04 February, 2017

Print to PDF

How to Start School Business?

How to Start School Business?
  1. Introduction
School is institution for educating children. School helps guide youngsters though the establishment of a daily routine, which is of utmost importance as we direct them toward the workplace, and as they become productive members of society. Students are provided with access to new ideas, including science and language, and are given the opportunity to learn more about world cultures, geography, and personal history.
C:\Users\Gravita\Desktop\Clients\How to start(start ups)\Photos\the_school.jpg
In India a school is considered a non-profit initiative but the business opportunities available in this case are substantially low. Several NGOs working in the domain of education have stated that in Delhi at least 1.4 billion kids get admitted to schools in different classes every year.

  1. Registration of School as Legal Entity
In India, as per laws private organizations cannot open schools in India. The schools have to be operated by
  1. A society that has been created in accordance with the Societies Act of 1860 or
  2. By a trust that has been organized as per the Public Trust Act of individual states
  3. A private entity can registered itself as a company under section 25 of The Companies Act, 2013

  1. Licenses required for starting a business
Requirement of license may be changed from state to state because starting a school in any state is under the purview of state education law of respective states. Here we take an example of starting a business in Delhi. Following are the licenses required for starting a school in Delhi:

Name  of Licenses
Governing Act
Regulating Authority
1.
Registration certificate of society or
Societies recognition Act, 1860


Registration certificate of trust
Under public trust act (respective state)
Registrar having jurisdiction over the region
2.
Essentiality certificate
Delhi Education Act, 1973
Directorate of education.
3
Certificate of Recognition
Delhi Education Act, 1973
Directorate of education / municipal corporation of India.
4.
Certificate of Upgradation
Delhi Education Act, 1973
Directorate of education.
5.
Certificate of Affiliation
Affiliation bye laws
CBSE or CISCE or State Government Board.
6.
Certificate of MCD

MCD.
7.
Affidavit regarding proper purchase of land and no violation of master plan in the land used

MCD/DDA
8.
Site plan for the building sanctioned

MCD/DDA Approved
9.
Building fitness certificate

MCD
10.
Health Certificate

MCD
11.
Water testing report

Delhi Jal Board
12.
Completion certificate

DDA
13.
Duly Approved Scheme of management

Directorate of Education.
14.
No Loan Certificate against FD issued by Bank

Bank
15.
Land use permitted certificate (in case of rented land)

Landlord

  1. Other aspects for Starting a School
    1. Time Period for Starting a School
Under normal circumstances, it takes a year to start the school’s construction after creating the governing body but it often takes more than a couple of years as well. The infrastructure for the school can be completed within a period of 6-7 months following which the school authorities have to make applications for recognition.
    1. Fee Structure and Facilities
Fee structure and facilities need to be decided well in advance when you submit your business plan. You need to plan the fee structure that is convenient for parents and gives you profit too. You can also apply for government grants if you wish too.
    1. Understand the Expectation of Parents
Once you are all set for admissions, you need to understand the parents’ expectations and provide counsel to them. Expectations at a high school level are different from those at the playschool or primary level.
    1. Marketing
Marketing is an important aspect. Develop a complete and attractive website for your school. You also need to advertise through hoardings, handouts and other media. Advertising gets you a good response.

  1. Taxability
  1. Under Income Tax
As per section 10(23C) of The Income Tax Act(herein after referred as “The Act”), 1961
Income from educational institution is exempt. Relevant Sections of The Act are as follows:
(iiiab) Any University or other educational institution Any University or other educational institution existing solely for educational purposes and not for existing solely for educational purposes and not for purposes of profit, and which is wholly or substantially purposes of profit, and which is wholly or substantially financed by the Government.
(iiiad) Any University or other educational institution Any University or other educational institution existing solely for education purposes and not for existing solely for education purposes and not for purposes of profit if the aggregate annual receipts of purposes of profit if the aggregate annual receipts of such university or educational institution do not such university or educational institution do not exceed the amount of annual receipts as may be exceed the amount of annual receipts as may be prescribed. (Amount prescribed is Rs. 1 Crore) prescribed.
vi) Any University or other educational Any University or other educational institution existing solely institution existing solely for educational purposes for educational purposes and not for purposes of profit, other than those and not for purposes of profit, other than those mentioned in (mentioned in (iiiab) or sub clause or sub clause (iiiad) and which) and which may be approved by the may be approved by the prescribed authority.
  1. Under Service Tax
As per Notification No. 25/2012 of Service Tax the following services are exempt from the whole service tax leviable thereon under section 66B namely:-
Services provided,-
         (a) by an educational institution to its students, faculty and staff;
(b) to an educational institution, by way of,
(i) transportation of students, faculty and staff
(ii) catering, including any mid-day meals scheme sponsored by the Government
(iii) security or cleaning or house-keeping services performed in such educational institution
(iv) services relating to admission to, or conduct of examination by, such institution;
Hence any other services except (a) and (b) provided by education institution are taxable under service tax.

Starting a school is profitable business idea but it is essential a matter of responsibility. Because in school your shaping future of society. You need to handle this business with proper care because you deal with humans rather than goods.

Hence, starting a school is profitable business idea if it is done carefully.


0 Comments:

Post a Comment