What are all the legal formalities I need to cover to start an e-

commerce business ?

INTRODUCTION There are many legal formalities that are required in order to start a

company and e-commerce activity in India. the Information Technology Act 2000 prescribes stringent penal and pecuniary penalties for violation of its provisions during e-commerce transactions.

Any person starting an e-commerce business has to ensure cyber law due diligence in India. Under the Information Technology Act 2000 (IT Act 2000) there are many “Due Diligence Requirements” that Banks, Internet Service Providers (ISPs), Search Engines, E-Commerce Portals, etc must fulfill. Of all stakeholders, Intermediaries must pay special attention to Cyber Law Due Diligence Requirements of India. Intermediaries like ISPs, Cyber Café owners, Web Hosting Service Providers, Blogging Platforms, etc have to take care of issues pertaining to Cyber Law, Cyber Security, Defamation Laws, Intellectual Property Rights (IPRs) Violations, etc.

DOMAIN NAMEThe first issue to be addressed is the choice

of domain name.The concerned party has to apply for

registration to the appropriate national registry with a registration fee.

Each domain name must be unique. Disputes arise when more than one company

tries to get the same domain name.In case of disputes, first come first served

principle is applied.

ONLINE AUCTIONSThere is no specific legislation dealing with online

auctions. It is only a manner of contracting and rules relating to when an offer is accepted and revoked.

With online auctions there is no specific time frame, so the website sets up a closing time by which all bids may be placed.

Internet auctions are prone to “accidental fraud” i.e participants fail to pay or deliver goods because they forget and not with any fraudulent intention. To deal with this, companies now for a fee, need to provide assurance that goods are delivered and money paid with a guarantee. In case of any problem, company takes the loss.

DISCLAIMERA website can create legal liability for the e-

commerce business in each country from which someone accesses the site. To limit the legal liability of the e-commerce, the party should include disclaimer.

A disclaimer may reduce the chances of any legal liability but it depends on the discretion of the court if it upholds the exclusion of liability.

MANAGING A SITEThe customer may have queries, complaints

or comments regarding any part of the site. A good way of addressing this is to design a standard automatic response for every e-mail received.

Customer often shares personal information on a site. The company needs to have a policy to deal with such data. Personal data should not be gathered from this source without a suitable warning.

CONCLUSIONE-commerce is about doing business electronically. Any

person intending to deal with certain goods and services on-line should check the relevant rules which regulate those goods and services.

A special care must be taken of the Online Copyright issues that are increasingly posing problems for Intermediaries. The liability of Internet Intermediaries for Copyright Violations is an issue that should be taken very seriously. With Laws like Digital Millennium Copyright Act (DMCA) and similar Laws, this liability has become very onerous.

Laws related to e-commerce in India are still evolving and they vary as per different business models.