India’s Department for the Promotion of Industry and Internal Trade (DPIIT) has recently updated the processes for registering a business in the country. Now, most industrial undertakings must file an Industrial Entrepreneur Memorandum (IEM) in order to be recognized by the DPIIT. This new registration process is designed to improve transparency and ease of registration for entrepreneurs in India.
But what is the Industrial Entrepreneur Memorandum, exactly? Who is required to file for it, and what is the filing process? This helpful guide will answer all of these essential questions.
What is Industrial Entrepreneur Memorandum?
Per the DPIIT, IEM’s registration is intended for Industrial undertakings exempted from the requirements of Industrial Licensing under the Industries Development and Regulation Act.
IEM registration is completed in two parts: Part A and Part B. These are sometimes also referred to as IEM Number 1 and IEM Number 2.
Breaking Down IEM Part A and B
IEM Part A is for the establishment of the business. Exempted industrial undertakings must file IEM Part A in order to receive IEM Acknowledgment (Ack. Receipt). Once the Ack. A receipt is secured, the industrial undertaking must then follow up by filing IEM Part B.
IEM Part B is for the commencement of commercial production. In other words, when the undertaking is prepared to launch as a commercial business, it must file Part B. The IEM Part B filing must have an attached copy of the Ack. Receipt from Part A of the filing.
Once both Part A and Part B are filed and acknowledged, the industrial undertaking is approved to conduct business. Filing IEM Part A has a small fee (1000 rupee) attached. Part B is free to file as long as Part A has been properly filed and approved beforehand.
Who is Required to File IEM?
Not all industrial undertakings are required to file for the Industrial Entrepreneur Memorandum. The memorandum is reserved for large scale industrial undertakings, with some exceptions. Most notably, manufacturers of industrial explosives and hazardous chemicals must still obtain industrial licenses under the Industries Development and Regulation Act.
An IEM filing is also required for the manufacturing of products that are not exclusively reserved for the Small Scale Industrial sector. Thus, most
A Note on the SSI Industrial Sector
The SSI industrial sector generally refers to industries that manufacture products on the small or micro level. This includes things like toys, handcrafted goods, and many food goods.
However, if your business has produced SSI units but is now graduating into a large scale industry, you must also file an IEM in order to be approved for expansion.
How Do I Know if I Must File an Industrial Entrepreneur Memorandum?
If you are an Indian entrepreneur who wishes to launch a business that produces large scale products, you likely need to file for IEM. This filing is only required for industrial undertakings in the nation of India. If you are registering a business in any other country, you must follow local registration requirements in that region.
For most Indian entrepreneurs outside of SSI manufacturing, IEM Parts A and B are necessary filings. These filings are necessary when starting a new large scale industrial undertaking or when expanding an existing one.
Need Help Following Your Entrepreneurial Dreams?
Filing all of the necessary documents is a great place to start for any entrepreneur. But this is not the end of the journey. Once your industrial undertaking is registered, you have a lot more preparations to make. This includes steps like hiring your team, manufacturing products, and finding ways to reach your target market.
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