Updated on: Oct 12th, 2023
9 min read
Opening a medical store requires many registrations and must follow legal procedures before selling medicines. India’s pharmacy and healthcare sectors have grown tremendously due to the increase in corporate and multi-speciality hospitals. Establishing a medical store is a good option for entrepreneurs having less capital and want to invest in the healthcare sector. This article provides how to open a medical store in India.
The type of medical store that an individual can establish are as follows:
Hospital medical stores, chain pharmacies, and township medical stores are generally established under a larger corporate hospital or entity such as a company. The standalone and township medical stores are usually set up as shops by proprietors or partners. A person wishing to open a medical store must first decide the type of medical store they want to set up and apply for its registration and other licences.
Area specification: The area of the medical store must be a minimum of 10 square metres for a retail business and 15 square metres for a wholesale business.
Storage facility: Medical stores must be equipped with an air conditioner or refrigerator since the labelling specifications require that certain drugs, like insulin injections, vaccines, sera, etc., should be stored in the refrigerator.
Technical staff: Medical stores require technical staff, which are as follows:
Hospital medical stores, chain pharmacies, and township medical stores are generally established as a company or LLP. The standalone and township medical stores are usually set up as partnership firms or sole proprietorships. The medical store owner should decide the type of business structure for the medical store and apply accordingly for its registration. Below are the types of business structures that a medical store owner can choose for opening the store:
In a sole proprietorship business, there will be only one person as the owner of the medical store. The sole owner runs and manages the medical store. There is no specific registration required to be obtained to establish a sole proprietorship. The sole proprietor or owner should get a PAN card and open a bank account to run the business.
A partnership firm means the medical store is established by two or more partners who manage the business together as per the partnership deed executed by all partners. It should be registered with the Registrar of Firms.
A One Person Company (OPC) is a company registered by a single person as the sole member of the company. An OPC can have only one member who runs the medical store. When a medical store is registered as an OPC company, it will get all the benefits of a company, such as limited liability to the company member, perpetual succession, separate legal entity, etc. An OPC should be registered with the Registrar of Companies (ROC).
A medical store can also be registered as a private limited company with the Registrar of Companies. A private limited company is started by a minimum of two members and two directors. However, the company cannot issue a prospectus inviting the public to subscribe to its shares.
Recently, Limited Liability Partnerships (LLPs) have gained popularity. Medical store owners are considering it to set up their businesses as an LLP. Two or more partners establish an LLP under an LLP agreement executed by all the partners. The functioning of an LLP is similar to a partnership firm, but it has the features and advantages of a company. An LLP should be registered with the Registrar of Companies.
Apart from the medical store registration, many other registrations and licences are required by a medical store owner to run the business. The other significant registrations which a medical store owner must obtain after registering the medical store as a sole proprietorship, partnership firm, LLP, or company are as follows:
A pharmacy licence is one of the major licences required to operate a medical store. The medical store owner or the appointed pharmacists should be qualified pharmacists with a degree of B. Pharm or M. Pharm to secure a pharmacy licence.
The shop and establishment act registration is required for all medical stores to operate their business. As per the municipal rules of the respective state/area municipal corporation, all stores/shops must mandatorily obtain a registration under the respective state’s Shop and Establishment Act.
Any business, including a medical store, requires a Goods and Service Tax (GST) registration if the aggregate turnover of the business exceeds the threshold limit in a financial year as prescribed under the GST Act. Under the GST Act, any business supplying goods having a turnover beyond the threshold limit of Rs.40 lakhs for normal category states and Rs.20 lakhs for special category states in a financial year must obtain GST registration.
Every medical store needs to obtain a drug licence before commencing business. Since medical stores are involved in procuring and selling drugs, they will have to obtain a drug licence from the Central Drugs Standards Control Organisation (CDSCO) and State Drugs Standard Control Organisation (SDSCO). There are two types of drug licences that a medical store needs to obtain depending on the type of store:
Establishing a medical store is a good option since the medical sector is growing in India. To open a medical store, an individual must obtain a partnership, proprietorship, LLP or company registration. Once the store is registered, the individual must mandatorily obtain other licences and registration to run the business smoothly, such as the drug licence, shop and establishment licence and pharmacy licence. The individual must also comply with store requirements as per the Drugs and Cosmetics Act, CDSCO and SDSCO rules and regulations to operate the business of selling medicines and drugs.
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