1) At the outset, you need to decide the form and structure of the proposed business i.e. whether proprietorship, partnership, company, etc.
2) You have to use a unique name (not used by any other business) and get it registered and protect the Intellectual Property Rights e.g. copyrights, trademarks, etc.
3) The registration of proprietorship and partnership firm is optional while it is compulsory for a company,
4) For online business, you need to have your own website with unique domain name which needs to be registered and hosted on a server,
5) You should have a dedicated 24x7 customer helpline for redressal of grievances,
6) You need to have RBI approved Payment Gateway,
7) You should have the services of a dedicated courier for delivery of products to customers,
8) You require physical location and license under Shops and Establishment Act,
9) Of course, there needs to be bank account in the name of the business. A current bank account is as good as a "proprietorship concern".
10. VAT is a multi point levy where the tax paid on local purchases from the registered dealer can be set off against the tax payable on the sale of goods, other than special goods. VAT, as the name suggests means value added tax. Any act which result in increasing the value of the product attracts VAT...value addition. There are a number of taxes you need to pay, VAT, Service Tax, Excise Duty, Sales Tax, etc depending on the products to be sold by you and whether the products are imported or not.
11. Liability for registration is fastened to the following category of persons:-
a. Those dealers whose total turnover in respect of purchase and sales in the State is not less than Rs.10 lakhs for a year are to get registered under the Act.
b. The other dealers whose total turnover for a year is not less than Rs.5 lakhs shall get registered.
c. Casual Traders, agent of non-resident dealer and dealers in jewellery irrespective of quantum of turnover shall obtain registration.
d. Those dealers who intend to commence the business, on option, may obtain registration.
12. The registration fee is different in different states. For additional place of business separate fee is charged in addition to principal place of business. The registration number allotted to the dealers is popularly known as TIN i.e. Taxpayer Identification Number. This is a eleven digit number to be quoted in all VAT transactions and correspondence
13. Last but not the least, you need a contract to be listed on your website. The rights and liabilities of you and your customers will be governed by this contract. It is always advisable to get this crucial document drafted by your lawyer to enforce your rights.