In the past few years, especially after the COVID-19 pandemic, India has seen a sharp boost in the emergence of new businesses. With innovative ideas, people from various backgrounds have been transforming lives with low investments. To encourage and support creative minds, some non-banking financial companies provide quick MSME loans to young businesses.
Earlier, business owners had to deal with lengthy, confusing procedures to register their businesses or get licenses. From 2020, the government has simplified these procedures. Some financial firms also offer loans up to 7.5 lakhs in just three days.
Most business owners remain unaware of these procedures and get caught in legal troubles. Therefore, if you plan to establish a manufacturing MSME, here are a few vital things you must know:
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Online MSME registration
If the investment and turnover of your business do not exceed Rs. 50 cr., and Rs. 25 cr., respectively, your business falls under MSME. As a new business owner of an MSME, the first thing you should do is register yourself with Udyog Aadhar.
Online MSME registration is a big step taken by the government of India to simplify the registration process. Owners, therefore, have greater clarity and security while availing the many benefits.
From July 2020, Udyog Aadhar and Udyam registration have become one, canceling out your confusion. At the end of the registration process, your business will get a unique 12-digit identification number.
- Visit the Indian government’s official site for Udyog Aadhar registration: https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm
- Create a user profile on the portal.
- Fill the application form.
- Upload the mandatory documents: identity proof, bank details, and other personal details.
- Once you fill all the fields, you will get the Udyog Aadhar.
Note that this is a one-time procedure, and you will not have to renew the registration. This portal offers a free process and does not get fooled by scammers who ask for fees.
Procedure for factory license
The Factories Act, 1948, makes it mandatory for factories to conduct manufacturing activities only after getting a factory license. Manufacturing without it is punishable by law.
Different states follow different procedures to grant factory licenses. Though the Factories Act, 1948 applies to every region in India, the list of documents and the concerned authorities vary from region to region.
Occupiers can either meet the authority personally and fill the form or apply for the license digitally.
- Meet the local inspector and fill the given form accurately.
- Attach all the required documents as per the directions of the inspector.
- Recheck the information, sign the form and send it ahead for inspection.
- The assigned officers will check your documents, and if there are no discrepancies, your application will go ahead for approval.
The licensing website is different for every state. Following are the official state websites that you need to visit to get the factory license:
- Delhi: https://mcdonline.nic.in/ndmcportal/factoryLicense
- Haryana: https://hrylabour.gov.in/factory/factory/factory_terms
- Karnataka: https://esuraksha.karnataka.gov.in/english
- Madhya Pradesh: https://mponline.gov.in/PORTAL/SERVICES/FACTORYREG/LOGIN/FRMLOGIN.ASPX
- Maharashtra: https://mahakamgar.maharashtra.gov.in/dish-registration-and-grant-of-license.htm
- Uttar Pradesh: http://uplabour.gov.in/StaticPages/Registration2.asp
- Visit the website of the state where you will be establishing the factory.
- Create your user profile on the website.
- Give occupier details and correct information about the service you wish to provide.
- Fill the required application form completely and accurately.
- Upload all the mandatory documents on the portal in the required format.
- Recheck the information, sign the form and upload the application.
- Pay the registration and license fees online. You will not get a refund once you make the payment.
- Authorities inspect your application. In case of no discrepancies, the application will go ahead for approval.
Documents required for approval
Following is the list of documents you will generally require to obtain the factory license for hazardous or non-hazardous units:
- Applicant’s photo identity proof, bank details, and tax receipt.
For partnership firms:
- List of partners and their residential address proof. Provide other related documents as per the directions of the local authority.
- Partners’ NOC
For public ltd./ private ltd. companies:
- List of appointed directors and their residential address proof and some additional related documents as per the directions of the local authority.
- Memorandum of association
- Proof suggesting that the applicant is the director/partner for the enterprise.
- Rent agreement
- Ownership proof
- NOC from the regional administrative authority.
- Recent electricity bill/ load sanction letter.
- Manufacturing information (format as per the state regulations):
- List of raw materials, by-products, and the final sale products along with their planned quantity.
- List of machines
- Building plan and provisions for handling emergencies
- Diagram detailing manufacturing process
- Employee health and safety policy
Please note that some documents vary from state to state. Therefore, make sure you get the correct information and keep the files ready for smooth approval.
Once the authorities make sure that your application is good, they will grant you the license. You can download the issued certificate on the same website through your account.
If, however, they find faults in your application, they will reject your application. In such a case, you can apply again after 30 days.
Renewal of factory license
The factory license will be valid for five to ten years from the date of grant. Remember to file your renewal application at least 15 days before the expiry date of your license.
- Visit the website you used to apply for your factory license
- Log in with the account you used to apply for your factory license
- Choose the renewal option that will take you to an application form
- Fill in all the boxes with accurate information. Sign the form
- Upload the required documents. The list of documents for renewal is similar to the list given above. You will also have to upload your old license.
- Pay the fees online.
The renewal application will undergo the same procedure as before.
Manufacturing is a promising sector if one follows the government guidelines sincerely. Make sure you get your Udyog Aadhar number to avail various benefits.
Factory licensing is mandatory by law, and hence must be completed with the assistance of the local inspector. If you have a new small-scale business and need financial aid, you can always reach out to a promising NFBC. Hundreds of owners in India have benefited from the quick, hassle-free MSME loan that such enterprises provide.
Factory Lincense – FAQs
An authorization from authorities to carry out manufacturing functions is called a factory license. Factory licenses are issued by the Department of Factories and Boilers. Factory and Boiler Department is responsible for monitoring the health, safety and welfare of workers.
Licenses or registration under FSSAI are divided into three categories: FSSAI Central License, FSSAI District License, and FSSAI Regional License. FSSAI State License. FSSAI State Registration.
The Delhi Factories Rules, 1950, require an occupier to obtain a licence under Rule 4. The occupier must register himself on the e-District Delhi website using the “Citizen Registration Form”.
Factory registration certificates are documents of authorization granting permission to regulate and conduct manufacturing pursuits from a particular area.
An approval of the layout of the factory is required before a license for the factory can be applied for. You must first request approval of the layout. Once approval is received, the License Application can be submitted. You can skip the notice if you already applied for the layout application for the establishment.