In this blogpost, Mansi Arora, Student of Delhi University and of the Diploma in Entrepreneurship Administration and Business Laws by NUJS, writes about the business plan and the legal requirements for starting a play school in India.
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In the recent years, India has achieved milestones of success in the economic sector by becoming the tenth-largest in the world by nominal GDP and the third-largest by purchasing power parity; and has witnessed significant social development with rising levels of literacy and social awareness. Where a fast growing economy has generated numerous opportunities and created a favorable environment for businesses to flourish, the rising social awareness has led to a demand for quality education for all age groups including the formative years of a child. The Right to Education Act enacted by the Government of India in 2009 provides for free and compulsory education for children between 6 and 14 in India under Article 21A of the Indian Constitution. Though children below the age of 6 are beyond the scope of the fundamental Right to Education; the act does address early childhood care in Section 11 of the Act by stating that “the appropriate government may make necessary arrangement for providing free pre-school education.” In pursuance to this, the Government of India has signed a convention for implementing Early Childhood care and Education Scheme for free playschool education. As per the Law commission Report No.259 Early Childhood Development and Legal Entitlements “The National Early Childhood Care and Education (ECCE) Policy, 2013 envisions a holistic and integrated development of the child with a focus on care and early learning at each sub-stage of the development continuum, in order to promote all-round development.” However, The ECCE scheme is yet to be implemented.

As per the 2011 Census, Children in the age group of 0-6 years constitute 158.7 million that is about 16% of the total Indian population. Henceforth the increasing demand and rising importance of preschool education for shaping a child’s personality and laying the foundation of his/her character has made setting up a Playschool a lucrative business opportunity. This article shall dwell upon the Business structure for starting a play school in India and elaborate upon the various foundations it lies on.

Business plan/ outline

For setting up a playschool, first and foremost a Business plan must be prepared to take into consideration all important issues and challenges. This shall serve as a blueprint for guiding further course of action and include details like the

  • Number of children to be catered to
  • Location & Infrastructure: The selected area should be well maintained, safe for children and adequate to set up the infrastructure. A playschool can also be started from a residential area which fulfills safety requirements.
  • Business Mode of the playschool: whether it is Full time or part time or Daycare, playschool with afterschool activities, etc
  • Financial considerations/Budget in relation to Investments for infrastructure, supplies, equipment, advertising, etc of the playschool and whether a loan needs to be arranged. For instance, the Government has come up with schemes providing a loan to women entrepreneurs for establishing a preschool or child day-care centre by Bharatiya Mahila Bank and Punjab National Bank called the BMB Parvarish loan scheme which requires loan repayment in 5 years and a 12% rate of interest.
  • Recruiting of Teaching and administration staff: As per National council for Teacher Education (NCTE) guidelines, a preschool teacher must have a Secondary School certificate or its equivalent and preferably a Diploma/Certificate in Pre-school teacher education programme of not less than one year, or B.Ed.
  • Deciding Curriculum be taught and followed in the school, for instance, the Montessori Method of education that focuses both on social interaction and academics.
  • Advertising and marketing

Formations of entity

Profit/ Non- profit enterprise

Preschools can be set up as profit or nonprofit enterprises.
In the case of the playschool being a Profit making enterprise, it is advisable to incorporate it into a private limited company or a Limited Liability Partnership.

In the case of the playschool being a nonprofit enterprise, a Company or a Trust can be registered under Section 8 of the Companies Act 2013, which pertains to a established company  ‘for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object’, provided the profits, if any, or other income is applied for promoting only the objects of the company, and no dividend is paid to its members.

 

Franchise/ setting up one’s institution

For starting a Playschool; one can either choose a franchise or set up one’s own institution

Franchise

In the case of the Franchise, one needs to enter into an agreement with the parent organization and abide by the terms and conditions of the same. In India, there is no specific law on the regulation of franchised businesses. Chapter 5 of the Finance Act defines ‘franchise’ as “an agreement by which the franchisee is granted representational rights to sell or manufacture goods or to provide service or undertake any process identified with franchisor, whether or not a trademark, service mark, trade name or logo or any such symbol, as the case may be, is involved.” Franchise arrangement is therefore largely contractual in nature and governed by The Indian Contract act 1872. Moreover,  Laws relating to intellectual property, (includes Copyright, Trademark Act, Patent, etc) Taxation, Sale of Goods, Property Laws, Insurance Law and Labour Laws also apply to franchise transactions.
In the last decade, Franchising in the pre-school sector has grown. Different organizations of Playschools have different criteria mostly in relation to investment, location, training, etc; these along with curriculum and support are usually listed on their websites and can also be availed with the help of various play school consultancies. As compared to setting up one’s own institution, a Franchise involves less risk as they have an already established brand name and offer support in selecting a location for playschool, hiring trained staff, developing good curriculum, marketing, purchasing school equipment, promotions, support in organizing events, etc. However, the franchise agreement needs to be carefully drafted keeping in mind interest of both parties.

Setting Up One’s Own Institution

A new institution can be set up either as a proprietary concern or Partnership or as a company. Where a company needs to be registered with the Ministry of Corporate affairs and is governed by The Companies Act 2013, A Partnership deed is governed by The Partnership Act 1932. It is usually easier to form a partnership, as it is cheaper and quick to register.
The advantage of Setting up one’s own institution is that the investment for setting up preschool is lesser as no amount has to be paid as franchise fees or royalty later. Also, there is greater control and opportunities for innovation which would be difficult to exercise in case of a franchise.

Residential Playschool

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A playschool can also be started from a place of residence. For this, the permission of cooperative housing society or apartment association would be needed. Furthermore, in case the residential area is acquired on rent/lease, the purpose of using the residential area for running a play school should be clearly mentioned in the lease agreement.

Legal requirements

There is no specific legislation or certification for setting up a play school in India. However, laws like the Private School Education Acts enacted by the State Government needs to be thoroughly considered as they may require registration and licensing of playschool. Moreover to set up a playschool in an independent premise, the formalities related the Municipal Corporation and education department of the city where the play school is being set up need to be completed and the respective application and registration fee is to be paid. For instance in Maharashtra, The Maharashtra Preschool Centres (Regulation of Admission) Act. 1996 provides for compulsory registration of preschools.
Similarly, In Tamil Nadu The District Elementary Educational Officer is the Competent Authority for the approval as per Draft Code Regulations for Play schools 2015
It is proposed that The ‘Early Childhood Care and Education (ECCE) Policy’ along with regularizing the curriculum and learning tools for children, shall also make registration and accreditation of playschools mandatory

Other Regulations

The Shops and Establishments Act, in general, is silent in case of a playschool, that is a play school need not be registered under the said act, however as the regulations are different for every state, the act of the state where the preschool is proposed to be set up needs to be carefully studied and verified in order to reach to any conclusion.

Similarly in the case of Labor Laws, the respective state act needs to be followed:

For instance, the minimum wages for primary schools is Rs. 80 per day but these tend to vary from state to state and are to be accordingly paid. Also In case of the number of employees being more than 20, Employees Provident Fund schemes and Payment of Bonus Act, 1965 are to be considered

Service Tax Applicability for Schools

As per clause (l) of Section 66D of the Finance Act, 1994 service tax is not applicable for a playschool as it is included in the negative list

Conclusion

In today’s era of increasing competition and demand for quality, starting a Playschool in India is not only a lucrative business opportunity but also a Social and ethical responsibility which along with economic gains provides a sense of moral satisfaction and fulfillment. Thus by carefully formulating a business plan; choosing the suitable form of entity and considering applicable legal requirements, A playschool can be successfully started in India.

 

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112 COMMENTS

  1. Hello Mansi,
    I’m planning to open a playschool at my place , can you please suggest me all the legal formalities that needs to be taken according to U.P state law.. I’m planning to open a playschool in lucknow. I hold a degree of B Ed and I’m in this teaching field from past 6 years now I want to have something of my own.. Please guide me. You can reach me at 9527427637

  2. I want to open preschool in Bangalore. Can you please help me with formalities and other detailed process. Kindly share the details in email

  3. Hi, I am Prajuktika and I live in Uttarpara ,a small town in hooghly,west bengal.I also want to start a playschool (play group to kg) in my house,which has a small garden in it.
    Please help me in regarding municipality rules and regulation and charges.

    With regards,
    Prajuktika

  4. I am in Vadodara . And I like to open a school in Vadodara but area is not under municipal
    Can you guide me abt it
    9925207355

  5. Hi, I stay in Mumbai. Would like to open preschool at my home. Can you pl help me with the procedures for the same.

    Karishma
    9773575450

  6. Hi I have a preschool in Badlapur, Mumbai. Previously I got the permission from the society to start the school in the premises. But now one of person in the society is just mentally giving harrasment to me.

    Please guide me in sorting out the problem.

  7. Hi I am Sanjana Goel I want to start my own play school at Samalkha, Panipat , Haryana . I have taken franchicy of KIDZEE
    please suggest what is the legal requirement and how i will open the same

  8. Hi,
    I want to open a pre-school in Dist Rampur, UP. Please can anybody let me guide on the legal terms and required permissions to be obtained for the same.

    Thanks
    Pravesh
    +91-9811425983

  9. Good information. The person who wishes to start a playschool must obey the terms and conditions what the government provides.

  10. I want to open my own play school without any frenchies and at low cost. Please give the knowledge about opening it and need any registration or certificate???

  11. I want to open my own play school without any frenchies and at low cost. Please give the knowledge about opening it and need any registration or certificate??? My c. No is 8650353499

  12. Hi, I stay in chembur Mumbai. Would like to open preschool. Can you pl help me with the procedures for the same.

  13. I am 100% agree with these legal terms and conditions for opening any initial level school in India.Thanks for such a wonderful article for users.

  14. Hi,

    I have my own premises in Noida & I want to open Play school.
    1. what is the Procedure to get register & License
    2. what are the legal formalities.
    3. How much cost are involved.
    4. Can I apply for Loan to open Playschool & from which bank we can opt the Loan.
    5. Documents required for the registration

  15. hi.
    i have good enough space for school near NH 57.
    in bihar district muzaffarpur .if anyone want to open school feel free to contact me 8777565568/9836031042

  16. Visit our website… We’ll guide you
    We do provide Franchise also at very reasonable cost as it’s an growing chain of preschool in delhi..

    Regards
    Amit Singh
    9650931931

  17. Hi!
    I am actually looking for your guidance to start a new pre School/play school in Pune, Maharastra.
    I want to have an idea about how to start with proper paperwork and all other information needed to start it like which staff should be employed and what qualifications they must have please contact be looking for your assistance.
    Thank you

  18. hello, my name is ravi priyadarshi from cambridge montessori pre school.our brand is 2nd in list of most profit making pre school in india,withe least capital investment and we charge no royality.i can give u the product information.call or whatsapp & call number 8955060059

  19. Hi I’m opening a kindergarten playway school in Ludhiana’s village. Place comes under panchayat . Can you pls help me what I need to do legally (registration).

  20. I want to open own play school in Gurgaon. Kindly advice and suggest about legal procedure for the same.
    How we can build the startup of play school.

    I have the location and building. Kindly support.

  21. Hi.. I want to open a playschool in Bangalore.
    Can u please tell me the legal formalities for the same.
    Thank you in advance,
    Contact me on – 9845969892

  22. Hi!
    I am actually looking for your guidance to start a new pre School/play school in Kerala.
    I want to have an idea about how to start with proper paperwork and all other information needed to start it like which staff should be employed and what qualifications they must have please contact be looking for your assistance.
    Thank you

  23. I want to open playgroup n nursery in Maharashtra can u please tell me which course shall i do and what will the legal process..

  24. I want to start a play school/pre school in mahindra world city , Chennai… what r the rules and regulations I have to follow … how much money I have to invest approximately…

    • 9711661669-ravi priyadarshi,cambridge montessori pre school-no royality-other three programm to generate extra revenue-

  25. I want to start a Pre School/Play School with Kindergarten in Kerala(Trivandrum). Now I am working in Dubai. I planned to settle in India next April(2019) onwards
    Whats up: 00971554477670

  26. I want to start a Pre School/Play School with Kindergarten. Now I am working in Dubai. I planned to settle in India next April(2019) onwards
    Whats up: 00971554477670

    • Dear Mr. Namita Dutt

      hi greeting from my end

      as you know i am joined in education industries just now as area sales manager in kidrockz international play school. as sourcing of new franchises.

      so please give reference of your friend or cologe who are interested to open our Brand franchisee and STATE FRANCHISE – in any ware in India.

      and please replay my mail id or my mobile number

      mobile no is : 7349683004

      thanking you
      with warm regards
      Kumar

  27. hello, my name is ravi priyadarshi from cambridge montessori pre school.our brand is 2nd in list of most profit making pre school in india,withe least capital investment and we charge no royality.i can give u the product information.call or whatsapp on 9711661669.

    • Dear Madam

      hi greeting from my end
      as you know i am joined in education industries just now as area sales manager in kidrockz international play school. as sourcing of new franchises.

      so please give reference of your friend or cologe who are interested to open our Brand franchisee and STATE FRANCHISE – in any ware in India.

      and please replay my mail id or my mobile number

      mobile no is : 7349683004

      thanking you

      with warm regards

  28. Hi, Mansi !
    I wanted to start a new play school could you please provide me the details of how and where to register and about other leagal process.
    Thank You.

  29. Hi Mansi,

    I would like to start day care and preschool please send me the details like what are the procedure and certificate required for registration, plz send me through email. Thank u

  30. Hi Mansi ,

    Your article is really helpfull , thankyou so much .
    I want to open my own playschool in Bangalore yehlanka, can you please let me know the legal documents required and how and where to do the registration.

    Email id [email protected]

  31. Namaskar
    I plan to open a preschool for children in my village Jajpur Odisha. Teaching will be free for them. Legal and administrative procedure for registration of school.
    Mobile. 8917266965
    Prema Narayan Dash

  32. Hi,i m megha. I want to open my own play school we r three partners could u plz guide us wt is doucument required for d registration or affilation nd wt d amount have to pay nd from where we have to take permission .thanks

  33. Hi Mansi,
    Mansi here from Bhubaneswar-Odisha. Looking forward to start a Play School along with Day Care. We do have proper Infrastructure for the same. Kindly guide please.

    I need also working partner for it;if any interested contact Email= [email protected]

  34. Hello Mansi,
    Thank you for putting together all this information, its really helpful.
    I’m considering opening a playschool in Mumbai. What else should I know about or consider or have in my list of to-dos apart from what you’ve mentioned in your article?

  35. Hi, I am Abdul from UP. I want to open a day care centre, I want to know what are legal formalities require to open a day care centre.
    Pls help me

  36. Hi Mansi,
    Mansi here from Jaipur. Looking forward to start a Play School along with Day Care. We do have proper Infrastructure for the same. Kindly guide please.

  37. Hiii I am interested to start a Day care and play home in bangalore. Can u plz tell me how can I get the registration and licence.where is the office in e city .6361137371

  38. Hi this article was very informative.. I am planning to start up a preschool and daycare in palakkad-kerala. What are the legal formalities required. How much cost are involved. We which is more expensive franchise or our own? Approximately how much find is required to start up?

    • Dear Mr. Jiji sreejith

      hi greeting from my end

      as you know i am joined in education industries just now as area sales manager in kidrockz international play school. as sourcing of new franchises.

      so please give reference of your friend or cologe who are interested to open our Brand franchisee and STATE FRANCHISE – in any ware in India.

      and please replay my mail id or my mobile number

      mobile no is : 7349683004

      thanking you

      with warm regards

  39. Hi harpreet kaur and I want to open a paly school in tilak nagar-New Delhi I need to understand what documents are required to open a play way/daycare school. 9999504407.plz tell us what is different between play schoo or day care registration/docomantation

  40. Hi I’M Shane Bari and I want to open a paly school in Okhla-New Delhi I need to understand what documents are required to open a play way/daycare school. 9810969597

  41. Hi, I am Bhavika Mewani from Maharashtra.. I want to open a day care centre, I want to know what are legal formalities require to open a day care centre.
    Pls help me

  42. Hi,
    We are running a preschool from past 1 Year’ and having 100 students enrolled with us.
    Plz advise on leagal registration/licence required for our school

  43. I want to open a play school in bangalore, can you help with respect to the documents and initial budget requirement.
    Contact: 7411435937

  44. Madam you really described very keenly…
    Thanks so much for every information you mentioned…
    That will really help many people.

  45. We want to start a play school in Kolkata, west Bengal. Please give me some suggestion about the play school registration.

  46. I belong to Dharmapuri district in Tamilnadu state. Am willing to start a preschool. What are the terms and conditions to start? What are the papers to be submitted to the government?

  47. Hii mansi
    i find your post much more helpful than any other information by anyone else . I am very much happy to all the deep information at one place i extend my hearty thanks to you .
    Keep helping us like this only .

  48. Hi,
    We are running a preschool from past 2 Year’s and having 200 students enrolled with us.
    Plz advise on leagal registration required for our school

  49. I want to make preschool setup in Mohali Punjab at my own residence . Is it possible and what r the legal formalities that has to be go through? Secondly how much minimum investment has to be required?

  50. Am from Chennai. I would like to start a day care & pre kg along with after school activities. Need help regarding legal procedure.

  51. I m from mumbai and i want to start a pre school so whats the legal procedure to start a pre school.?

  52. I belong to chandigarh and willing to open nursery Jr. Kg sr. Kg.
    What kind of legal process should be followed and certification etc.

  53. Hi, I want to open a pre primary school in Rajasthan. So registration will be required for this??
    I m totally confused because some r saying it is required some say no. What is correct actually?? Pass help me.
    Thanks

  54. I belong to a village of Maharashtra and willing to open nursery Jr. Kg sr. Kg.
    What kind of legal process should be followed and certification etc.

  55. Hi Mansi,
    I have a concern with a playschool where my daugher is enrolled. The place is untidy and not clean. Recently municipality has cut sewage connection for arrears and today there is an advt. for hiring of principal and teachers.
    My daughter has frequently got ill after visiting this playschool and i have stopped sending her there.
    I have written to the playschool authorities via email but have not received any response. I believe this is a company owned outlet and not franchisee.
    How do i raise an issue to ensure my money is refunded back
    Regards,
    Kartik

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