What Type of License Does a Food Delivery Service Need?

Last Updated at: Jul 06, 2021
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Food Delivery Service Need
Given the COVID-19 situation, the FSSAI has provided additional time to FBOs (Food Business Operators) and distribution agencies to comply with Food Safety and Standards (Recovery and Distribution of Surplus Food) Regulations, 2019. In a notification dated 25th June 2020, the timeline for compliance has been extended till 1st January 2021.

 

Are you planning on starting a food delivery service? Over the past few years, such a platform has become a viable and lucrative business opportunity. However, like with any other business, this too must comply with some regulations. Additionally, you will also need to obtain a few licenses to ensure that the online food delivery service is legally compliant. In this article, we will take a look at the licenses and permits needed to start a food delivery service in India.

  1. Are food delivery services a good business option?
  2. What are the licenses needed for starting a food delivery service in India?
  3. What documents are required to start a food delivery service in India?
  4. Things to consider before starting a Food Delivery Business in India
  5. How can VakilSearch help you?

Are food delivery services a good business option?

One of the best things about such a business is that food cannot go out of fashion or have demand fluctuations. The demand for food is ever-present, and take-outs are on the rise due to a large number of students and single people living alone now. Most of these youngsters do not wish to cook for themselves and hence order out. As a result, the demand for hygienic, healthy, and tasty food is on the rise. Therefore, starting an online food delivery service is an excellent business option if you are someone who enjoys cooking. However, before you start, let’s take a look at the licenses you need to operate such a business in India.

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What are the licenses needed for starting a food delivery service in India?

Let us now take a quick look at the compulsory licenses you need to start such a business in India,

Shop Act License

If you wish to run a food truck, restaurant, or online food delivery service, you must get such a license. They take around 30 working days to obtain, and the Department of Labour handles their regulation. Since the license is state-specific, all businesses must register as per their State’s guidelines.

Health Trade License

Establishments that have an impact on public health must acquire such a license to assure customers, and the government that the food served is hygienic and clean. The Municipal Corporation of your city will be responsible for issuing such a license.

FSSAI License

The FSSAI license is mandatory for all food business operators working in India. To obtain this license, establishments must register with the Food Safety and Standard Authority of India and then opt for the appropriate license. In case your business generates less than INR 12 lakhs a year, you will need to get an FSSAI registration. If the company makes between INR 12 lakhs and INR 20 crores in a year, you will need to obtain a State License. If you wish to expand your business to other states or make more than INR 20 crores a year, you will have to get an FSSAI Central License.

Trademark Registration

In case you have a unique product name or logo and want to protect the brand, you must obtain a trademark registration. Since online food delivery services work as an e-commerce business, it is best to register the trademark to protect your logo.

GST Registration

If you earn more than the GST exemption threshold, you will have to register for the GST. While the threshold for businesses is INR 40 lakhs, all e-commerce businesses must mandatorily obtain a GST registration.

Signage License

In case you wish to market your brand via posters, images, and testimonials, you will need to get a signage license. Your local municipal corporation can issue such a license that will enable you to take up better marketing strategies.

E-commerce agreements

These will help you define professional relationships with third-party businesses and delivery partners. The agreement will cover all business points, such as details of the services, the term of the agreement and the payment methods. Having such a legal contract in place will help prevent misunderstandings later on.

What documents are required to start a food delivery service in India?

Entrepreneurs will need to submit the following documents if they wish to start a food delivery service in India.

  1. Permanent Account Number – Company PAN Card
  2. Photo ID of the applicant
  3. Proof of address of the applicant
  4. Banking details of the applicant
  5. Certificate of Incorporation
  6. Food license 
  7. No Objection Certificate from the owner of the place of business
  8. GST Registration
  9. EPF and ESI Registration, if required
  10. Professional Tax Registration, if required

Things to consider before starting a Food Delivery Business in India

  1. Since a lot of licenses and permits depending on the locality of the business, make sure you contact an expert to understand the legal requirements of starting such a company. 
  2. Make sure you conduct a thorough market analysis to gain an understanding of your consumers and their requirements. This will help you target the right market and prepare the right kind of menu depending on what your audience expects from you.
  3. To protect your assets, it is best if you incorporate the business as a separate legal entity. Talk to a lawyer to gain an understanding of what legal structure to incorporate and the processes involved for the same.
  4. Look for multiple vendors before finalising on your suppliers. Also, it is best if you form a long-lasting relationship with such vendors as that will help you get better deals and prices. However, never compromise quality and ensure that everything you buy is hygienic and safe.
  5. Marketing is an integral part of running any business that you cannot ignore. Distribute flyers, advertise in local papers, and spread the word through friends and family initially. As your business expands, you can devote more resources into marketing to grow your food delivery service even more.

How VakilSearch can help

  1. Our lawyers can help you understand precisely what licenses and permits you need to obtain to start an online food delivery business.
  2. VakilSearch can help file all your license applications so that you don’t have to worry about legal documentation.
  3. We also offer a slew of services related to accounting, tax registration, and filing, which will help you run your business smoothly and efficiently.