The Legal Requirements You Need to Fulfill
Opening a Restaurant, Food Manufacturing Company, Takeaway Restaurant, Dhaba or any other food venture is a dream of many. If you are reading this article, you are probably looking to start one. These businesses are profit-making and are in very much demand as food is a basic necessity. But opening a restaurant or any other food business is a difficult task. You need to comply with some legal requirements. We shall look into the details in this article.
In order to start a food business, you must have some licences issued by the government. You have to pay a fees to avail these licenses, which varies according to the size and type of the establishment. It is recommended to apply for these licences early as it takes a lot of time to get them approved.
Here is the list of licences which are required to open a food business–
The Food Safety and Standards Authority of India is the biggest regulator of the Food and Beverages (FnB) Industry in India. It lays down some standards for the hygiene and safety of food products. The size of your venture, location, turnover, installed capacity, etc. are some factors which are considered while obtaining an FSSAI licence.
Fees- An FSSAI licence costs around Rs. 5000-10000 depending upon the size of the venture.
Documents required for FSSAI License-
- Form duly completed and signed by the Proprietor(Restaurant Owner).
- Identity Proof
- Address Proof issued by Government Authority
- A list along with the identity proof of main directors and stakeholders in the business.
- Valid Email ID and Contact Number
- Food Safety Management plan (Get these documents by downloading online or from the nearest Notary)
- Proof of ownership or possession of premise(Sale Deed, Rent Agreement, Electricity Bill, etc.)
- Municipal Corporations or local bodies issued NOCs.
- Layout Plan of the Kitchen.
- Water Testing Report from an ISI approved facility.
- Affidavit of Proprietorship/Partnership Deed (in case of partnership firm or business operated in other premises)
- List of Food Category
- Types of tools and equipment to be used.
- Medical Fitness Certificates of Employees.
Here is the link to hire an expert for your FSSAI License.
Here is the link to know more about FSSAI License.
Trade licence issued by Municipal Corporation (or Local Governing Body)-
This licence is issued for one year and needs to be renewed in the month of March every year. Furthermore, depending on the size of the business, the amount of fees for this license ranges from Rs. 10,000 to Rs. 1,00,000.
GST Registration from the state government-
To begin with, food businesses are required to register for GST and get a GSTIN. Also, GST registration is issued by the state government. If you are having businesses in multiple states, then you need to register separately for each one of them. Besides this, if you need more information on GST registration for restaurants, click here.
Professional Tax License-
Furthermore, you need a professional tax license for employing salaried staff. You have to pay Professional tax on a monthly basis, for employees earning more than Rs. 10,000.
In particular, obtaining a license for serving liquor is the most expensive of all licenses required to start a food business. It requires a lot of time to get processed, hence it is advisable to apply early for this license.
In addition to all these requirements, you have to register your business as a partnership firm or a PVT. LTD. Company as per the type of your business. Also, you need to file annual returns, audit your finance. Furthermore, you can hire a CA to manage the economics of your business.
These are the legal requirements you need to fulfil in order to set up a food business. Besides, if you do not acquire the licenses as per the nature of your business, you are liable to pay a hefty fine. Also, do not forget to apply for these licenses in advance as they may take a lot of time to get issued.