With the ever growing population there are various hitches that are faced by Indians on a day to day basis. The main concern that lies with an average parent is whether their child would be able to crack the entrance exam of their interested stream. With the growing competition between the students, the examination boards have no other option but to raise the bar with respect to the difficulty level of the test to ensure that the top students are selected for enrollment in their colleges.

Every student has the ambition to do his best and obtain the highest possible score. However, this is not an easy task and, in most cases, not achievable without support and guidance of an experienced and knowledgeable mentor.

This article highlights the licenses and registrations that are required to be fulfilled if you believe that you have the right tutoring skills and have the intention to set up a coaching centre to show students the perfect route to take while preparing for the examinations.

Coaching Centre Registration Essentials

Coaching Centre has become an integral part of the education system in India. The popularity of coaching institutes has seen an increase of 35% over the past five years.

It is estimated that about 95% of the high school students take up coaching classes for most of the subjects.

It must be noted that if your intention is to conduct a small scale coaching centre, there are no licenses that’re required to be obtained.

But, if your coaching centre  intends to be the size of an institution, you would need to get a trade license and pay tax for the revenue generated through the centre.

If the income exceeds 9 lakhs per annum, registration of the business becomes compulsory and service tax becomes payable within 30 days.

Registration of your business would depend on the structure you would like to employ. The 3 main option that would be available are:

• Sole proprietorship
• Partnership
• Company

Must Read: Things to consider while setting up a Coaching Institute

Shops And Establishment License For Coaching Centre

Each of these business structures have their own form of registration requirements but an aspect that remains common to all three forms is the Shop and establishment license which is given by the inspector of that area.

All businesses are required to be registered under the Shops and Establishments Act with the inspectorate of that area. This must be done within a month’s time of setting up the business- subsequent to which a statement is to be issued to inspector.
This statement that you send to the inspector will contain-

• Name of the employer,
• The name and address of the business including the Postal Address,
• Category of business,
• Number of employees employed,
• Date on which the establishment commenced business.

Documents for registration under this act are-

• Commercial Address Proof,
• Identity Proof,
• Pan Card,
• Fee payment Challan.

The processing fee for this license is usually between 125 rupees  to 12,500 rupees-depending upon the number of employees and manpower you are employing for the business.

A license shall be issued immediately if all the details in the application are accepted.

Obtaining A Trade License For Coaching Centre

A trade license or a business license is a permit that is issued by government authorities which enables individuals or companies to conduct their business within the government’s territorial jurisdiction.

Basically, it allows the person who intends to start a business to do so legally.  Every geographical location or jurisdiction often requires its own localized license with respect to the various taxes imposed in the said jurisdiction, which explains why trade licenses vary between countries, states, and local municipalities.

• An application must be filed with the local municipal corporation of the area for obtaining a trade license.
• The license must be produced before the commencement of the business.
• The application must be received from the business establishment 3 months before the commencement of activity. Moreover, once a license is issued, it has to be renewed periodically to ensure that the business is being carried out in accordance with the local laws.

There are various documents that’re required to be provided and this depends on the place of the operation of the said business.

The place of business:–

• If owned by petitioner, the tax bill to be produced.
• If a tenant, the rent bill to be produced.
• If a lessee, the lease-deed to be produced.
• If relative/person granted rent free accommodation by the premises owner, consent letter from the owner to be produced.
• If a person is granted rent free accommodation by any bonafide tenant, consent letter- along with the current CE of the tenant to be produces.
• If a sub-tenant, the consent of the owner of the premises will also be needed to be produced along with documents viz. rent bill, current CE etc. of original tenant.

In case of Companies/Private Limited Companies, the following documents are to be produced along with the application:

• Memorandum/Articles of Association,
• Declaration in Form No. 32 which speaks of the number of managing directors of the company,
• Form No. 18 which speaks of the registered office of the company,
• Proof of occupancy.

In case of a Partnership Firm, the Partnership deed to be produced.

Along with the form and the documents, one has to provide an affidavit/declaration which certifies that in case of any discrepancies or any illegal activity on the behalf of the person or company who want to start a business, the certificate of enlistment will be revoked.

The Municipal Commissioner, after making necessary enquiries within thirty days of the receipt of the application, shall, if satisfied, grant the certificate of enlistment if the application is in order, or shall reject the application if it is not in order.

Opening A Current Account

Another step which remains common is to have a current account in your name or the name of your coaching centre in any nationalized banks.

Procedure:

• A service tax registration number and a VAT/CST number along with a letter from a CA stating- the nature of your business- letterhead having the firm’s name and address and stamp in the name of the proprietor.
• After you submit all these documents and registration copies to the bank, you can obtain a current account for your business.

You are required to have a minimum bale ranging from give to twenty five thousand in this account.

Service Tax Registration

The Indian government requires us to pay service tax if it is expected that the turnover would be more than 9 lakhs.

The application for such registration has to be filled through ST-1 form which can be submitted online after creating an account on the following page :

https://www.aces.gov.in/STASE/ui/jsp/common/registerWithACES.do

This’s all about Coaching Centre: Licensing and Registration norms for now. Did you find this post useful?  Let us know in the comments section below. Don’t forget to Share!

 

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