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Ssi Steps & Registration Formalities

The document outlines the 18 step process for setting up a micro, small, or medium enterprise (MSME) in India. This includes deciding the type of business, selecting a product, business structure, location, obtaining necessary permits and licenses, financing, purchasing equipment, hiring employees, and ongoing operations like production, marketing, and repayment. It also describes the process for obtaining provisional and permanent registration with the state or district industries centers, which provides various benefits.

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172 views

Ssi Steps & Registration Formalities

The document outlines the 18 step process for setting up a micro, small, or medium enterprise (MSME) in India. This includes deciding the type of business, selecting a product, business structure, location, obtaining necessary permits and licenses, financing, purchasing equipment, hiring employees, and ongoing operations like production, marketing, and repayment. It also describes the process for obtaining provisional and permanent registration with the state or district industries centers, which provides various benefits.

Uploaded by

kartheek_aldi
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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SSI STEPS & REGISTRATION

FORMALITIES
Steps For Setting Up MSME Unit
in India
1. Decide on-
– A Manufacturing Enterprise   may be :
• Micro - Investment in Plant & Machinery
Rs. 25 lakhs
• Small - Investment in Plant & Machinery
Rs. 5 Crore.
• Medium - Investment in Plant &
Machinery Rs. 10 Crore.
◦ Small Scale Service & Business Enterprises
(SSSBE), the categorization is as per:
Micro - Investment in Plant & Machinery
Rs. 10 lakhs
Small - Investment in Plant & Machinery
Rs. 2 Crore.
Medium - Investment in Plant &
Machinery Rs. 5 crore.
2.Selection of the product based on
market survey

3.Form of ownership can be - Proprietary


concern, - Partnership, - Limited
company, or   - Cooperative society
4. Location of the enterprise-
Factor determining the Location are:-
 Nearness to market and nearness to raw
materials.
 Early availability of transport facility at
cheaper rates.
 Availability of skilled workers at cheaper
rates.
 Incentives/concessions for industrially
backward areas
5. Land & Building :- Availability industrial
sheds and with minimum investment

6. Preparation of the project report :-


- Technical feasibility.
- Economic viability.
- Total cost of the project-fixed as well as
working capital.
7. Registration :-
- Whom to approach-depending upon the
location of the factory.
- Permanent and temporary registration.

8. Financing :- (for fixed assets & working


capital)
- Whom to approach - Bank, private financial
Institution, Govt. agencies, UPFC, etc.
- Types of scheme.
9. Statutory Licenses/clearances :-
e.g.:-
- Manufacture of drugs Cosmetics
- State Drug controller/Drug Control Administration.
- Manufacture of fruits and vegetable based
products (FPO)
- D.D Food, Vegetable Preservation, Ministry of
Agriculture
- Power connection
- State Electricity Board
- Pollution Control
- State Pollution Control Board and so on.
10. Purchasing of Machinery :-
- NSIC provides indigenous and imported
machinery to MSMEs on hire purchase basis.
The rate of earnest to be paid varies from 15
to 30%.

11. Recruitment of personnel


12. Installation of machinery.

13. Power connection / water supply

14. Procurement of raw materials


15. Production

16. Marketing :-
- Advertisement and publicity
- Channel of distribution
- After sales service, if required
- Feed back from customer.
17. Repayment of loans

18. Profit generation

19. Avoiding sickness


- Modernization and technology up gradation
Registration of Small Enterprises:
Registration of an existing or proposed small
scale enterprise is voluntary and not compulsory.
It has no statutory basis.
But, registration is beneficial for the enterprise
itself because it makes the unit eligible for
availing the benefits given by the Central or
State Governments.
The State Directorate or Commissioner of
Industries or District Industries Centers (DICs)
are the concerned authorities for registration of
small scale units.
This registration is both location specific
and product specific.
The registration is done in two steps:-
◦ Provisional registration and
◦ Permanent registration
Provisional registration
Initially,a provisional registration is
granted for the proposed enterprise.
It is granted for a specified period of time
during which the unit is expected to be
setup.
application forms for provisional
registration will be filled in duplicate.
◦ One copy, duly endorsed, will be given to the
applicant.
◦ The other copy will be retained by the District
Industries Centre/Registering Authority for
record.
A Provisional Registration Certificate (PRC)
enables the unit to obtain :-
(i) Term loans and working capital from
financial institutions, banks under priority
sector lending;
(ii) facilities for accommodation, land and other
approvals;
(iii) No objection certificates (NOCs) and
clearances from regulatory bodies such as
pollution control board, labor regulations, etc.
Permanent registration
Once the unit has commenced
commercial production, it is granted
permanent registration.

 It is a life time registration given after


physical inspection of the enterprise and
scrutiny of certain documents.
Some of the formalities required to be completed for
seeking permanent registration are:-
◦ Clearance from the municipal corporation

◦ State pollution control board clearance

◦ Sanction from the electricity board

◦ Ownership/tenancy rights of the premises where unit is


located

◦ Copy of partnership deed/Memorandum of articles of


association in case of a private limited company
◦ Sale bill of product manufactured

◦ Sale bill of each end product

◦ Purchase bill of each raw material

◦ Purchase bill of machinery installed

◦ BIS/QC certificate if applicable

◦ An affidavit giving status of the unit, machinery


installed, power requirement, etc.
Approvals

Exemption from Compulsory License


◦ No industrial license is required except in case of
6 product groups included in compulsory
licensing

◦ But if a small-scale unit employs less than


50/100 workers with/without power then it
would not require a license from the Govt. of
India even for the 6 product groups covered in
licensing under Schedule II of the notification.
Clearances
An entrepreneur has to obtain several
clearances or permissions depending upon the
nature of his unit and products manufactured
 Regulatory or Taxation Clearances
◦ Registration under Sales Tax Act - Commercial Tax
officer of area concerned
◦ Registration under Central Excise Act - Collector of
Central Excise or his nominee for area
◦ Payment of Income Tax - ITO of the 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 State
Electricity Board
◦ Employee strength exceeding 10 with power connection
or 20 without power - Chief Inspector of Factories
 Environment & Pollution Related Clearances:
Except for 17 critically polluting sectors given
below, in all other cases MSMEs will merely have
to file an application and obtain an
acknowledgement
o Sugar
o Fertilizer (Nitrogen/Phosphate)
o Cement
o Fermentation & Distillery
o Aluminum
o Petrochemicals
o Thermal Power
o Oil refinery
o Sulphuric Acid
o Tanneries
o Copper smelter
o Zinc smelter
o Iron & Steel
o Pulp & Paper
o Dye and Dye intermediates
o Pesticides manufacturing and formulation
o Basic Drugs and Pharmaceuticals
 Product Specific Clearances
o Establishing a Printing Press - District Magistrate
o License for Cold Storage Construction - Designated
Official in State
o Pesticides - Central/State Agricultural Department -
Ministry of Agriculture
o Drugs and Pharmaceuticals - Drug license from State
Drug Controller
o Safety Matches/ Fireworks - License under Explosives
Act from Directorate of Explosives, Nagpur
o Household Electrical Appliances - License from
Bureau of Indian Standards
o Wood Working Industry within 8 km from forest -
District Forest Officer

o Milk Processing & Milk products manufacturing


units - Approval under Milk and Milk Products
Order from State Agricultural/ Food Processing
Industries Department above a designated
capacity.

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