How to Start School Business

Will one want to believe that as many as 220 million children are enrolled in schools in India each year? Even then, 140 million students are still left out. According to a general study conducted, India currently needs at least 200,000 schools. In higher education segment itself, the country needs around additional 1,500 universities and colleges.

If you are planning to plunge into the business of education, now is the right time to do it. While there is huge demand for schools, the numbers aren’t commensurate to that demand. Therefore, there is a huge market open to private players to up the standards in not only creating the volumes, but in also helping to improve the overall quality of education.

Setting it up
It isn’t an easy task to setup a school in India. For one, there are many do(s) and don’t(s) and that also for the obvious reasons. Private entities cannot be allowed to open schools and need to operate under a registered society. Such a society should exist in accordance with ‘the Societies Act of 1860 or by a trust that has been organized as per the Public Trust Act of individual states.’ Alternatively, a private party can also establish a company as prescribed by Section 25 of the Companies Act 1956.

Also, at the time of the formation of a school trust or society, a clear Memorandum of Association should be in place.

All this is done in order to ensure that a school is set up as a not-for-profit making institution.
Above all this, there are requisite licenses and permissions to be taken from relevant authorities. If one decides to create a trust or society, the body must have a minimum of five to six members that comprises a governing board. The board will then have to appoint a president, secretary, and a chairman, preferably declared and announced officially so that it is well known in society.

Permissions and Licenses
While setting up a school, a trust or company needs various licenses. These include water and electricity usage permission and most importantly a No Objection Certificate (NOC) over the land being used for building the school. The NOC is granted keeping in mind the proximity and physical viability of the school to the existing educational institutions, if any. The NOC also bids the party in building the school within three years of receiving the permission, post which a new NOC has to be applied and granted. This is also known as the Essentiality Certificate (EC) that is issued by the concerned state’s Department of Education. Such land is usually issued through auctions and given in subsidized rate, as the use is for educational purpose and does not have a commercial angle to its usage. 

Additionally, a member of the governing body of such a trust can also convert his or her own land for educational purpose, by again, applying for a requisite NOC.

If you wish to start a primary school only, then permission from the municipality is the only prerequisite you need. However, for a secondary and (Classes 6-8) senior secondary school (Classes 9-12), proper consent has to be taken by the Department of Education. Approval for the latter only happens after the successful completion of two tenures of the school as a primary school.

Affiliations and other formalities
The Central Board of Secondary Education (CBSE), the state government boards, and the Council for the Indian School Certificate Examinations (CISCE) have laid out specific mandate to be followed for setting up a school facility. One is to have a fully functional and well equipped sports facility and playground.

Affiliations follow a simple step by step process and are transparent in nature. They are usually granted, depending a check list that has to be adhered to by the school authorities. The following details must always be kept be sorted before going into operations. These include details of the sale and purchase of the land and construction of building, water certificates, hygiene certificates, auditor’s statements as and when they happen, bank statements of governing body and the members and completion of building certificates, to name a few.