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SSI STEPS & REGISTRATIONSSI STEPS & REGISTRATION

FORMALITIESFORMALITIES

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Steps For Setting Up MSMESteps For Setting Up MSME

Unit in IndiaUnit in India

1. Decide on-

A Manufacturing Enterprise may be :

Micro - Investmentin Plant & Machinery

Rs. 25 lakhs

Small - Investmentin Plant & Machinery

Rs. 5 Crore.

Medium - Investmentin Plant &

Machinery Rs.10 Crore.

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Small Scale Service & Business

Enterprises (SSSBE), the categorization

is as per:

y Micro - Investmentin Plant & Machinery

Rs.10 lakhs

y Small - Investmentin Plant & Machinery Rs.2 Crore.

y Medium - Investmentin Plant & Machinery

Rs. 5 crore.

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y 2. Selection ofthe product based on

marketsurvey

y 3. Form of ownership can be - Proprietary

concern, - Partnership, - Limitedcompany,

or - Cooperativesociety

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4. Location oftheenterprise-

Factordetermining the Location are:-y Nearnessto market and nearnessto raw

materials.

y Early availability oftransport facility at

cheaperrates.

y Availability ofskilled workers atcheaper

rates.

y Incentives/concessions forindustrially

backward areas

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5. Land & Building :- Availabilityindustrial sheds

and withminimuminvestment

6. Preparation ofthe projectreport :-

- Technical feasibility.- Economic viability.

- Total cost ofthe project-fixed as well as

working capital.

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7. Registration :-

- Whomto approach-depending upon thelocation ofthe factory.

- Permanent andtemporaryregistration.

8. Financing :- (for fixed assets & working

capital)

- Whomto approach - Bank, private financialInstitution, Govt. agencies, UPFC, etc.

- Types ofscheme.

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9. Statutory Licenses/clearances :-

e.g.:-

- Manufacture ofdrugs Cosmetics- State Drug controller/Drug ControlAdministration.

- Manufacture of fruits and vegetable based

products (FPO)- D.D Food, Vegetable Preservation, Ministry ofAgriculture

- Powerconnection

- State Electricity Board

- Pollution Control

- State Pollution Control Board and so on.

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10. Purchasing of Machinery:-

- NSIC providesindigenous andimportedmachineryto MSMEs on hire purchase basis.

Therate ofearnestto be paid varies from15

to 30%.

11. Recruitment of personnel

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12. Installation ofmachinery.

13. Powerconnection / watersupply

14. Procurement ofraw materials

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15. Production

16. Marketing :-

- Advertisement and publicity

- Channel ofdistribution

- Aftersalesservice, ifrequired

- Feed back fromcustomer.

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17. Repayment of loans

18. Profit generation

19.Avoiding sickness

- Modernization andtechnologyup gradation

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Registration of SmallRegistration of Small

Enterprises:Enterprises:

y Registration of an existing or proposedsmallscaleenterpriseis voluntary and notcompulsory.Ithas no statutory basis.

y But, registration is beneficial fortheenterpriseitself becauseitmakestheuniteligible foravailing the benefits given bythe Central or StateGovernments.

y

The StateDirectorate or Commissioner ofIndustries orDistrict Industries Centers (DICs)aretheconcerned authorities forregistration ofsmall scaleunits.

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y Thisregistration is both location specific

and productspecific.

y Theregistration isdonein two steps:-

Provisional registration and

Permanentregistration

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Provisional registrationProvisional registration

y

Initially, a provisional registration is grantedforthe proposedenterprise.

y Itis granted for a specified period oftimeduring whichtheunitisexpectedto be

setup.y application forms for provisional

registration will be filledin duplicate.

Onecopy, dulyendorsed, will be given to the

applicant.

The othercopy will beretained bytheDistrictIndustries Centre/Registering Authority forrecord.

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Permanentregistration

y Oncetheunithascommenced

commercial production, itis granted

permanentregistration.

y Itis a lifetimeregistration given after

physical inspection oftheenterprise and

scrutiny ofcertain documents.

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y Some of the formalities required to be

completed for seeking permanent registration

are:-

Clearance fromthemunicipal corporation

State pollution control boardclearance

Sanction fromtheelectricity board

Ownership/tenancyrights ofthe premises whereunitis located

Copy of partnership deed/Memorandum of articles of

association in case of a private limitedcompany

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Sale bill of productmanufactured

Sale bill ofeachend product

Purchase bill ofeachraw material

Purchase bill ofmachineryinstalled

BIS/QC certificateif applicable

An affidavit giving status oftheunit, machinery

installed, powerrequirement, etc.

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ApprovalsApprovals

y Exemption from Compulsory License

No industrial licenseisrequiredexceptin case

of6 product groups includedin compulsory

licensing

Butif a small-scaleunitemploys lessthan 50/100

workers with/without powerthen it would not

require a license fromthe Govt. of India even for

the6 product groupscoveredin licensing under

Schedule II ofthe notification.

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ClearancesClearances

y

An entrepreneurhasto obtain severalclearances or permissionsdepending upon

the nature ofhisunit and products

manufactured

Regulatory or Taxation Clearances

Registration under Sales TaxAct - Commercial Tax

officer of area concerned

Registration under Central ExciseAct - Collectorof Central Excise orhis nominee for area

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Payment of Income Tax - ITO ofthe area

concerned

Registration of Partnership deed - Inspector

General of area concerned

Calibration of weights & measures - Weights and

Measures Inspector of State

Power Connection - Designated Officer of StateElectricity Board

Employee strength exceeding 10 with power

connection or 20 without power- Chief Inspector

of Factories

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Environment & Pollution Related Clearances:

Except for17critically polluting sectors given

below, in all othercases MSMEs will merelyhavetofile an application and obtain an acknowledgement

o Sugar

o Fertilizer (Nitrogen/Phosphate)

o Cement

o Fermentation & Distillery

o Aluminum

o Petrochemicalso Thermal Power

o Oil refinery

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o Sulphuric Acid

o Tanneries

o Coppersmelter

o Zincsmelter

o Iron & Steel

o Pulp & Paper

o Dye andDyeintermediates

o Pesticidesmanufacturing and formulation

o BasicDrugs and Pharmaceuticals

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Product Specific Clearances

o Establishing a Printing Press - District Magistrate

o License for Cold Storage Construction - DesignatedOfficial in State

o Pesticides - Central/StateAgricultural Department -

Ministry of Agriculture

o Drugs and Pharmaceuticals - Drug license from

StateDrug Controller

o Safety Matches/ Fireworks - Licenseunder

Explosives Act fromDirectorate of Explosives,Nagpur

o Household ElectricalAppliances - License from

Bureau of Indian Standards

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o WoodWorking Industry within 8 km from forest

- District Forest Officer

o Milk Processing & Milk products manufacturingunits - Approval under Milk and Milk Products

Order from State Agricultural/ Food Processing

IndustriesDepartment above a designated

capacity.