CHECKLIST FOR STARTING A RESTAURANT BUSINESS IN INDIA
CHECKLIST FOR STARTING A RESTAURANT BUSINESS IN INDIA
Everyone loves to eat! Who doesn’t want to gorge on the delicious food the restaurants serve along with the ambience that they provide.And chances are that one might even plan on opening his/her own restaurant to take his/her love for food to next level.
So, if you are planning to start a restaurant business either for the love of food or to venture into this rapidly growing business you need to be well prepared. Sure you have your business plan, the list food items you are going to include, the ideal place where you want to open it, the financial backing etc. Also, you need to focus on the legal and compulsory regulatory requirements to run your business smoothly and avoid any trouble in future. Once you obtain the necessary licenses and fulfill all other obligations,you are all set to start your business without any hassle.
Thus, below is the checklist regarding what all needs to be taken care of to start your very own restaurant.
- Choosing the business entity: First and foremost you need to get a clear idea as to what kind of business entity you want to choose. These can vary from a Sole Proprietorship, Partnership, Limited Liability Partnership (LLP), Private Limited Company or One Person Company (OPC). As per the ownership and the kind of restaurant, future plans etc. any one of the above can be chosen depending upon what suits your needs the best.
For instance LLP’s and OPC have a comparatively low incorporation cost as compared to Proprietorships and partnership firms and even provide limited liability etc. Thus, to begin with it may be a good idea to start the business as an LLP or OPC.
- Bank loans: To open a restaurant you may require a loan which can easily be borrowed from various banks, which are providing such loans.The bank grant depends on your business model, experience, collateral security etc. which are vital considerations for loan sanction.
Apart from regular loans there are schemes such as CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) by The Ministry of Small Medium Enterprise which provide loan without any collateral. Various banks such as SBI, Vijaya Bank, Indian Bank, Axis Bank Limited etc. provide loans under this scheme. It’s best to consult you preferred bank and get information regarding the best possible ways through which you can get a loan.
- Food License: All restaurants need to obtain a Food Business Operator license from the Food Safety and Standards Authority of India (FSSAI), as per The Food Safety and Standards Act, 2006. Each restaurant owner is required to register their business with FSSAI. The license can easily be obtained from the state level licensing authority before starting the restaurant operations. Running a restaurant without license is considered to be a legal offence
- Health-Trade License: Apart from Food license Health-Trade license is mandatory for all restaurants. It can be obtained from the Municipal Corporation or Health department of the statewhere you are planning to open a restaurant.
- Eating House License:Eating House License is another necessary license. City or state police headquarters and the police commissioner (licensing) are authorized to issue this kind of license. Even, it can be obtain online.
- Safety measures in case of fire: The restaurants need to follow all the necessary guidelines to ensure safety in case of fire. No Objection Certificate (NOC) for the same is required by submitting an application to the Chief fire officer. An inspectionwould be conducted and NOC may be granted if all conditions are fulfilled. Incase, otherwise necessary requirements are informed to the applicant.
- Liquor License: In case you plan on serving liquor in your restaurant a liquor license is required.Excise Commissioner of the city or region of the state is the authority to issue this license.
- Lift clearance: A lift clearance is required if you are planning to install a lift in your multi storey restaurant. The clearance can be obtained from the inspector from electricity department as well as from the Labour Commissioner of the city.
- Music license: As per the Copyright Act of 1957, a license is required for playing recorded music or videos. Phonographic Performance Limited or Indian Performing Right Society provides this license.
- Environmental measures: Environmental clearance is mandatory for all restaurants. An NOC from the Pollution Board of the city/state is required. This is to ensure that the environmental and pollutions norms are not being violated in the course of business.
- Insurance: The restaurant you are planning to open needs to be insured for Public liability, Product liability, fire policy and policy for building and assets. A suitable insurance company can be approached for the same.
- Signage License: Restaurants have to further obtain a signage license from the local civil authority (Municipal Committee or City Corporation) which is necessary for public display of signs.
- Trademark Registration: In case you plan to open a chain in the near future or are willing to protect your brand name from illegal usage by anyone else, you may opt for a trademark registration. This would help protect the goodwill associated with your name and ensure that the brand name is not being used by anyone else.
- Registration under Shops and Establishment Act: The restaurant needs to be registered under Shop & Establishment Act. Shop & Establishment License can be obtained by applying to the State Chief Inspector of Department of Labor. This is to protect employee rights and working conditions.
- Registration for Service Tax: The restaurant has to be registered for service tax with Central Board of Excise and Customs.This is in regard to the services and amenities provided by the restaurant besides food.
- Registration for VAT: Registration with state government is required for value added tax(VAT) on food items sold.
Thus, opening a restaurant requires a lot of pre-planning, various licenses and legal requirements that need to be fulfilled. Taking care of each one of them step by step can ensure a smooth start to the business which is sure to yield good results in the long run without any hassles.
Some of the related articles:
- LEGAL DOCUMENTS REQUIRED TO START A RESTAURANT IN INDIA
- LICENSE REQUIRED FOR STARTING A HOOKAH PARLOUR IN INDIA
Author: This blog is written by Ms. Eishani Behl, a passionate blogger & intern at Aapka Consultant.
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