Confused About Labor License for My Preschool? Need Advice on Bank Requirements

I have just opened a preschool as a Franchisee. I have my own company under sole proprietorship. As I found out from local authorities, I am not required to register my firm nor get a license to run the school. I am required to open a current account, and most banks are refusing because I do not have a firm registration nor a license. They are asking me to shell out around 5000/- to 6000/- to obtain a Labour License, and only after I get that, they will initiate procedures for a current account. Please help. Are they correct? Why do I need to apply for a labor license?

Current Situation

At the moment, I have only 1 teacher employed.

Please do help. I am in a fix and don't want to get conned.

Regards

Let me first congratulate you on opening a preschool. You are in a noble profession. Even though today's preschools, schools, high schools, colleges, and all educational institutes are more in business, I still consider this profession a noble one.

Registration Requirements

To answer your query, you need to obtain registration under the Shops & Establishment Act. It is mandatory for you. With its help, you can open your current bank account. In your state, whether any other permission/registration/license is required by you from the education department or any other authority, you need to find out locally. Even the institute from which you have taken a franchise can guide you. However, no labor license is applicable to you.

Future Compliance

When you grow, PF, ESI, and other labor laws will be applicable to you. If all branches of your institutes are clubbed, you may fall under PF, ESI, and other labor laws.

Wishing you all the best.

Regards.

Thank you for your wishes and encouragement. I encountered an issue - the offices of the shop and establishment registration are adamant that any school educating children below the 5th standard (i.e., from playgroup till 4th standard) does not and cannot be registered. As I mentioned, I am a franchisee, and I checked with other franchisees - none have registered under the shop & establishment act. I have come to a standstill and don't know how to proceed. Please help.

Regards

I am sailing in the same boat and would appreciate it if someone could help answer the question of how to open a current account for a sole proprietorship firm (a preschool in this case) given that registration is not mandatory.

Dear Mr. Gopinath Varahamurthi, your reply is useful and valid, thanks! I have registered a trust to start a new play school (Montessori method). I have a few questions on which I need your advice:

- How do I bring the school under the trust? Is any documentation required?
- I have obtained a PAN card from the trust to open a bank account. Is this sufficient, or do I need a separate bank account for the school?
- What is the tax liability for the school as well as the trust - GST/VAT/Service tax, etc.?

Kindly provide some details on the above questions.

Thanks!
Suresh