What is eBay? eBay is the India's largest online marketplace, boasting more than ten million customers and three million items for sale at any given time. The site has £170m users worldwide, bidding for a vast array of goods and services ranging from the sublime to the ridiculous and covering all points in between. In India, 50,000 businesses are operated under the eBay umbrella.
How does it work? If you want to start selling online, you can register a sellers' account as an individual, or open an eBay shop. The latter option is only appropriate if you expect to be regularly selling in quantity. In exchange for paying lower listing rates, you pay a monthly fee. To begin trading, you simply open an account by providing standard subscription information such as your name, address and credit card details.
Why start a shop? Opening an eBay shop is a simple option if you want to run a business without incurring overheads such as rent and rates. An increasing number of people in the India have discovered their entrepreneurial streak and earn a living or supplement their income by buying stock wholesale and re-selling it for a profit online. Other sellers, such as antique dealers and collectors, have turned their interest or hobby into a business. eBay claims that sellers see an average 25% increase in sales the three months after opening an eBay Shop and save on listing fees. Having a storefront also gives you credibility and enables you to display all your goods in one place, rather than having to scatter items across hundreds of different categories. An added benefit is that you get your own search engine with your shop and you don't have to relist goods that don't sell.
What is Sole Proprietorship firm? A sole proprietorship is the oldest and the most common form of business. It is a one-man organisation where a single individual owns, manages and controls the business. Its main features are :-
>> Ease of formation is its most important feature because it is not required to go through elaborate legal formalities. No agreement is to be made and registration of the firm is also not essential. However, the owner may be required to obtain a license specific to the line of business from the local administration.
>> The capital required by the organisation is supplied wholly by the owner himself and he depends largely on his own savings and profits of his business.
>> Owner has a complete control over all the aspects of his business and it is he who takes all the decisions though he may engage the services of a few others to carry out the day-to-day activities.
>> Owner alone enjoys the benefits or profits of the business and he alone bears the losses.
>> The firm has no legal existence separate from its owner.
>> The liability of the proprietor is unlimited i.e. it extends beyond the capital invested in the firm.
>> Lack of continuity i.e. the existence of a sole proprietorship business is dependent on the life of the proprietor and illness, death etc. of the owner brings an end to the business. The continuity of business operation is therefore uncertain.
Hence, this form of organisation is suitable for the businesses which involve moderate risk, small financial resources, capital requirement is small and risk involvement is not heavy like automobile repair shops, small bakery shops, tailoring, etc. It accounts for 80% of registered business in India and there are good number of Ebay sellers who have already registered themselves as sole proprietor, partnership firm or LLP in order to operate their business.
What are the Advantages of Sole Proprietorship firm?
>> Ease of formation
>> Maximum incentive for work
>> Secrecy of business
>> Quick decisions and flexibility of operations
Why to register a Sole proprietorship Firm for doing business on EBAY?
Reason #1: It will help you sell your products to international customers. You need IEC code to sell goods outside the perimeter of India and you can't get IEC code as an individual.
Reason #2: Legally, you must present bill/invoice to every product you sell which must carry either VAT (Local State Tax) or CST# (Inter-State Tax)
Reason #3: It enables you to get benefits like 'Registration of Trademark', enable export business, acquire B2B contacts and TAX benefits.
Reason #4: If your business is growing exponentially and you need some courier agent to get you some discount, you will need to open an account with your courier agency and you need again need a registered business for this.
How to register Sole Proprietorship Firm?
Step 01: Find a trade name and ensure it is not already trademarked. Also book a domain for you. A website will take you everywhere and trademark will ensure, no one can use your brand (This step is completely optional and depends on your business plan.)
Step 02: Get some stationery printed - letterheads (actually these you can simply design on your PC, get some good quality A4 papers and print as you need), visiting cards (sigh, well, we still need these around), and if you're really moneyed, get some brochures designed and made up as well.
Step 03: PAN Tax Number Registration Obtain Permanent Account Number (PAN) for the business from Authorized franchise or agent appointed by National Securities Depository Services Limited (NSDL) or Unit Trust of India (UTI) Investors Services Ltd
Fees: Rs 94
Duration: 7 Days
Step 04: TAN Tax Number Registration Obtain Tax Deduction at Source Number (TAN) for the business from Authorized franchise or agent appointed by National Securities Depository Services Limited (NSDL) or Unit Trust of India (UTI) Investors Services Ltd
Fees: Rs 60
Duration: 7 Days
Step 05: Open a Current account for the business (Prefer private, they provide good online service)
Min. Balance: 1000- - 25000
Duration: 4 Days
Step 06: Obtain registration under Shop and Establishment Act from Municipal Corporation or any other authority)
Fees will differ from state to state
Duration: 5 Days
Step 07: Obtain IEC Code by filling Aayat-Niryaat Form (ANF1 & ANF2) Obtain Importer & Exporter Code Number for undertaking import/export of goods & services from Director General of Foreign Trade
Fees: Rs 1000
Duration: 8 Days
Step 08: Obtain VAT # Obtain registration under Value Added Tax/States Sales Tax for effecting sale of more than Rs 10 Lacs within the same state & subject to complying with eligibility criteria from State VAT/ Sales Tax Department
Duration: 7 Days
Step 09: Obtain CST # Obtain registration under Central Sales Tax for sales effected in the course of interstate trade in India from State Central Sales Tax Department
Fees: Rs 25
Duration: 7 Days
Final Tip: It's better to hire some CA or atleast consult to make the process easier for you. And that's about it. So go make Money!