Opening a Playschool in India: Legal Requirements and Business Plan
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Opening a Playschool in India: Legal Requirements and Business Plan

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Are you considering starting a playschool in India? With the increasing demand for quality education in the formative years of a child, opening a playschool can be a lucrative business opportunity. However, it is crucial to understand the legal requirements and develop a comprehensive business plan to ensure a smooth and successful venture. In this article, we will explore the legal considerations and outline the essential elements of a business plan for opening a playschool in India.

The Importance of Playschool Education in India

India has witnessed significant social and economic development in recent years. With a fast-growing economy and rising levels of literacy and social awareness, there is a growing demand for quality education at all age levels, including the early childhood years. The Right to Education Act, enacted by the Government of India in 2009, emphasizes free and compulsory education for children between the ages of 6 and 14. While children below the age of 6 are not covered under this act, there is a provision for free pre-school education. The government has also signed a convention for implementing Early Childhood Care and Education (ECCE) schemes for free playschool education, highlighting the importance of early childhood development.

Developing a Business Plan for a Playschool

Before diving into the legal requirements for opening a playschool, it is crucial to develop a comprehensive business plan. A well-structured business plan will serve as a blueprint for guiding your actions and decision-making processes. Here are some key elements to consider when creating a business plan for your playschool:

1. Number of Children and Location

Start by determining the number of children you plan to cater to in your playschool. This will help you determine the size and capacity of your facility. Consider the location and infrastructure requirements as well. Choose an area that is well-maintained, safe for children, and meets the necessary standards for setting up a playschool. It is worth noting that playschools can also be started from residential areas that fulfill safety requirements.

2. Business Model

Decide on the business model for your playschool. Will it be a full-time or part-time playschool? Will you offer daycare services or include after-school activities? Understanding your business model will help you define your target audience and tailor your curriculum and services accordingly.

3. Financial Considerations

Consider the financial aspects of starting a playschool. Determine your budget and estimate the required investments for infrastructure, supplies, equipment, advertising, and other operational expenses. If necessary, explore loan options specifically designed for women entrepreneurs, such as the BMB Parvarish loan scheme provided by Bharatiya Mahila Bank and Punjab National Bank.

4. Recruitment of Staff

Ensure that you have a plan for recruiting qualified teaching and administrative staff. According to the National Council for Teacher Education (NCTE) guidelines, preschool teachers should have a secondary school certificate or its equivalent, preferably accompanied by a diploma or certificate in preschool teacher education.

5. Curriculum and Teaching Methodology

Decide on the curriculum and teaching methodology for your playschool. Research different approaches, such as the Montessori Method, which focuses on both social interaction and academics. Design a curriculum that aligns with your vision and addresses the holistic development of children.

6. Advertising and Marketing

Develop a marketing strategy to promote your playschool. Consider various channels, such as online advertising, social media, local community outreach, and word-of-mouth referrals. Create a strong brand identity and highlight the unique aspects of your playschool to attract parents and caregivers.

7. Formation of Entity

Decide whether your playschool will operate as a profit or non-profit enterprise. If you choose a profit-making enterprise, incorporating it into a private limited company or a Limited Liability Partnership (LLP) is advisable. For non-profit enterprises, you can register as a company or a trust under Section 8 of the Companies Act 2013.

8. Franchise or Independent Institution

Consider whether you want to start a franchise or set up your own playschool. If you opt for a franchise, you will need to enter into an agreement with the parent organization and abide by their terms and conditions. Keep in mind that there is no specific law regulating franchised businesses in India, but contractual obligations and intellectual property laws apply.

On the other hand, setting up your own institution gives you more control and opportunities for innovation. You won't have to pay franchise fees or royalties, and you can tailor the curriculum and services to your vision.

9. Residential Playschools

Another option to consider is starting a playschool from a residential area. In this case, you will need permission from the cooperative housing society or apartment association. If you are renting or leasing a residential area, ensure that the lease agreement clearly states the purpose of using the space for running a playschool.

10. Legal Requirements and Regulations

While there is no specific legislation or certification for opening a playschool in India, you must comply with relevant laws and regulations. Private School Education Acts enacted by state governments may require registration and licensing of playschools. Additionally, you must complete formalities with the Municipal Corporation and the education department of your city. Registration fees and applications may apply.

For instance, Maharashtra has The Maharashtra Preschool Centres (Regulation of Admission) Act 1996, which mandates the compulsory registration of preschools. Tamil Nadu designates the District Elementary Educational Officer as the competent authority for approval.

It is anticipated that the upcoming Early Childhood Care and Education (ECCE) Policy will make registration and accreditation of playschools mandatory. Familiarize yourself with these regulations and ensure compliance to avoid any legal issues in the future.

11. Other Regulations

While the Shops and Establishments Act is generally silent regarding playschools, it is essential to research and understand the regulations specific to your state. Labor laws, such as minimum wages and the requirement to provide benefits like Employees Provident Fund schemes, need to be followed.

12. Service Tax Applicability

According to the Finance Act, 1994, service tax is not applicable to playschools. However, it is essential to stay updated on any changes in tax regulations and consult with a tax professional to ensure compliance.


Starting a playschool in India can be a rewarding venture, both economically and socially. By carefully formulating a business plan and considering the legal requirements, you can establish a successful playschool that provides quality education to young children. Remember to stay informed about changes in regulations and seek professional guidance when necessary. With the right approach and dedication, you can make a positive impact on the lives of children and their families.

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