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Introduction

We want to start an e-commerce venture that will deal in renting of furniture. This
will be a marketplace model where the suppliers will list their products and
consumers will buy from our platform. The logistics in this case will be provided by
us. This is a simple B2C model where the consumers can find the manufacturer in
the platform.

Business Structure
There are two business structures that we could follow that is private limited
company or limited liability partnership. We have not considered sole proprietorship
and partnership for the simple reason that the liabilities associated with these forms
of business structure is unlimited. We have also not considered public company
because the compliance level in case of public company is very high. We might go
for public company once we establish our operations and make a name for our
company. There are pros and cons for both private limited company as well as
limited liability partnership. The advantages of LLP over private limited company are
lower cost of formation, no requirement of compulsory audit, lower compliance
which results in reduced cost etc. However, higher compliance in case of private
company leads to higher transparency which in turn leads to higher attraction from
venture capitalist. This is the reason we go for private company.
Business Structure: Private Company

Location
We think Bangalore will be the perfect place to start our venture. The city has
emerged as the hub for technology start-ups, including many successful ecommerce company. The availability of talent pool, strong IT infrastructure, ready
nation-wide connectivity, and proximity/approachability to potential VCs are the key
reasons supporting the location decision. For instance, due to the conduciveness of
business environment, InMobia mobile advertising platformrelocated from
Mumbai to Bangalore, indicating the attractiveness of the location. In addition, from
a legal stand point, the firm will clearly provide for the jurisdiction to the Bangalore
courts in any contract the firm enters with customers, vendors, financial
intermediaries, and other service providers. Due to the presence of several similar
e-commerce companies, the Bangalore courts are likely to have a deeper
experience in such cases leading to faster resolution.

Regulatory framework governing e-commerce in India


Although there is no defined e-commerce laws in India, yet there are certain
regulatory frameworks that we need to adhere to while starting our e-commerce
firm.

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Information Technology Act, 2000


The Contract Act, 1872
The Consumer Protection Act, 1986
The Income Tax Act, 1992
Customs Act, 1962
Sales tax and VAT
Competitive Law

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