CONSTITUTION OF CONSTITUTION OF BUSINESSBUSINESS

While deciding on the constitution of While deciding on the constitution of business i.e. whether the business i.e. whether the entrepreneur wants in the form of entrepreneur wants in the form of sole proprietorship,partership or sole proprietorship,partership or private ltd.company and the risk private ltd.company and the risk involved.He will have to undertake involved.He will have to undertake formalities such as registration..formalities such as registration..

LeGAL CONSIDERATIONSLeGAL CONSIDERATIONS

SSSI plays a very imp.role in the SSSI plays a very imp.role in the economic development of a country. economic development of a country. Various legal formalities are to be Various legal formalities are to be completed for setting up a SS completed for setting up a SS unit.These formlities are as under ;unit.These formlities are as under ;

REGISTRATION WITH DICREGISTRATION WITH DIC

Registration of SSI unit is not Registration of SSI unit is not compulsory.However registration with the compulsory.However registration with the DISTRICT INDUSTRY CENTRE (DIC) DISTRICT INDUSTRY CENTRE (DIC) facilitates obtaining of assistance from the facilitates obtaining of assistance from the govt.The registration of SS unit is done in govt.The registration of SS unit is done in two ways ;two ways ;

PROVISIONAL REGISTRATIONPROVISIONAL REGISTRATION PERMANENT REGISTRATIONPERMANENT REGISTRATION

In case a SS unit is a subsidiary of or In case a SS unit is a subsidiary of or owned by or controlled by any other owned by or controlled by any other undertaking,it is subject to the undertaking,it is subject to the normal licensing provision under the normal licensing provision under the INDUSTRIESDEVELOPMENT AND INDUSTRIESDEVELOPMENT AND REGULATION ACT 1951.REGULATION ACT 1951.

REGISTERING SSI UNITREGISTERING SSI UNIT

The main purpose of Registration is The main purpose of Registration is to maintain statistics and maintain in to maintain statistics and maintain in a roll of such units for the purposes a roll of such units for the purposes of providing incentives and support of providing incentives and support services.services.

States may have a SIDO registration States may have a SIDO registration scheme and a State registration scheme and a State registration scheme.scheme.

BENEFITS OF BENEFITS OF REGISTRATIONREGISTRATION

The registration scheme has no The registration scheme has no statutory basis.Units would normally statutory basis.Units would normally get registration to benefits,incentives get registration to benefits,incentives opr support either by the Central or opr support either by the Central or States govt.these are;States govt.these are;

Credit PrescribtionCredit Prescribtion Excise Exemption SchemeExcise Exemption Scheme Exemption under Direct Tax LawsExemption under Direct Tax Laws

States/UTs have their own packages of States/UTs have their own packages of facilites and incentives for SS.They facilites and incentives for SS.They are as following;are as following;

Tax subsidiesTax subsidies Power tarrif subsidiesPower tarrif subsidies Development of industrial estatesDevelopment of industrial estates Capital investment and many more.Capital investment and many more.

OBJECTIVES OF OBJECTIVES OF REGISTRATIONREGISTRATION

To enumerate and maintain a roll of small To enumerate and maintain a roll of small industries to which the packages of industries to which the packages of incentives and support are targatedincentives and support are targated

To provides a certificate enabling the units To provides a certificate enabling the units to avail statuory benefits.to avail statuory benefits.

TO serve centres of collection of statisticsTO serve centres of collection of statistics TO create nodal centres at Centre,States TO create nodal centres at Centre,States

and District leveland District level

FEATURES OF THE FEATURES OF THE SCHEMESCHEME

DIC is the primary registrating centreDIC is the primary registrating centre Registration is voluntary and not Registration is voluntary and not

compulsorycompulsory Two types of registration is done in all Two types of registration is done in all

states i.e.provisional and permanentstates i.e.provisional and permanent PRC is normally valid for 5 years are PRC is normally valid for 5 years are

permanent registration is given in permanent registration is given in perpetuity.perpetuity.

PROVISIONAL PROVISIONAL REGISTRATION REGISTRATION

CERTIFICATE(PRC)CERTIFICATE(PRC) This is given for the pre-operative This is given for the pre-operative

period and enables the units to obtain period and enables the units to obtain the term loans and working capital.the term loans and working capital.

Obtain facilities for Obtain facilities for accommodation,land, other approvals accommodation,land, other approvals etc.etc.

Obtain various necessary NOCs and Obtain various necessary NOCs and clearances from regulatory bodiesclearances from regulatory bodies

PERMANENT REGISTRATION PERMANENT REGISTRATION CERTIFICATECERTIFICATE

Enables the unit to get the following Enables the unit to get the following concessions;concessions;

Income –tax exemption and sales tax Income –tax exemption and sales tax exemptionexemption

Incentives and concessions in power tariffIncentives and concessions in power tariff Price and purchase preference for goods Price and purchase preference for goods

producedproduced Availability of raw material.Availability of raw material. Permanent registration of tiny units should Permanent registration of tiny units should

be renewed after 5 years .be renewed after 5 years .

PROCEDURE FOR PROCEDURE FOR REGISTRATIONREGISTRATION

A unit can apply for PRC for any items A unit can apply for PRC for any items that doesn ‘t require industrial licensethat doesn ‘t require industrial license

Units applies for PRC in prescribed Units applies for PRC in prescribed applicationapplication

PRC is valid for five years.PRC is valid for five years. Once the unit commences production,it Once the unit commences production,it

has to apply for permanent reg.has to apply for permanent reg.

The following form basis of evalution;The following form basis of evalution; The unit has obtained all necessary clearances.The unit has obtained all necessary clearances. Unit does not violate any locational registration in Unit does not violate any locational registration in

force,at the time of revaluation.force,at the time of revaluation. Value of plant and machinery is within limits.Value of plant and machinery is within limits. Unit is not owned,controlled or subsidiary of any Unit is not owned,controlled or subsidiary of any

oter industrial undertaking as per notification.oter industrial undertaking as per notification.

DE - REGISTRATIONDE - REGISTRATION

A SS unit can violate the regulation in the A SS unit can violate the regulation in the following ways;following ways;

It crosses the investment limits.It crosses the investment limits. It starts manufacturing any new item that It starts manufacturing any new item that

require an industrial license.require an industrial license. It does not satisfy the condition of being It does not satisfy the condition of being

owned,controlled or being a subsidairy of owned,controlled or being a subsidairy of any other industrial undertaking.any other industrial undertaking.

CANCELLATION OF CANCELLATION OF REGISTRATIONREGISTRATION

The registration of SS unit can be cancelled on the The registration of SS unit can be cancelled on the following basis:following basis:

The unit remained closed continuosly for more The unit remained closed continuosly for more than one year.than one year.

The unit fails to give full and true information The unit fails to give full and true information required by the registering authority.required by the registering authority.

The unit has misutilised the raw-material The unit has misutilised the raw-material allocated to it.allocated to it.

The affected unit is at liberty to file appeal against The affected unit is at liberty to file appeal against cancellation of registration.cancellation of registration.

OTHER LEGAL OTHER LEGAL CONSIDERATIONSCONSIDERATIONS

Constructing the building.Constructing the building. Getting Utility Connections.Getting Utility Connections. Men,Machinery and Material.Men,Machinery and Material. Filling the Entrepreneurs MemorandumFilling the Entrepreneurs Memorandum Approvals.Approvals. Exemption from Compulsory License.Exemption from Compulsory License. Environment and Polluted Related Environment and Polluted Related

Clearances.Clearances. Quality Certification.Quality Certification.

PROVISIONAL PROVISIONAL REGISTRATIONREGISTRATION

The app.is accepted for Provisional The app.is accepted for Provisional Registration as SSI/SSSBE unit for the Registration as SSI/SSSBE unit for the manufacture of items as stated in the app. manufacture of items as stated in the app. Form;Form;

The endorsed app. Form is a part of the The endorsed app. Form is a part of the certificate of registration.certificate of registration.

The provisional registration is valid for a The provisional registration is valid for a period of five year.period of five year.

The provisional registration will The provisional registration will autimatically lapse at the end of the autimatically lapse at the end of the validity period.validity period.

If an applicants is unable to set up the unit If an applicants is unable to set up the unit within the validity period,the unit has within the validity period,the unit has option to apply a fresh provisional option to apply a fresh provisional registrationregistration

The provisional registration is given to The provisional registration is given to enable the unit to obtain all clearance etc.enable the unit to obtain all clearance etc.

The provisional registration is subject to The provisional registration is subject to any condition that may be imposed by the any condition that may be imposed by the Registrating Authority.Registrating Authority.