Which License is Required to Start a Restaurant Business?

Business

Which License is Required to Start a Restaurant Business?

Registrationwala

There’s no doubt that almost everyone loves eating food. However, some individuals out there not only love to eat food but also love serving it to others. For such individuals who are passionate about serving meals to others, starting a restaurant is a great idea. In this blog post, we shall guide our readers regarding the licenses required to start a restaurant business in India. 

Licenses and Registrations Required to Start a Restaurant 

To start a restaurant business in India, the following licenses and registrations are required:

Company Registration

To start a restaurant business in India, one of the most important requirements is to choose the business model. If you want to operate a small restaurant all on your own and do not want to register your business, you can opt for sole proprietorship. However, with this model comes unlimited liability. This means you will be liable for all the losses and debts incurred by the business. 

If you want to start the restaurant with another partner, you can opt for a partnership firm. For this model no business registration process is mandatory. However, like sole proprietorship, the partnership firm also comes with unlimited liability for owners. 

Therefore, it is best to choose a model like limited liability partnership, one person company, private limited company or public limited company. All these models offer limited liability protection to their owners. This means the owners’ personal assets are not at risk in case business incurs debt or losses.

To register an LLP, OPC, Pvt Ltd Co or Public Ltd Co, you need to file a company incorporation application online via MCA portal and secure certificate of incorporation from the Registrar of Companies.

FSSAI License

One of the most important licenses required to start a restaurant business in India is the FSSAI license. Without this license, you cannot legally operate a restaurant. The FSSAI license is issued by the Food Safety and Standards Authority of India under the provisions of the FSS Act 2006. There are three different types of FSSAI licenses. 

The exact license required by a restaurant business depends on its annual turnover, business size and operational scope. For a restaurant having an annual turnover of up to Rs. 12 lakh, FSSAI basic license is required. For a restaurant having an annual turnover between Rs. 12 lakhs and Rs. 20 crores, FSSAI state license is required. 

If the restaurant’s annual turnover exceeds Rs. 20 crores or if it operates across multiple states, then FSSAI central license is required. To apply for the basic license, you must file an application using form A with FSSAI. For state or central license, you file an application using Form B instead. 

FSSAI license remains valid for a period of 1 to 5 years, depending on applicant’s choice at the time of application. For ensuring you always have smooth and uninterrupted business operations, it is important that you apply for license renewal in a timely manner.

Eating House License

Another important license for a restaurant business is the eating house license. This license is issued by the local police authority. To secure this license in Delhi, you can visit the official portal of Delhi Police and then file an application for the license there. 

While filing the application, you must submit necessary documents like business registration details, trade license, MoA of the eating house, certificate of incorporation of the eating house, details of directors, etc. 

Make sure you provide correct information. In case of malafide information, the application shall be rejected. If the authority is satisfied with the application and attached documents, it shall issue the eating house license.

Health Trade License

The Health Trade License is required by a restaurant to ensure the food and beverages it offers are hygienic and safe for public consumption. This license is issued by the municipal corporation of the state where the restaurant is located. 

In Delhi, the Municipal Corporation of Delhi issues the Health Trade License to businesses. You can file an application for this license via MCD portal. 

GST Registration

GST Registration is a mandatory requirement for businesses if their annual turnover exceeds Rs. 40 lakhs for goods or Rs. 20 lakhs for services. To apply for the registration, you need to visit the official GST portal and file an application there. 

Once the application is approved, your business will be registered under the GST system and receive a unique goods and services tax identification number (GSTIN). To know more, you can connect with our GST consultants at Registrationwala.

Liquor License

If you want to serve alcohol at your restaurant, you will be required to obtain a liquor license. For obtaining this license, first, you need to ensure you meet eligibility requirements like age requirement and clean criminal record. Then, you need to file an application with the state excise department or relevant local licensing authority. 

The application must generally contain business details, address proof, NOCs from local authorities like fire department, identity proof, etc. Once the application is approved by the authority, the liquor license will be issued. After receiving the license, you must ensure its timely renewal.

Fire Safety License

The fire safety license or NOC from the fire safety department is important while establishing a restaurant. Obtaining this license ensures your restaurant has installed all the necessary safety equipment and meets standards set forth by the fire safety department. 

Environmental Clearance License

The environmental clearance license is issued by the pollution control board. A restaurant business must secure this license to make sure its wastewater discharge, waste disposal and emissions do not harm the environment.

Music License

There are two different music licenses that allow you to play music at your restaurant. You can obtain one or both of them depending on your requirements. If you want to play pre-recorded music at your restaurant, then you must apply for a PPL music license. You must obtain the license from Phonographic Performance Limited India. 

If you want your restaurant to have live musical performances, then you need to obtain an IPRS music license from the Indian Performing Right Society. If you fail to obtain the necessary music license, you might face penalties like interest on unpaid penalties and penal charges.

Shop and Establishment Registration

Shop and Establishment Registration is required for starting a restaurant business. Without this registration, you cannot operate your restaurant legally. Generally, you must secure the registration within 30 days of commencing business operations.

The exact process for shop and establishment registration varies from one state to another. This is because each state has its own Shops and Establishment Act.

Conclusion

To start a restaurant business in India and run it successfully, you must make sure you secure all the necessary licenses and fulfill all the registration requirements. This includes completing the company registration process, obtaining FSSAI license, eating house license, getting GST-registered, obtaining liquor license, fire safety license, environmental clearance license, music license and completing shop and establishment registration. 

Do you need assistance in starting a restaurant business in India? If yes, then connect with Registrationwala consultants for professional guidance and full support.

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