Legal Compliances
The digital marketing sector in India is very different when compared to other sectors in terms of legal compliance. Especially electronic trading in the medicinal industry raised concerns about more stringent legal compliances. Since most advertisements for the medical industry are promoted aggressively on digital communication channels, the government initiated stricter regulation of the same. This is why there is a range of legislative, regulatory, and statutory measures that are already in action to monitor online pharmacies that continue to sell restricted drugs in India.
Legal Compliances Required for Digital Marketing in India
The following registrations are required as a part of legal compliances for digital marketing in India:
LLP Registration or Company
In the initial phase of incorporating a digital marketing business, it is always advisable to opt for an LLP registration or company so the owner's personal assets are protected, and they can focus on incorporation. LLP registration or company also makes it easier to apply for bank accounts for the digital marketing firm and avail of other service tax or VAT registrations conveniently. Moreover, almost all industries have allowed partnership firms to trade their products or services on their website. However, in case of litigation, the protection of limited liability is no more available to the firm. But this is different when you opt for an LLP registration or company.
Even if an owner aspires to commence a digital marketing website as a sole proprietorship, it is better, to begin with company registration. Company registration allows equity funding or angel funding, which can account for the huge success of the digital marketing business.
GST Registration
It is compulsory to apply for GST registration when incorporating a proprietary digital marketing website or becoming an official seller on a digital marketing website. However, it is only mandatory for businesses that produce a turnover of more than INR 20 lakhs in a year. This threshold limit is INR 10 lakhs for northeastern states. Therefore, applying for GST registration online through the official GST portal is very convenient. You will also be required to upload some necessary documents during the application.
Bank Account
An official bank account is also necessary to incorporate a digital marketing website in India. However, after you have successfully opted for LLP registration, you can easily open a bank account in the firm's name by simply contacting the bank. If you are going ahead with the proprietorship firm, you will require GST registration to open a bank account in the firm's name. Please remember that this is a mandatory step because only a bank account can help you acquire a payment gateway on a digital marketing website.
Payment Gateway
It is obvious that a payment gateway is necessary to operate a digital marketing website since it will allow access to customer payments. The payment gateway also provides various options to customers to pay through varied methods, including debit cards, credit cards, net banking, internet banking, or UPI. Therefore, a single payment gateway is sufficient for multiple online payments. After a customer pays on the website through the payment gateway, the amount is transferred to the registered bank account of the digital marketing firm within a period of 1 to 2 business days.
If a firm chooses an online marketplace to sell its products and services, then the marketplace accepts the payment directly through the payment gateway and credits it to the bank account of the firm. So, in this case, only a bank account would be required and not a payment gateway.
Legal Documentation
Legal documentation is an important part of legal compliance for any registration or law in India. In the case of a digital marketing website as well, it helps protect the promoter's and business owner's rights through a proper privacy policy and terms and conditions document. In the case of proprietary digital marketing websites, privacy policies, terms and conditions, and a disclaimer are drafted based on the nature of the business and its activities, and they are always mentioned on the website.
In the case of an online marketplace, a seller's agreement is provided, and the seller is then legally bound by the terms and conditions mentioned in that agreement. It is hence very important that you go through the seller's agreement carefully before signing it.
Cyber Law Legal Compliances
The Cyber Law Department is the authority that regulates digital marketing businesses in India. These websites must hence ensure that they follow all laws laid by the Cyber Law Department. Due diligence of cyber law has been especially regulatory and rigorous in the past few years as foreign companies continue to be prosecuted by the department for non-exercise of due diligence. Additionally, digital marketing websites must also ensure proper privacy protection, cyber security, data security, confidentiality, and maintenance as per cyber law compliances. It would be best to imply such deference for payment gateways as well.
Other Legal Compliances
Besides the aforementioned legal compliances, there are also other laws that apply to digital marketing websites, including contract law, panel code, and more.
Technical due diligence is also an important step in establishing a digital marketing business.
Legal compliance with labour law is also applicable to digital marketing websites in some cases.
Conclusion
While we have mentioned all significant legal compliances applicable to digital marketing businesses, it is always advisable to seek expert online legal advice so you do not miss out on any legal requirements. Lawgical India and its team of online legal experts provide legal advice online in terms of legal compliance for different types of entities of varied natures, activities, and products.
FAQs
1. Do I need to register my digital marketing business as a company or LLP?
Yes, it is advisable to register as an LLP or company to protect your personal assets and ease operations like opening a bank account or raising funding. Lawgical India can help you register quickly and legally.
2. Is GST registration mandatory for digital marketing firms?
GST registration is mandatory if your annual turnover exceeds ₹20 lakhs (₹10 lakhs in northeastern states). Lawgical India simplifies this process for you with quick online assistance.
3. Why do I need a separate bank account for my digital marketing business?
A dedicated business bank account is essential to receive client payments and integrate payment gateways. Lawgical India can guide you on the right documents and steps to open one.
4. What are the benefits of having a payment gateway?
A payment gateway allows you to accept payments online via cards, UPI, or net banking. Lawgical India helps you get set up with trusted payment partners quickly and securely.
5. What legal documents are required on a digital marketing website?
You’ll need privacy policies, terms & conditions, and disclaimers tailored to your business. Lawgical India can draft these legally sound documents for you.
6. Are digital marketing websites regulated under cyber laws in India?
Yes, digital platforms must comply with cyber law provisions including data protection, cyber security, and privacy regulations. Lawgical India ensures your business aligns with all cyber law mandates.
7. What if I operate on an online marketplace instead of my own website?
You’ll still need basic legal compliance like GST registration and a business bank account. Lawgical India can help you review and understand seller agreements before signing.
8. Are labour laws applicable to digital marketing agencies?
Yes, if you have employees, labour laws such as minimum wages, working hours, and contracts must be followed. Lawgical India can help ensure you're compliant with employment regulations.
9. What happens if I ignore legal compliances?
Non-compliance can lead to legal penalties, loss of reputation, or even shutdowns. Lawgical India prevents such risks with expert compliance solutions.
10. Can Lawgical India assist with end-to-end compliance for my digital business?
Absolutely. From registrations to legal drafting and cyber law checks, Lawgical India takes care of every compliance need so you can focus on growing your brand.
