A legal checklist to starting a food business in India

Last Updated at: November 04, 2019
2559
A legal checklist to starting a food business in India

Setting up a food business in India is not as simple as people crack it up to be. There is incorporation, investment, five or so different types of licenses to be acquired and then the actual paperwork of completing all of these. In this article, we dive into the nitty-gritty.

India, the “Land of Spices”, apart from being famous for a variety of dishes, is also a business house for many industries since time immemorial. This can be related to the business that Indo-Romans had and Arabia’s vivid business entities in collab with Indian business people during the 1st century of the Common Era (CE). So enough of burning up with history, and let’s start connecting with our topic. According to this introduction, it is a general probability that the instant business type is chosen by any homegrown entrepreneur would be some or the other type in the food industry.

Explore our legal help services to protect your intellectual property, secure funding from Venture Capitalists & comply with the many regulations of the MCA information and resources to help you through your end to end business requirement.

So what’s cooking inside India’s 4 trillion rupees plus industry. Here, we bring to you a pocket checklist of the legal obligations to starting a food business in India. This is most useful for all the entrepreneurs, who are looking for small business ideas or start a food business in India.

INCORPORATION

As the food industry is a vast subject to deal with the available constraints, let us focus on any one aspect of it. So the most sought-after business and easy to start is a restaurant business and now we can look at the various regulatory challenges.

As the first instance stands, we have to first look into the type of business that the company is going to register. The person needs to register the business either under a sole proprietorship, LLP, Pvt Ltd. Company or as a One Person Company.

Based on the requirement and the purpose, the business can be registered under any title. The incorporation cost of OPC and LLPs are comparatively less than other forms. A startup can have these two formats for the cost reduction.

Get FREE legal advice now

Now comes the next part of the business which is the financial input to the business. This can be classified into two types, either investment from their own pocket or through bank in the name of loan. This can be easily availed as there is an easy window available for loans for startups and MSME. There is also CGTMSE which is a credit guarantee given to the MSME sector through various banks and it is by the small and medium enterprise ministry.

LICENSING

Before keeping taking a foot into the food industry, remember that licensing is an important step and covers the following:

  1. FSSAI license: FSSAI is a statutory body governing food safety and regulation in India. FSSAI license is an approval that provides for food safety and a sense of safety to the customers. This also stands as a reputation for being a restaurant which has followed all the protocols.
  2. Liquor license: Many urban restaurants have started selling liquor as the main base over the business for luring customers. But selling liquor does not always depend on the price and status of the restaurant. It also depends on the city and locality, for instance, if the restaurant is somewhere near the temple or school then availing liquor license would be next to impossible.
  3. Health/trade license:  This license is being given over the concern of public welfare by the local municipal authorities.
  4. Eating house license is another form of license required to open the restaurant and it is valid over three years.
  5. Shop & Establishment Act: The next important one being registration under this act which needed to be taken within 30 days of the commencement of the shop to procure other mandatory licenses.
  6. Trademark: The shop’s logo, brand name, etc.  have to be registered under the Trademark Act to prevent the misuse of the goodwill of the shop after well establishing the shops.
  7. Signage licenseThe shop also needs to get a which is necessary to keep any sign or board in the shop.
  8. Registration under Goods and Service tax is necessary to run the business without any governmental hindrance.
  9. Other miscellaneous regulations: Other regulations to be addressed include:
  • Fire department NOC
  • Music license
  • Lift clearance
  • Environment clearance certificate

DOCUMENTS REQUIRED

The documents that are generally required to avail all these license are stated below:

  1. PAN card
  2. Aadhaar Card
  3. Details of the employee
  4. Address proof of the partners
  5. Partnership deeds
  6. Passport size photo
  7. NOC from landlord
  8. Site plan and layout
  9. Water and power bill
  10. Water quality report
  11. Employee’s medical certificate
  12. Property tax proof
  13. Structural stability certificate
  14. Certificate of completion in case of newly constructed
  15. Trade license from the local authority
  16. Kitchen layout plan
  17. Affidavit
  18. Contact details
  19. Food category list
  20. CCTV installation undertaking
  21. Amusement undertaking
  22. Lease deed proof
  23. Latest bank statement
  24. Digital signature

These are stated in a general scheme, these are the documents that a person who wishes to start a business in the food industry has to keep in ready to give to the required authority in time of need.

The food industry has been explained in the introductory para as one of the most common startup ideas that a person can get any time but the food industry can also be the most difficult one to enter as the entry barrier into the business is a tougher one as compared to other industry. This industry is directly connected to the consumers’ health and thus the regulatory process over the industry is heavy. This article gives an insight into the legal checklist that any entrepreneur today has to follow in order to move the business in the direction of growth and to do that seamlessly without any intrusions.

Start your food business online and embark your journey today.

To conclude, the first step for a food business is to register the business either under a sole proprietorship, LLP, Pvt Ltd. Company or as a One Person Company. The investment is required, followed by FSSAI, liquor, and health license. Finally, the paperwork needs to be done to register the shop and trademark the logo.

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A legal checklist to starting a food business in India

2559

Setting up a food business in India is not as simple as people crack it up to be. There is incorporation, investment, five or so different types of licenses to be acquired and then the actual paperwork of completing all of these. In this article, we dive into the nitty-gritty.

India, the “Land of Spices”, apart from being famous for a variety of dishes, is also a business house for many industries since time immemorial. This can be related to the business that Indo-Romans had and Arabia’s vivid business entities in collab with Indian business people during the 1st century of the Common Era (CE). So enough of burning up with history, and let’s start connecting with our topic. According to this introduction, it is a general probability that the instant business type is chosen by any homegrown entrepreneur would be some or the other type in the food industry.

Explore our legal help services to protect your intellectual property, secure funding from Venture Capitalists & comply with the many regulations of the MCA information and resources to help you through your end to end business requirement.

So what’s cooking inside India’s 4 trillion rupees plus industry. Here, we bring to you a pocket checklist of the legal obligations to starting a food business in India. This is most useful for all the entrepreneurs, who are looking for small business ideas or start a food business in India.

INCORPORATION

As the food industry is a vast subject to deal with the available constraints, let us focus on any one aspect of it. So the most sought-after business and easy to start is a restaurant business and now we can look at the various regulatory challenges.

As the first instance stands, we have to first look into the type of business that the company is going to register. The person needs to register the business either under a sole proprietorship, LLP, Pvt Ltd. Company or as a One Person Company.

Based on the requirement and the purpose, the business can be registered under any title. The incorporation cost of OPC and LLPs are comparatively less than other forms. A startup can have these two formats for the cost reduction.

Get FREE legal advice now

Now comes the next part of the business which is the financial input to the business. This can be classified into two types, either investment from their own pocket or through bank in the name of loan. This can be easily availed as there is an easy window available for loans for startups and MSME. There is also CGTMSE which is a credit guarantee given to the MSME sector through various banks and it is by the small and medium enterprise ministry.

LICENSING

Before keeping taking a foot into the food industry, remember that licensing is an important step and covers the following:

  1. FSSAI license: FSSAI is a statutory body governing food safety and regulation in India. FSSAI license is an approval that provides for food safety and a sense of safety to the customers. This also stands as a reputation for being a restaurant which has followed all the protocols.
  2. Liquor license: Many urban restaurants have started selling liquor as the main base over the business for luring customers. But selling liquor does not always depend on the price and status of the restaurant. It also depends on the city and locality, for instance, if the restaurant is somewhere near the temple or school then availing liquor license would be next to impossible.
  3. Health/trade license:  This license is being given over the concern of public welfare by the local municipal authorities.
  4. Eating house license is another form of license required to open the restaurant and it is valid over three years.
  5. Shop & Establishment Act: The next important one being registration under this act which needed to be taken within 30 days of the commencement of the shop to procure other mandatory licenses.
  6. Trademark: The shop’s logo, brand name, etc.  have to be registered under the Trademark Act to prevent the misuse of the goodwill of the shop after well establishing the shops.
  7. Signage licenseThe shop also needs to get a which is necessary to keep any sign or board in the shop.
  8. Registration under Goods and Service tax is necessary to run the business without any governmental hindrance.
  9. Other miscellaneous regulations: Other regulations to be addressed include:
  • Fire department NOC
  • Music license
  • Lift clearance
  • Environment clearance certificate

DOCUMENTS REQUIRED

The documents that are generally required to avail all these license are stated below:

  1. PAN card
  2. Aadhaar Card
  3. Details of the employee
  4. Address proof of the partners
  5. Partnership deeds
  6. Passport size photo
  7. NOC from landlord
  8. Site plan and layout
  9. Water and power bill
  10. Water quality report
  11. Employee’s medical certificate
  12. Property tax proof
  13. Structural stability certificate
  14. Certificate of completion in case of newly constructed
  15. Trade license from the local authority
  16. Kitchen layout plan
  17. Affidavit
  18. Contact details
  19. Food category list
  20. CCTV installation undertaking
  21. Amusement undertaking
  22. Lease deed proof
  23. Latest bank statement
  24. Digital signature

These are stated in a general scheme, these are the documents that a person who wishes to start a business in the food industry has to keep in ready to give to the required authority in time of need.

The food industry has been explained in the introductory para as one of the most common startup ideas that a person can get any time but the food industry can also be the most difficult one to enter as the entry barrier into the business is a tougher one as compared to other industry. This industry is directly connected to the consumers’ health and thus the regulatory process over the industry is heavy. This article gives an insight into the legal checklist that any entrepreneur today has to follow in order to move the business in the direction of growth and to do that seamlessly without any intrusions.

Start your food business online and embark your journey today.

To conclude, the first step for a food business is to register the business either under a sole proprietorship, LLP, Pvt Ltd. Company or as a One Person Company. The investment is required, followed by FSSAI, liquor, and health license. Finally, the paperwork needs to be done to register the shop and trademark the logo.

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