Procedure for Starting a Preschool in India

Preschools have become a bourgeoning business in India. You will be able to locate a
preschool with day care, crche, playschool with after school activities so on and so forth
in every nook and corner. Preschools have yielded high income and indeed are a lucrative
business to invest in. Though preschools yield a high income it is also important to note
that many preschools have failed to meet several ethical criterions along with key factors
that would otherwise contribute towards a successful preschool business. The criterions
to start a preschool in advanced cities will vary compared to the minor cities.

Business Plan
If you are planning to start a preschool or playschool, it is first recommended that a
business plan be prepared. The business plan for a preschool should comprise of the
details:

How many children you will cater to

Business Mode: Day care, preschool, playschool with afterschool activities,

crche etc

How many teaching, admin and support staff you need to hire

Funds required for renting, leasing, vehicles, salaries, equipments etc

Location and space

Infrastructure

Indoor and outdoor area

If the business will be full time or part time

Registrations & License

State Government have enacted laws like the Private School Education Acts which
regulate the operations of a school. Therefore, prior to starting a preschool or school, it is
important for the Promoters to know about the State Education Act and play to obtain
the relevant registrations.
Preschools can be setup as a for-profit or not-for-profit enterprise. If the promoters wish
to operate the preschool as a for-profit enterprise, then it is advisable to incorporate a
private limited company or a Limited Liability Partnership. In case the promoters wish to

operate the preschool as a not-for-profit enterprise, then a Section 8 Company or a Trust

can be registered.

Loan for Starting Preschool

Arranging for funds to invest in your preschool business is crucial. Depending on how
big or small your preschool is going to be you will need to arrange for funds accordingly.
Banks are favorable for lending to establish a preschool, with Banks such as Bharatiya
Mahila Bank operating special scheme for funding of Day Care Centers.
Bharatiya Mahila Bank: Parvarish Loan For Day Care Centre:

To assist women to establish Child day care centre, for purchase of utensils,
equipment etc

Collateral Free to be covered under CGTMSE

Loan repayment in 5 years

Age of applicant min 21 years and max 55 years

12% Rate of Interest

Banks would typically provide loans for creations of items such as building, interior,
furniture or equipment. Banks cannot fund operational expenditure such as staff salary,
maintenance, rental, utility bill, etc., Therefore, it is important that the promoters draw
out a cash flow statement for atleast one year and syndicate bank loan for investment in
long-term assets (building, furniture, etc.,), which can be funded by the Bank. Any
shortfall in operational expenditure would have to be supported by equity funds of the
promoters.

Choosing the Right Location & Infrastructure

It is very important to invest time in looking out for the right location and adequate space
to set up the preschool business. The preschool should be located in a child friendly area
and the space should be adequate to set up infrastructure accordingly. For a school,
cleanliness and hygiene are very important, so ensure that the location is well maintained
and does not possess any health risk.
Also, in case the location where the preschool is setup is not a own premises, enter into a
long-term lease or rental with the landlord to ensure that the investment in terms of
infrastructure and business development are not jeopardized.

Service Tax Applicability for Schools

Once the school begins operations, compliance with tax regulations must be maintained.
Each year, income tax on the profits of the preschool may be applicable based on the type
of entity established by the promoters (viz., for profit or not for profit).
However, service tax is not applicable for a school as it is included in the negative list.
The following items are a part of the service tax negative list and thus exempt from
service tax:
1. Pre-school education and education upto higher secondary school or equivalent;
2. Education as a part of a curriculum for obtaining a qualification recognized by
any law for the time being in force;
3. Education as a part of an approved vocational education course;.For help
starting a preschool, visit IndiaFilings.com to get a free consultation from an
IndiaFilings Business Advisor.

Guide to Indian Private Limited Company for

Foreigners Foreign Nationals and Foreign
Companies
India as one of the fastest growing economies in the world attracts plenty of Foreign
Direct Investment (FDI) and Private Equity capital. According to a recent report by
Nomura, a Japanese Brokerage firm, FDI into India is likely to have hit high of $34.9
billion in financial year 2015, a massive 61.6 per cent jump from $21.6 billion in the
previous fiscal. With the worlds second largest population and a large talent pool of
skilled IT professionals, India continues to be an attractive destination for investment
amongst Foreign Companies and Foreign Nationals. In this article, we provide a
comprehensive guide to Indian Private Limited Company and India entry strategy for
foreign nationals and foreign companies.
Overview of India Entry Strategies for Foreign Companies / Foreign Nationals

Following are the available types of entry strategies into India:

Incorporation of a Private Limited Company or Limited Company

Incorporation of a private limited company is the easiest and fastest type of India entry
strategy for foreign nationals and foreign companies. Foreign direct investment of upto
100% into a private limited company or limited company is under the automatic route,
wherein no Central Government permission is required. Hence, incorporation of a private
limited company as a wholly owned subsidiary of a foreign company or joint venture is
the cheapest, easiest and fastest entry strategy for foreign companies and foreign
nationals into India.

Incorporation of a Limited Liability Partnership

Incorporation of a Limited Liability Partnership (LLP) is not recommended as an India

entry strategy for foreign nationals or foreign citizens as it requires Government
approval. Limited Liability Partnership is a new type entity, recently introduced in India.
Hence, any foreign investment into a LLP requires prior approval from the Central
Government.
Through Proprietorship Firms or Partnership Firms

Proprietorship firms or Partnership firms are the most basis types of business entities
mostly used by very small businesses or unorganised players. Foreign investment into a
proprietorship firm or partnership firm requires prior RBI approval. Hence, proprietorship
firms or partnership firms are not suitable for foreign company or foreign national
investment into India.
Registration of Branch Office, Liaison Office or Project Office

Registration of Branch Office, Liaison Office or Project Office requires RBI and/or
Government approval. Therefore, the cost and time taken for registration of branch office,
liaison office or project office for a foreign company is higher than the cost and time
associated with incorporation of a private limited company. Further, foreign nationals
cannot open branch office, liaison office or project office. Hence, this option is limited to
being an India entry strategy only for foreign companies.
FDI in Private Limited Company

Foreign Direct Investment (FDI) into an Indian Private Limited Company or Limited
Company is allowed upto 100% in most sectors. Only a very few sectors require prior
Central Government approval for investment by foreign company or foreign national.
The following sectors require Government Approval for investment by Foreign Company
or Foreign National:
1. Petroleum sector (except for private sector oil refining), Natural gas /
LNG pipelines.
2. Investing in companies in Infrastructure
3. Defence and strategic industries
4. Atomic minerals
5. Print Media
6. Broadcasting
7. Postal Services

8. Courier Services
9. Establishment and operation of Satellite
10.Development of Integrated township
11.Tea Sector
12.Asset Reconstruction Companies
Incorporation of Private Limited Company for Foreign Companies and Foreign
Nationals

The following are the steps involved in the incorporation of a Indian Private
Limited Company for foreign nationals or foreign companies:
Management and Shareholding Structure

A private limited company must have a minimum of two Shareholders and two Directors.
A shareholder can be a person or a corporate entity. However, a Director has to be a
person. Foreign nationals are allowed to become Directors of an Indian Private Limited
Company.
The Board of Directors of the Indian Private Limited Company must have one Director
who is both an Indian Citizen and Indian Resident. However, there is no requirement for
the Indian Director to be a shareholder in the Company. Hence, most foreign companies
or foreign nationals prefer to incorporate a company in India with three Directors two
Foreign National Directors and one Indian National Director.
The 100% shares of the Indian Company can be held by a combination of Foreign
Companies and/or Foreign Nationals. Indian private limited companies require a
minimum of two shareholders mandatorily. Hence, one corporate entity or person cannot
hold all the shares of an Indian Private Limited Company.

Indian Company Structures with Foreigner Stakeholders

Obtaining Digital Signature for Foreign National Directors

A digital signature is required for filing the incorporation documents and continued
compliance documents for a company. Hence, Digital Signatures must be obtained for
one or more Director(s) of the company. The following video is a guide to submitting
Digital Signature application:
The following are the documents and information required for obtaining Digital
Signature for a foreign national:
1. Foreign national is residing in native country
o

If native country is a signatory of Hague Convention: For

attestation, proof of identity, address proof and photo on DSC
application should be notarized by the Public Notary of that
foreign country and apostilled by the competent authority of
that foreign country.

If native country is not a signatory of Hague Convention:

For attestation, proof of identity, address proof and photo on
DSC application should be notarized by the Public Notary of that
foreign country and consularized by the competent authority of
that foreign country . Documents required: Passport, Application
form with Photo (all attested).

2. Foreign national residing in India

o

The following documents should be certified by Individuals

Embassy

Resident Permit certificate issued by Assistant Foreigner

Regional Registration. Officer, an officer of Bureau of
Immigration India.

Passport

Visa

Application form with Photo(attested)

3. Foreign national neither in India nor in the native country

o

The following documents should be certified by the local

embassy of the country to which the person belongs:

Passport

Visa

Application form with Photo(attested)

Obtaining Director Identification Number and Name Approval

Once Digital Signature(s) are obtained for the Director(s) of the proposed company,
Director Identification Number (DIN) must be obtained for all the Directors. As per the
Companies Act, 2013, a Director Identification Number is required for every individual
intending to become a Director or a Company in India. Once, digital signature is
obtained, DIN can be obtained for the Director(s) quickly and easily. Click here to know
more about Director Identification Number.
Once, two DIN numbers are available, name approval can be obtained for the proposed
Company. Click here to know more about Naming an Indian Private Limited Company.

Filing for Incorporation of a Private Limited Company

Once name approval is obtained, incorporation documents can be filed with the Ministry
of Corporate Affairs to incorporate the Company. The incorporation documents to be
filed includes affidavits & declarations from Directors, Memorandum of Association
Subscriber Sheet, Articles of Association Subscriber Sheet and Registered Office Address
proof.
The affidavit and declarations from the Directors contain certain declaration from the
Directors. Affidavit and Declaration would have be executed independently for each of
the Director and notarized (For Indian Director & Foreign Director).
Subscribing to the Memorandum of Association (MOA) & Articles of
Association (AOA)

By subscribing to the MOA & AOA, the shareholders (either foreign companies or
foreign nationals or Indian companies or Indian national) show their intention for
becoming a shareholder in the company to be incorporated. The following video shows
how the subscriber sheet of a Memorandum of Association is executed:
In case a Foreign national is signing the MOA & AOA Subscriber Sheet in India:

In case a foreign national is signing the subscriber sheet of the

MOA & AOA in India: Then the signature of the foreign Director must
be verified by the public notary of that country or by the Officers of the
Embassy. A copy of a valid business visa to India must be attached.

In case a Foreign National is signing the MOA & AOA Subscriber Sheet while
residing outside of India:

The residing country is a Commonwealth Nation: Then the

signature of the Director, identity proof and address proof must be
notarized by a Notary in that part of the Commonwealth.

The residing country is a party to the Hague Apostille

Convention: Then the signature of the Director, identity proof and
address proof must be notarized by a Notary of the country of his
origin and duly apostillised in accordance with the Hague Convention.

The residing country is neither a Commonwealth Nation nor a

Party to the Hague Convention:Then the signature of the Director,
identity proof and address proof must be notarized by a Notary of the
country and the certificate of the Notary must be authenticated by a
Diplomatic or Consular Officer.

In case a Foreign Company is a subscriber to the MOA & AOA of the proposed
Indian Company:

The following documents pertaining to the foreign entity subscribing to the shares of the
Indian Company must be submitted:

Board resolution of the Foreign Entity authorising investment in shares

of the Indian Company.

Copy of the certificate of incorporation of the foreign entity.

Copy of address proof for the foreign company.

On submitting the above documents along with the application for incorporation of a
company, the Registrar would issue a Certificate of Incorporation for the Indian Private
Limited Company, if the documents submitted are acceptable.After obtaining the
incorporation certificate, the Indian Company can apply for a PAN Card and take the
necessary steps for opening a bank account for the company in India. The following
video shows the procedure for applying for PAN for a private limited company:
To start a private limited company in India, visit IndiaFilings.com

Trademark Registration in India

A trademark is any unique expression related to a product or service that distinguishes it
from others. This expression could be a word, slogan, photograph, logo, graphic, colour
combination, sound or even smell. Owners of trademarks have exclusive rights to their
use under the categories they are registered in (there are a total of 45 categories, called
classes). Trademark registration enables owners to easily establish their right to the
trademark in court and earn royalties. It also deters piracy and prevents similar names
from being registered by other businesses. In India, you could get a within three days,
but it takes up to two years for it to be registered so that you can use the symbol.
Standard Registration
Use Your TM in 3 days
Inclusions:

Trademark Search

Authorisation Letter Drafting

Discussion & Advice on Class

Final Application

Regular Status Updates

Rs. 1999 + government fees

Advantages of Trademark Registration
Legal Protection

If you believe your registered trademark is being infringed, it is easy to establish your
right to it in court. If you haven't registered the word, slogan or logo, you would not be
able to do so. Particularly in sectors in which piracy is rampant, trademark registration is
essential.

Business
Opportunity

A trademark is an intangible asset that can be enormously valuable, should your brand
succeed. Think of Tide, Nike or McDonald's. Businesses can earn huge money in
royalties through licensing agreements or even transfer ownership to interested parties
through assignment agreements.

Unique Identity

You would want your customers to identify your products or services with yours only.
Registering your trademark is the first step toward ensuring this. The court would then
stop any similar words or slogans from being registered.
Trademark vs Copyright vs Patent
Trademark

Copyright

Patent

Provisional
Patent

Applies to

Words, logos,
slogans

Photographs,
Inventions &
movies, music,
ideas
software code

Unfinished
inventions &
ideas

Applicants

Business
owners

Artists &
creative
professionals

Inventors &
designers

Ownership
Without
Registration

Inventors &
designers

Yes, but rights Yes, but rights

are limited
are limited
1 year

Validity

Indefinite, but Lifetime of the

to be renewed author, plus 60 20 years
every 10 years years

Trademark Registration Procedure

It takes just three days to file a trademark application, following which you can start
using the symbol. The Trade Marks Office, however, takes around two years to
register your trademark. Click here to find out more about the trademark registration
process:
Trademark Search
Time to Complete: 2 hours

We first run a trademark search to check whether your unique name or logo or one

sounding very similar to it has already been taken. Once it is confirmed, you must make
the payment for the entire process. We will then send you an authorisation letter, which
you must sign and return to us so that our lawyers can file your trademark application on
your behalf.
Trademark Application
Time to Complete: 3 working days

This form asks for basic details about you (or your business, in case the trademark is
being registered in its name), and the logo, word, slogan you're registering. Pictures must
be sent in the JPEG format only. Trademarks must be registered for a particular sector. So
if you want to register a trademark in multiple categories, we need to file multiple Form1s and you would have to pay for them separately. As soon as the form is filed, you can
start using the symbol.
Trademark Registration
Time to Complete: 18 to 24 months

The Trade Marks Office will first check your application to see if it's already been taken.
If it has, a trademark objection will be raised. The government may also object if it finds
the logo obscene, hurts religious sentiments or believes that it is likely to cause
confusion. If it has no objection, it makes an advertisement in the Trade Marks Journal. If
there is no opposition from other businesses in the next four months, your trademark is
registered around six months later. We will check the status of your application regularly
over the entire 18 months and keep you up-to-date on the status.

What is a Trademark?

A Trademark generally refers to a brand or logo.

Trademark registration can also be obtained for a business name, distinctive catch
phrases, taglines or captions.
Properly used and promoted, a Trademark may become the most valuable asset of a
business. Trademarks such as Coca Cola, HP, Canon, Nike and Adidas serve as an
indication of origin of the goods as well as an indication of quality.

It is also essential to obtain trademark registration for the business name/trade name
under the Trademarks Act. Registration of a company or business name under the
Companies Act does not in itself give protection against others who might commence
using identical or similar marks.
Use of TM, SM and symbols
'TM' stands for Trademark and 'SM' stands for Servicemark. The use of TM and SM
symbols notifies the public that the company is claiming exclusive ownership of the
trademark and can generally be used by one who has filed a trademark application.
The symbol, can be used only once the trademark is registered and the registration
certificate is issued. Also, you may use the registration symbol only in connection with
the goods and/or services in respect of which the trademark is registered.
The registration process is the same for both trademarks and servicemarks.
Trademark Registration Process

Upon filing of the application, the registry will issue us with an official receipt with the
filing date and number allotted to the application. The application is then formally
examined by the Indian Trade Marks Office, as to its inherent registrability and/or any
similarity with existing marks. If an objection to registration is raised, an official
examination report will issue. To overcome the objection, it is necessary to file a written
response or presenting evidence of acquired distinctiveness and in most cases, an
interview/hearing with the examiner is posted. The Registrar may require the applicant to
file an affidavit testifying to such user with exhibits showing the mark as used.
If, following examination, the trade mark application is considered allowable, a Letter of
Acceptance (TLA order) will issue, after which the trademark will be published in the
Trade Marks Journal. If there are no oppositions within 4 months from the date of
advertisement in the Trade Marks Journal, then the trademark registration certificate will
issue.
Trademark Registration is a tedious process and it takes around 18-24 months to obtain
registration in a straight-forward case, without any objections or oppositions. However,
once the trademark application is filed, an application number is allotted immediately
and the priority starts from the date of application.
Once the trademark is registered, it is valid for a period of 10 years from the date of
application. The registration can then be renewed indefinitely as long as the renewal fees
are paid every 10 years.

International Trademark Registration

Trademark registration is territorial in nature. Separate applications need to be filed
in each country where you wish to register your trademark.
If you plan to sell and market internationally, it is essential to register your trademarks in
those countries. Usually, the party who first registers a mark owns it. Therefore, it is
significant to register your trademarks in each country your company considers to be a
potential and key market. A national trademark registration stops at the border and does
not afford rights to the owner of the trademark outside the country in which it is
registered.
Most companies expanding into other countries often realize the value of registering their
trademarks abroad once it is too late, that is, once they are faced with
counterfeiters/imitators or once they are accused of infringing the rights of others. The
risks of doing so are very high and the consequences may be extremely costly and
detrimental to a companys entire business and export strategy. It can be a severe
financial liability to invest in a brand, promote it in the local market, then find that the
brand cannot be registered and used internationally and have to finally abandon that
investment.
1. Registering a trademark abroad renders the company an exclusive right to
commercialize its products in those markets.
2. This not only provides a solid foundation to stop counterfeiters but also ensures that
the company enjoys exclusive rights over what may be one of its most valuable business
assets.
3. Registering a trademark abroad also provides the opportunity to license the trademark
to others or may be the basis for a companys franchising or merchandising strategy.
Thus, the benefits of international registration and protection of one's trademark
clearly outweigh the costs of such registration.
International Application under Madrid Protocol
India has joined the Madrid protocol with effect from 8th July 2013. The Madrid system
for the international registration of trademarks provides one single and cost-effective
procedure for the registration of a mark in several territories.
At present, there are 91 countries which are members of the Madrid protocol. The
following link shows the members of the Madrid system:
http://www.wipo.int/export/sites/www/treaties/en/documents/pdf/madrid_marks.pdf

In order to file an international application under the Madrid protocol, there should be a
corresponding trademark application filed in India.
In a single international application under the Madrid protocol, several countries may be
designated which are members of this system. The fees will depend based on the number
of classes and countries designated.
The fees can be calculated using the online tool by choosing Office of origin as India,
selecting the number of classes and specifying whether the mark is in colour:
http://www.wipo.int/madrid/en/fees/calculator.jsp
In addition, a handling fee of Rs. 2,000/- is payable to the Indian Trade Mark Registry.
Upon filing the application, the mark is examined by each designated member country
where registration is sought and then proceeds to registration.
An international registration under Madrid protocol is however dependent on the
corresponding Indian application for a period of five years from the date of international
application.
If you wish to obtain registration in a country which is not a member of the Madrid
protocol, separate national trademark application has to be filed directly in the respective
country.
Advantages of filing an International Application under Madrid protocol
1. Lower costs compared to individual foreign filings
2. Managing renewals, change in address, change in ownership is easier and more costeffective
3. Additional countries may be designated at a later stage