Any online business needs to comply with the Indian Information Technology Law, which provides for various formalities to be completed.
Now, how important is that can be analyzed by the fact that in terms of IT Law, you as a website / online business owner are an Intermediary and can be held liable with the user for any illegal activity. But you will be absolved of all the liabilities and the user can be held liable, if you have done proper Due Diligence and legal compliance. For example, you are required to appoint aGrievance Officer for handling of various complaints like various famous E-commerce Portals have appointed, kindly visit here for the list of Grievance Officer.
Also compulsorily, you need to have proper Terms/Disclaimer/Privacy over the website, for Startup Legal Compliance, kindly visit www.LegalPages.in !