Know everything about the process and legal requirements to be followed to start a restaurant business/ eating house in India.

1. Starting a
Restaurant
Business in
India

2. What are the various kind of business structures to carry out the
restaurant business in India?
PRIVATE LIMITED COMPANY
This is one of the most sophisticated forms of business entities in India. A group
of shareholders forms a Private Limited Company. Every shareholder is like a
business partner and allowed to have a variable number of shares. Shares can also
be easily sold to other individuals, thereby, changing the ownership of the company
without many legal formalities. In a private limited company, business assets and
liabilities are treated as the assets of the Company and are separate from the
personal assets of the members and the directors. Hence, every shareholder is just
responsible for his share of the total capital in the Company.
PARTNERSHIP FIRM
Partnership is “the relation between persons who have agreed to share the profits
of the business carried on by all or any one of them acting for the all”. It is
governed by the Indian Partnership Act 1932.
Any profit earned by the business is shared among the partners according to the
terms of legal partnership agreement. In case there are losses, each of the
partners is personally responsible to compensate for the loos if need arise.
Personal assets of partners may be used to pay off the liabilities of the business if
the situation warrants so. The partners are exposed to the unlimited liability
regarding the business losses incurred or for any other liabilities of the
Partnership.
LIMITED LIABILITY PARTNERSHIP (LLP)
This is a relatively new kind of business structure in India and the concept was
introduced in India in year 2009. A Limited Liability Partnership functions as a
structured business model with the advantage of limited liability of its partners.
Business assets are separate from the personal assets of the partners. In case the
business incurs losses, the personal assets of partners are not put at risk. The
maximum liability of every partner is defined by his contribution in the entity.
Compared to Partnership and Sole Proprietorship, Limited Liability Companies
always have better credibility among investors due to its organized and corporate
like structure with defined set of rules and regulations.
SOLE PROPRIETORSHIP
Sole proprietorship is a form of business entity where a single individual handles
the entire business organization. He is the sole recipient of all profits and bearer
of all the loses for such business. There is no separate law that governs a sole
proprietorship.
A sole proprietorship is not a separate legal entity and its identity is identified
with its proprietor only.

3. What are the various kind of licences/ registrations
required to carry out the restaurant business in India?
BUSINESS
REGISTRATION
The first requirement is to
decide the type of business
entity to carry out the
Restaurant/ Food business.
You can choose any of the
following type of business
structure to operate your
restaurant/ food business:
1. Private Limited Company
2. One Person Company (OPC)
3.Limited Liability Partnership
(LLP)
4. Partnership Firm
5. Sole Proprietorship
FSSAI LICENCE
One of the mandatory licenses
required for a restaurant is
the FSSAI or Food Safety and
Standard Authority of
India license issued under FSS
(Licensing & Registration of
Food Businesses) Regulations,
2011. It is a unique 14 digit
registration or license number
given to manufacturers, traders
(of food business) and
restaurants. It gives the
assurance that the food
products traded or used are of
good quality and debilitates
cases of adulteration and usage
of substandard products.
LIQUOR LICENSE
For restaurants planning to
serve their customers with
alcohol or beverages containing
alcohol, have to apply for liquor
license.
It is issued by the local Excise
Commissioner and the forms
are available at the respective
state government websites.
HEALTH/TRADE
LICENSE
Public health should be of
utmost concern for restaurants
and the government ensures
this through the Health Trade
license.
Issued by State’s Municipal
Corporation or Health
Department, it ensures that the
restaurant follows hygiene and
safety norms.

4. What are the various kind of licences/ registrations required
to carry out the restaurant business in India? (Contd...)
EATING HOUSE
LICENSE
Eating House means :- “Any place
to which the public are admitted,
and where any kind of food or drink
is supplied for consumption”. This
license is provided by Licensing
Police Commissioner of that city.
State Police Acts requires a license
to be obtained for operating an
Eating House. An applicant has to
apply for the Eating House License
under the City/State Police
Headquarters and the Police
Commissioner, Licensing.
The Registration Certificate/
Eating House license will be valid
for three years
SHOP AND
ESTABLISHMENT ACT
The workers of a restaurant are
protected by the Shop and
Establishment Act, which
regulates the terms and
conditions of employment in
commercial establishments.
Under the Ministry of Labour, this
act regulates working hours,
overtime pay, intervals for rest,
opening and closing hours, public
holidays, paid leaves, maternity
leaves etc.
This licence/ registration is
issued by concerned municipal
corporation etc.
GST
REGISTRATION
Restaurants, like most
businesses with a turnover of
more than Rs.40 lakhs will
require GST Registration in
most states. Restaurants in
special category states will
require GST registration if the
annual aggregate turnover
crosses Rs.20 lakhs.
Restaurants below this turnover
are exempted from GST
Registration, however, banks in
most of the cases insist to
obtain GST registration to open
a current bank account.
CERTIFICATE OF
ENVIRONMENT
CLEARANCE (CEC).
Restaurants are also expected
to apply for the Certificate of
Environment Clearance (CEC).
To obtain CEC one has to
submit an application along
with the Environmental Impact
Assessment Report (EIA) or the
Environment Management Plan
(EMP), details of public hearing
and NOC granted by state
regulators.

5. What are the various kind of licences/ registrations required
to carry out the restaurant business in India? (Contd...)
FIRE DEPARTMENT
The restaurant’s main motive
must be to guard their customers
against all things which are
injurious, be it food products or
dangers such as fire.
A No Objection Certificate (NOC)
from the fire department of the
particular state is a must to run a
restaurant.
LIFT CLEARANCE
This license is given by the
Electrical Inspector from the labor
commissioner office after
verifying the installation of the lift,
layout, safety gears etc.
MUSIC LICENSE
If your restaurant is playing
music then you should obtain a
music license from
the Phonographic Performance
Limited (PPL). If it is found that
the restaurant is playing the
music without obtaining a
proper license then there might
be legal complications.
SIGNAGE LICENSE
if you want to make use of
marketing strategies for your
restaurant either through word
of mouth, pictures, logos,
symbols, posters etc. you are
required to acquire a legal
permission which is the signage
license. This license can be
obtained from local civil
authorities like the Municipal
corporations etc.
*All the above mentioned requirements are general in nature and are applicable to a restaurant business all over India
subject to the modification/ changes as per the specific state or municipal Acts, Rules or Regulations.

6. Documents required for various kind of licences/ registrations
business organization to carry out the restaurant business
BUSINESS REGISTRATION
• specified documents
depending on the legal
providios applicable on the
structure of the business;
• Id Proof and Address Proof for
Owners/ directors/ partners
and place of business
• Valid Email Id, Phone Number
• Details of activities to be
carried
• Rent Agreement or ownership
proof for place of business
• Digital Signatures (for
company and LLP)
FSSAI LICENCE
• Id Proof and Address Proof
• Valid Email Id
• Phone Number
• Affidavit
• Declaration Of Food Safety
Management Plan
• Kitchen Layout Plan
• List Of Food Category
• Water Testing Report from ISI
approved Facility
• No Objection Certificate (NOC)
from the owner or the partner
• Medical Certificates of
Employees
LIQUOR LICENSE
• Documentary proof regarding the
legal status of the restaurant.
• Poof of legal possession of the
plot/ space.
• A certificate validating the
completion of the restaurant
• Trade License from the Local
authority;
• Certificate of registration of
Eating house license issued by
the DCP.
• Documentary proof of Income
Tax Assessment and GST.
• A complete layout plan of the
establishment, site plan of the
license outlets and the liquor
stores
• NOC from the state Fire Service
HEALTH/TRADE LICENSE
• Sanction and Completion
(Includes Ownership proof, Rent
Agreement or NOC from landlord)
• Three copies of the site plan and
layout
• Indemnity bond for Rs.100
• Structural Stability Certificate
signed by Structural Engineer
• Power and Water paid Bill
• Sewer Connection Proof
• Letter from Police is also required
for swimming pools hotels etc.
• Water Testing Reports
• Plan of the Premises
• Medical Certificates of Employees
and workers
• Proof of Property Tax
• Lal Dora Certificate, if applicable.

7. Documents required for various kind of licences/ registrations
business organization to carry out the restaurant business
EATING HOUSE
LICENSE
• Documents to prove the legal
occupancy of the place of Eating
House and in the case of tenancy,
NOC from the landlord
• Site Plan containing details of the
size of Eating House
• Photographs of the place showing its
usage as an Eating House
• Photocopy of Valid
NDMC/MCD/DCB/Airport Authority of
India trade license and free receipt.
• Residence proof of the applicant
• An affidavit on the stamp paper of Rs
10 duly attested by Notary Public
• Fire NOC, if the seating capacity of
the eating house is 50 or more
• Undertaken with regard to amusement
activities
• Undertaking regarding the
installations of CCTV Cameras with
30 days recording facility
SHOP AND
ESTABLISHMENT ACT
• Pan Card
• Identity Proof
• Address proof of the proprietor,
partner or the company
• Details of the employees
GST REGISTRATION
• Copy of Registered lease deed.Or
Rent Agreement and Electricity Bill of
the owner of property:
• Copy of Pan Card of
Proprietor/Partnership Firm.
• Copy of the Partnership Deed
• Copy of Aadhar Card of Proprietor/all
partners
• One passport size-photo of
proprietor/all partners/ directors.
• Mail ID and Mobile No. to receive OTP
& Verification links of all partners
• Latest Bank Statement/ first page of
pass book/ cancelled cheque
containing Name, Address and IFSC
Code of Branch of Bank.
• List of Item to be traded (if you want
to sell stuff over the counter also)
• List of Item to be traded/
manufactured
• Digital Signatures of authorized
partners/ directors
• Authority Letter in favor of dealing
partner/ director
CERTIFICATE OF
ENVIRONMENT
CLEARANCE (CEC).
• Restaurants are also expected to
apply for the Certificate of
Environment Clearance (CEC).
• In 2013, the National Green Tribunal
(NGT) shut down 34 restaurants in
Hauz Khas Village (HKV) and Delhi for
not following environmental norms.
• To obtain CEC one has to submit an
application along with
the Environmental Impact
Assessment Report (EIA) or the
Environment Management Plan (EMP),
details of public hearing and NOC
granted by state regulators.

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