debit cards, UPI, or net banking, you need to set up a payment gateway. Popular payment gateways include:-

• Razorpay
• PayU
• Instamojo
• CCAvenue...!

To activate your account, they usually ask for:

• PAN card
• GST certificate
• Business registration proof
• Bank account details
• Website with policies

11. Marketplace Seller Registration (if applicable)

If you are planning to sell on platforms like Amazon, Flipkart, Meesho, etc., you need to register as a seller on each platform.

Each platform has its own onboarding process, and you must provide:

• GST certificate.
• PAN.
• Bank account.
• Identity proof.
• Product details.

Conclusion

Starting an e-commerce business in India can be rewarding, but it is very important to complete all the required legal registrations and licenses before you begin your services. Not only do they keep you legally compliant, but they also build customer trust and open the door to professional services like payment gateways, courier partners, and online marketplaces.

Here is a quick checklist for easy reference:-

Before starting, consult a legal expert or CA to make sure you have completed all applicable formalities based on your specific e-commerce model.