How to start Courier Company in India?

Courier companies have become an important part of our daily lives. People and businesses use courier services offered by such companies to send documents, clothes, skincare products, jewellery, groceries and many other items from one place to another. These deliveries may be within the same city, to another state or even to another country. 

With the ever growing demand for reliable delivery services, it is safe to assume that starting a courier company can be a good business opportunity. However, like any other business, you need to take care of certain registrations, documents and other basic requirements before starting. So, how do you start a courier company in India from scratch? In this blog, we will explain the main requirements you need to fulfill.

What is a Courier Company?

A courier company is a business that helps transport packages, documents and goods from one place to another. Unlike traditional postal services, courier companies mainly focus on faster delivery, door-to-door service, shipment tracking and safe handling of all the assigned packages. A courier company can deliver different types of items to different locations. The delivery can be within same district, to another city or state or even to another country. Courier companies make use of different transport methods as well as delivery networks to make sure shipments reach their destination safely in a timely fashion. 

For example, for international deliveries, courier companies may use air transport, cargo flights, ships and local delivery networks to move shipments from one country to another. Courier companies have become really popular as people and businesses tend to look for faster and more convenient delivery options. 

Traditional mail services can take a lot more time. Also, they may have limits on size/weight of items. Courier companies provide faster and more convenient delivery, which makes them a highly preferred choice for many businesses and individuals today.

How to Start a Courier Business: Major Requirements Explained 

Starting a courier business in India is not exactly an easy task as there are several requirements that need to be met. However, given the growing demand for courier and delivery services, it can be a promising and profitable business. 

For many people, this business may be worth considering if they are able to meet the required conditions and manage the business properly. Below, we have explained the major requirements that you need to fulfil to start your own courier business:-

1. Business Registration for Courier Company

To start any business in India, including a courier business, you first need to choose the right business structure based on your exact needs. If you want to register a company under the Companies Act, 2013, you can choose from options like Private Limited Company or One Person Company among others. Each type has its own unique features. For example, an OPC is suitable for a single person who wants to operate through a company structure while a Private Limited Company is generally suitable when two or more people want to run a privately held business.

However, company registration is not the only option that’s available. You can also choose an LLP, partnership firm or sole proprietorship. A partnership firm and sole proprietorship are generally flexible businesses but they also come with unlimited personal liability. On the contrary, we have the LLP model that provides limited liability protection to all its partners. But if you plan to raise significant external funding, a Private Limited Company may be a much more suitable option than an LLP. 

Therefore, it is important to understand the features, benefits and limitations of each business structure very carefully before making a final decision. The right structure will totally depend on factors such as number of owners, liability, funding requirements and future plans for the business. If you are unsure which structure would be right for your courier business, you can contact our consultants at Registrationkraft for detailed guidance.

2. Import Export Code 

Courier companies may work only within India. Alternatively, they may also provide international delivery services. Offering international courier services can bring more business but it also needs more investment and has additional legal requirements. 

If you intend to provide international courier services, you require an Import Export Code from Directorate General of Foreign Trade (DGFT). To apply for it, you need to file an online application via official DGFT portal.

3. GST Registration

If a courier company in India provides international delivery services, it may need to register under GST system as a mandatory requirement. Generally, GST registration is required when the business crosses the applicable annual turnover limit, i.e., Rs. 20 lakh in most states and Rs. 10 lakh in special category states. 

It can also become mandatory in certain cases such as when the business makes taxable interstate supplies. Having GST registration also helps the courier company issue proper GST invoices and ensure adherence to tax rules.

4. Vehicle Documents and Insurance

If you want to operate your own delivery trucks, vans or bikes, you must have all the vehicle documents in place, such as Registration Certificate, Pollution Under Control Certificate and Commercial Vehicle Insurance to name a few. Additionally, it must be ensured that all the vehicles are properly registered for their intended purpose.

5. Shop and Establishment / Trade License

Depending on the location of your company’s registered office or warehouse, you need to obtain a shop and establishment license or a trade license. To obtain the license, you need to file an application with the municipal authority of your state. In many states, the application process for obtaining the trade license / shop and establishment license is online. 

6. IATA / ACAAI Registration & Membership

IATA full form is International Air Transport Association. The full form of ACAAI is Air Cargo Agents Association of India. IATA provides cargo accreditation for businesses involved in international air cargo and freight services. ACAAI is an industry association that represents air cargo agents in India.

If a courier company plans to deal directly with international air cargo or freight forwarding, IATA cargo accreditation may be required. An IATA cargo registration is also required before applying for active membership with ACAAI.

7. Courier / Logistics Agreements

From a legal perspective, courier or logistics agreements are of utmost importance for a courier company in India. If you intend to work with third party transporters, airlines, freight companies or other logistics partners, then having such agreements are essential are they clearly set out the delivery responsibilities, charges, liability for lost/damaged shipments and other important terms. 

8. Office, Warehouse or Sorting Facility

You need a suitable place to run your courier business. Depending on the size and nature of your operations, you may require a dedicated office, warehouse or even a sorting facility. If you plan to store/sort goods, then you should also check whether any additional local permissions or safety requirements apply. 

You May Also Like: 10 Best Courier Companies in India for Fast & Reliable Delivery

Conclusion

Starting a courier company in India is not an easy task at all. There are several registrations, documents and other requirements that need to be taken care of. Some of the major requirements discussed in this article include business registration, IEC, GST registration, vehicle documents and insurance, Shop and Establishment or Trade License, IATA/ACAAI requirements, courier and logistics agreements and a suitable office, warehouse or sorting facility.

We totally understand that handling all these requirements on your own can be quite challenging, especially if you are new to the process. This is where professional guidance can help. If you need help with starting your courier company and completing the required registrations, you can contact the experts at Registrationkraft for guidance and support.

Frequently Asked Questions (FAQs)

Q1. How does a courier company work?

A courier company collects packages from customers, including individual customers and businesses, and then it delivers them to the intended destination with the help of appropriate transportation and delivery networks.

Q2. What is Courier Service HSN Code?

Under the GST system, the HSN code 996812 is used for courier services. 

Q3. Does a courier company in India need to obtain IEC?

A courier company operating only within India does not need to obtain an IEC, as it operates domestically. However, if the courier company provides international courier services, it must obtain an IEC.