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CONSTITUTION OF BUSINESS

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

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CONSTITUTION OF BUSINESS

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

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

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

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

  5. REGISTERING SSI UNIT • The main purpose of Registration is to maintain statistics and maintain in a roll of such units for the purposes of providing incentives and support services. • States may have a SIDO registration scheme and a State registration scheme.

  6. BENEFITS OF REGISTRATION • The registration scheme has no statutory basis.Units would normally get registration to benefits,incentives opr support either by the Central or States govt.these are; • Credit Prescribtion • Excise Exemption Scheme • Exemption under Direct Tax Laws

  7. States/UTs have their own packages of facilites and incentives for SS.They are as following; • Tax subsidies • Power tarrif subsidies • Development of industrial estates • Capital investment and many more.

  8. OBJECTIVES OF REGISTRATION • To enumerate and maintain a roll of small industries to which the packages of incentives and support are targated • To provides a certificate enabling the units to avail statuory benefits. • TO serve centres of collection of statistics • TO create nodal centres at Centre,States and District level

  9. FEATURES OF THE SCHEME • DIC is the primary registrating centre • Registration is voluntary and not compulsory • Two types of registration is done in all states i.e.provisional and permanent • PRC is normally valid for 5 years are permanent registration is given in perpetuity.

  10. PROVISIONAL REGISTRATION CERTIFICATE(PRC) • This is given for the pre-operative period and enables the units to obtain the term loans and working capital. • Obtain facilities for accommodation,land, other approvals etc. • Obtain various necessary NOCs and clearances from regulatory bodies

  11. PERMANENT REGISTRATION CERTIFICATE Enables the unit to get the following concessions; • Income –tax exemption and sales tax exemption • Incentives and concessions in power tariff • Price and purchase preference for goods produced • Availability of raw material. • Permanent registration of tiny units should be renewed after 5 years .

  12. PROCEDURE FOR REGISTRATION • A unit can apply for PRC for any items that doesn ‘t require industrial license • Units applies for PRC in prescribed application • PRC is valid for five years. • Once the unit commences production,it has to apply for permanent reg.

  13. The following form basis of evalution; • The unit has obtained all necessary clearances. • Unit does not violate any locational registration in force,at the time of revaluation. • Value of plant and machinery is within limits. • Unit is not owned,controlled or subsidiary of any oter industrial undertaking as per notification.

  14. DE - REGISTRATION A SS unit can violate the regulation in the following ways; • It crosses the investment limits. • It starts manufacturing any new item that require an industrial license. • It does not satisfy the condition of being owned,controlled or being a subsidairy of any other industrial undertaking.

  15. CANCELLATION OF REGISTRATION The registration of SS unit can be cancelled on the following basis: • The unit remained closed continuosly for more than one year. • The unit fails to give full and true information required by the registering authority. • The unit has misutilised the raw-material allocated to it. The affected unit is at liberty to file appeal against cancellation of registration.

  16. OTHER LEGAL CONSIDERATIONS • Constructing the building. • Getting Utility Connections. • Men,Machinery and Material. • Filling the Entrepreneurs Memorandum • Approvals. • Exemption from Compulsory License. • Environment and Polluted Related Clearances. • Quality Certification.

  17. PROVISIONAL REGISTRATION The app.is accepted for Provisional Registration as SSI/SSSBE unit for the manufacture of items as stated in the app. Form; • The endorsed app. Form is a part of the certificate of registration. • The provisional registration is valid for a period of five year. • The provisional registration will autimatically lapse at the end of the validity period.

  18. If an applicants is unable to set up the unit within the validity period,the unit has option to apply a fresh provisional registration • The provisional registration is given to enable the unit to obtain all clearance etc. • The provisional registration is subject to any condition that may be imposed by the Registrating Authority.

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