Startup seeking guidance

Hello Mam / Sir, My name is Ayush Agrawal. I am going into packaging and marketing industry. Ours will be a sole-proprietorship firm based in Madhya Pradesh with its office in Jabalpur. We will outsource our products from Kerela. Packaging will be done locally and marketing will be done through our various contacts. We will be dealing in packaged Cereals, Dals, Flours, Spices, Spice Powders, Culinary Pastes, Masala Mixes, Oils, Health Foods, Snacks, Breakfast Cereals, Juices, Cookies & Millets among other items. I am very weak when it comes to legal matters and do not know much about the various laws which would govern us. What all would we be have to be careful about? What all licenses and certificates would we be required to have? Our business would come under purview of which departments of governments as we are currently only outsourcing our products and not growing them. I have heard food department inspectors and excise department inspectors trouble a lot for funds and extort funds by mixing wrongful stuff in good packets. Since we are dealing with foods, what all do we have to be careful about? We are a very small startup and cannot afford bribes or even lawyers for that matter. Any advice would be helpful. Please not we have very less capital and cannot afford many things like lawyers and CAs right now. We are 2 partners and not drawing salary and opened a sole proprietorship instead as income tax after 3 years would become 20 percent if we had opened a partnership. One of us has given loan to firm and other has invested capital.

Dear Mr. Agrawal,

It's not clear what type of outsourcing you are considering . As per my understanding you are going to purchase all pulses etc in bulk from some vendor in Kerala and then you will repack in retail packs and sell the products either on whole sale basis online or from some particular departmental store in Jabalpur.

You need to do the following

1) As packing repacking, labelling and relabelling etc is deemed manufacture as per section 2(f)(iii) of Excise Act. Hence You can go for SSI Registration of Your premises and you can avail benefit as per Notification 08/2012 of Excise uptil 1.5Cr if your turover for preceeding previous year is 4 Cr or 0 in your case due to ist yr of business.

2) You have to go for M P Shop and Eshtablish ment Act Registration

3) As you are dealing in food items , You have to apply for FSSAI Registration if your yearly turnover remains below 12 Lakh and FSSAI License if Turnover>12L

4) You should have Rent Deed notrised and not registered or Registered.

5) If you are going to sell your product to Governement under Governement tendering system or under Institutional Sales viz to Railways, Hotel Industry, Airport Authoritites etc.Then Tender shall required your product should have been certified under ISO 9001:208 or ISO 9001: 2015 for satisfaction of Quality of food product and ISO 22001 for food Safety

6) If you are considering any Logo or Brand Name or Trade Name to use on the packing of your products then you have to get it design and registred under Trade Mark Registration Act.

7) You have to register for MPVAT and CST for local sale and inter state sale.

8) As you will use weighting Machine for measuring Quantity of your product, Hence you have to get the registration of Weighting Machine and do checking it calibaration on regular basis under weight and Measurement Act.

9) You should go for opening Current Account with Bank. Although a saving bank can equally serve the purpose

10) You may also have to register your Proprietorship under Registration Act 1908 if you have to go for Governement Projects.

For any query feel free to interact with us.

Regards

Sanjeev Kumar Mahajan

Managing Partner

FACTS Asia

factsglobal2014 @ gmail.com

9718781532