More food delivery platforms and changing consumer habits have driven a cloud kitchen boom, or ghost kitchens, as they are also termed, or virtual kitchens. Cloud kitchens are delivery-only restaurants with no dine space, no waiters, and no real estate costs that are high.
Introduction
Though the model is cost-effective and versatile, operating a cloud kitchen in India comes with some legal formalities as well. Non-compliance will lead to penalty, closure, or de-listing by platforms like Swiggy and Zomato.
This blog will walk you through all the legislations of successful and legal operation of a cloud kitchen in India.
1. Choose the right Business Structure
Before you begin business, you need to put your cloud kitchen under a legally binding business entity.
Registration Options:
Sole Proprietorship: Simple and suitable for single owners.
Partnership Firm: Chosen when there are two or more co-owners.
Limited Liability Partnership (LLP): Offers liability protection to the owners.
Private Limited Company: Suitable for growth and external funding.
They have varying tax implications and regulatory needs. Select according to your investment plan and long-term goal.
2. MSME (Now Udyam Registration) Register
If you wish to take advantage of government schemes, subsidies, and soft credit, register yourself on the Udyam portal as an MSME.
It is free and available online.
You will be provided with a unique Udyam Registration Number and certificate.
Entitles you to low-interest business loans and access to tenders.
This is not a discretionary but highly desirable step for small companies and start-ups.
India requires all food businesses to register with the Food Safety and Standards Authority of India (FSSAI). This will ensure that your cloud kitchen is in compliance with national food safety standards.
Basic Registration: Up to ₹12 lakhs turnover a year.
State License: ₹12 lakhs to ₹20 crores turnover.
Central License: For inter-state business or turnover of over ₹20 crores.
Documents Required:
Owner identification and address proof.
Proof of business registration.
Verification of kitchen address and photographs.
Water analysis report of a NABL-approved laboratory.
List of food items being processed:.
Running a business without an FSSAI registration is illegal and incurs huge penalties.
4. Get a Local Municipality Trade License
You will need a trade license of your state corporation to initiate any commercial activity.
Purpose of Trade License:
It legitimizes the operations of the enterprise in the area mentioned.
Empowers legal occupation of kitchen space on commercial terms.
Comes at the core of sanitation and hygiene act.
Documents to be provided are property documents, identification documents, photocopy of FSSAI license, and landlord NOC in case the space is being occupied on rent.
5. Obtain Water Testing from a Licensed Laboratory
For food hygiene and FSSAI approval, your source of water would have to be certified by a NABL-recognized lab.
What does the Water Test cover?
Microbiology test kits like coliform and E. coli.
Chemical property like fluoride, TDS, and hardness.
Physical properties like color and pH.
The lab provides you with a certificate that assures your water is safe to cook.
6. Consider Fire Safety considerations
Fire safety is prioritized in cloud kitchens, especially those with commercial stove, LPG cylinder, or electric oven.
When You Need a Fire NOC:
If your kitchen is in a business building or shopping mall.
If the installation involves multiple fire-risky devices.
If you wish to get a metro license in metro cities like Mumbai, Delhi, or Bengaluru.
Fit fire extinguishers, smoke detectors, and ventilation to be safe.
7. Register Under GST if Turnover Is More Than ₹20 Lakhs
If your cloud kitchen has a turnover of more than ₹20 lakhs in a year (more than ₹10 lakhs in special category states), then mandatorily you would have to register under GST.
Benefits of GST Registration:
Allows input tax credit on purchases.
Extremely important to get listed under Zomato, Swiggy, and so on.
It provides legitimacy to your business.
After registration, you must file GST returns on time in order to be so.
8. Food Aggregators (Swiggy, Zomato) listed
Cloud kitchens need to be picked up online. Listing with food ordering platforms can bring your name into the limelight by leaps and bounds.
Onboarding Requirements:
Original FSSAI license.
Professional quality food photography and business logo.
Kitchen photographs displaying hygiene and cleanliness.
GST number (optional but usually needed).
Bank account details for payments.
All the websites require at least a minimum hygiene check or request food handler certificates prior to work.
9. Maintain Hygiene and Compliance Records
Once the license is obtained, food safety is ensured regularly. FSSAI requires food operators to keep certain records.
Key Compliance Registers
Cleanliness and sanitation procedures.
Refrigeration and storage temperature readings.
Pest control records and bills.
Medical fitness certificates of workers.
SOP’s for preparation, cooking, and serving.
Such accounts are liable to be audited on surprise checks by the Food Department.
10. Shop and Establishment Registration Apply for
Depending on where you are located and the prevailing labor laws of the place, you may need to register yourself under Shops and Establishment Act.
Why It’s Needed
Enables employment and management of laborers legally.
Useful for availing a business bank account.
Needed while availing loans or leasing.
They are such as Maharashtra, Karnataka, and Delhi, which mandates each commercial unit to register with it.
11. Register Trademark for Brand
Registering your brand name and logo so that you can safeguard them is necessary if you have to uphold a good brand image.
Benefits of Trademarking:
Legal protection against imitators.
Builds investor and customer confidence. Gives value to your business in the long term. Register your trademark in Class 43 for restaurant and beverage services. You can use the ™ symbol once you have applied. 12. Dispose of packaging and trash according to law Cloud kitchens must have green disposal procedures. They include: Proper food waste, oil, and grease disposal. Using biodegradable or recyclable packaging material. Compliance with state municipal solid waste legislation. Even some states require Extended Producer Responsibility (EPR) certification if you are producing plastic waste. 13. Labour Law Compliance if You Have Employees If your cloud kitchen employs cleaners, cooks, or delivery partners, labour laws apply. Compliance Checklist: Keep records of payments and attendance. Remit the minimum wages as stipulated by the state laws. Remit ESI/EPF benefits wherever the said benefits are payable. Kitchen workers must possess valid health certificates. Non-compliance may result in penalties or prosecution of the workers. Conclusion A cloud kitchen is a great business concept in the post-pandemic era. But taking shortcuts with legality can cost your business its reputation, licenses, or existence. Begin on the right note by fulfilling all compliance requirements from day one. From company registrations, licensing, to proper hygiene standards—each step towards it adds up to your trust factor and elbow room for expansion. If you are willing to start a cloud kitchen and you wish to take the services of experts for all the legal procedures, Legal Dalal can help you.
