4.1.3 Business Premises
Figure 12
Factory Land While setting up a factory, acquiring industrial land with a clear title is the key step. State governments have identified industrial corporations which develop land for industrial use. These industrial corporations require that an application be submitted specifying the desired area size along with the proposed business plan. Applications are reviewed and merits considered before land is allotted. The process is not time bound and is subject to availability.
Office Space At the time of the incorporation of the company, it is mandatory to submit particulars of the registered office. Business entities are free to buy or lease office space. The common practice is to use real estate agents, who charge a fee of 1 to 2 per cent of the sale value and, in case of lease, 1 to 2 months rental.
4.1.4 Factory Construction
Taking business premises on lease
( i) Agree terms with the real estate agent, if involved( ii) Always carry out a due diligence of the title deed.( iii) Ensure the lease agreement is vetted by a lawyer( iv) Register the agreement with the regional sub-registrar / judicial authorities( v) Ensure clear clauses on termination, payment of utilities, repairs, etc
Once the land is identified and before commencing construction, the company has to submit a factory plan which will normally require an approval by the concerned industrial corporation. Each state industrial corporation has their own building bye-laws. In addition, there are other clearances or approvals 10. Once construction is complete, an industrial corporation normally requires the company to obtain a completion certificate.
4.2 Human Resources – Hiring & Management
The working population of India consists of three categories: organized work force, unorganized work force and self-employed individuals. The organized sector accounts for a tenth of India’ s labor force but earns a fourth of the nation’ s total wages and income.
4.2.1 Legislative Provisions
The laws governing labor in India, listed below, are somewhat complex. In general, the employment legislation normally addresses concerns of the blue collared staff. Employers are commonly required to provide employees with written terms and conditions of employment. The agreement should detail salary, hours of work, disciplinary rules and complaint procedures, the notice period for termination, holidays, the provident fund, pensions, gratuities and other employee related details. Violation of labor law is viewed with strictness.
10
Schedule 4
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