{"id":11261,"date":"2022-07-05T08:41:15","date_gmt":"2022-07-05T08:41:15","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=11261"},"modified":"2022-07-06T07:16:28","modified_gmt":"2022-07-06T07:16:28","slug":"what-is-mcd-factory-license","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/what-is-mcd-factory-license\/","title":{"rendered":"MCD Factory License: An Overview"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Factory Act 1948 came into force in the year 1940. Since then, it has served as India&#8217;s sole regulatory framework for production facilities. It mandates production-related facilities to be registered and comply with underlying conditions. We will delve into the conditions around the MCD  factory license. This blog discusses the process, eligibility, and document requirements for the MCD factory license.<\/p>\n\n\n\n<p>MCD <a href=\"https:\/\/swaritadvisors.com\/factory-license-renewal\" class=\"text-primary\"><strong>Factory License<\/strong><\/a> falls under the Delhi Municipal Corporation (DMC) Act, 1957 and the Master Plant of Delhi.<\/p>\n\n\n\n<p>Section 416 and 417 of\nthe Delhi Municipal Corporation (DMC) Act, 1957 provide for the obtainment of\nprior approval of the commissioner in writing for;<\/p>\n\n\n\n<ul><li>Business owners looking to set up an\nestablishment or factory that employs electricity, steam, water or other\nmechanical power<\/li><li>Entities intending to augment their present facility<\/li><\/ul>\n\n\n\n<p><strong>Further, can secure a factory license&nbsp;\nfor confirmation<\/strong>;<\/p>\n\n\n\n<ul><li>DDA\/DSIDC\/DI Built-up Auction\/Allotted sheds<\/li><li>Industrial area<\/li><li>Household category<\/li><li>Freehold plots<\/li><li>Relocation Scheme<\/li><li>Local&nbsp;\nCommercial Category<\/li><li>Subletting of leasehold plots and sheds<\/li><\/ul>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2b616b4893f\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2b616b4893f\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-mcd-factory-license\/#Eligibility_Criteria_for_obtaining_MCD_Factory_License\" title=\"Eligibility Criteria for obtaining MCD\nFactory License\">Eligibility Criteria for obtaining MCD\nFactory License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-mcd-factory-license\/#Benefits_of_MCD_Factory_License\" title=\"Benefits of MCD Factory License\">Benefits of MCD Factory License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-mcd-factory-license\/#Checklist_to_Apply_for_the_MCD_Factory_License\" title=\"Checklist to Apply for the MCD Factory\nLicense\">Checklist to Apply for the MCD Factory\nLicense<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-mcd-factory-license\/#Documents_Required_for_MCD_Factory_License\" title=\"Documents Required for MCD Factory\nLicense\">Documents Required for MCD Factory\nLicense<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-mcd-factory-license\/#Penalties\" title=\"Penalties\">Penalties<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/what-is-mcd-factory-license\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility_Criteria_for_obtaining_MCD_Factory_License\"><\/span>Eligibility Criteria for obtaining MCD\nFactory License<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Factories in which ten or\nmore labourers are employed with the aid of power for the manufacturing process\nand factories, which are engaging twenty or more labours without using power in\nthe manufacturing procedure, need to be registered in Delhi under the Factories\nAct, 1948.<\/p>\n\n\n\n<p>Any entrepreneur who\nwishes to reconstruct, extend, construct or take any building as a factory in\nDelhi needs to get plan approval and permission. After the establishment of the\nfactory, the factory owner or the manager has to register the factory under the\nDelhi factories act, 1948.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Benefits_of_MCD_Factory_License\"><\/span>Benefits of MCD Factory License<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Night shifts are permitted only to units having MCD factory licenses. Factory or trade must be located in an industrial area, and permission from the Commissioner of Municipal Corporation of Delhi is required.<\/li><li>Factory or trade cannot initiate operation in Delhi until having prior permission of the Commissioner of Municipal Corporation of Delhi (MCD) under the <strong>DMC Act<\/strong><sup><a href=\"https:\/\/www.indiacode.nic.in\/handle\/123456789\/1410?sam_handle=123456789\/1362\" class=\"text-primary\"><strong>[1]<\/strong><\/a><\/sup><strong>.<\/strong><\/li><li>MCD Factory License will also shield the Delhi Municipal Corporation (DMC) Act from penalty provision. Section 416 and 417 of DMC the Act provide penalty provision for non-registration.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Checklist_to_Apply_for_the_MCD_Factory_License\"><\/span>Checklist to Apply for the MCD Factory\nLicense<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to the DMC&#8217;s\nrequirements, the applicant must comply with the following norms before\napplying for an MCD factory license.<\/p>\n\n\n\n<ul><li>Production facility present in the confirming\nindustrial region<\/li><li>Tenancy Proof: Either rent agreement or property\npaper, as applicable<\/li><li>NOC from Pollution Control Committee<\/li><li>Invoices relating to the firefighting equipment.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Documents_Required_for_MCD_Factory_License\"><\/span>Documents Required for MCD Factory\nLicense<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Documents for DSIDC\/DDA\/Directorate of industries built-up\nauction\/allotted sheds.-<\/strong><\/p>\n\n\n\n<ol><li>Copy of the lease deed. If not achieved, copy of\nauction letter, possession letter, and NOC regarding trade.<\/li><li>Constitution of the firm, if any.<\/li><li>One copy of each of the site plans and critical\nplans.<\/li><li>Affidavit as prescribed (Download Annexure-5)<\/li><li>Copy of terms &amp; conditions for allotment of\nthe Shed.<\/li><li>A rough sketch shows the proposed installation\nand a list of machinery with a power load (HP) rating.<\/li><li>One\ncopy of the manufacturing process for the applied trade.<\/li><\/ol>\n\n\n\n<p><strong>Documents for Sub-letting of leasehold Plots\/Sheds.-<\/strong><\/p>\n\n\n\n<ol><li>Copy of rent receipt, license deed and rent agreement.<\/li><li>One copy of the site plan demarcating the proposed area of sub-letting and existing or amended area of the original licensee with measurements &amp; duly signed by both parties.<\/li><li>One copy of each site plan and essential plan.<\/li><li>Constitution of the firm, if any.<\/li><li>Affidavit in the recommended proforma, Which is shown in      Download Annexure \u2013 5<\/li><li>Undertaking the prescribed proforma, Which is shown in      Download Annexure \u2013 7<\/li><li>NOC from the landlord\/owner. (Download Annexure-6)<\/li><li>A rough sketch shows the proposed machinery installation and a      list of proposed machinery with a power load (HP) rating.<\/li><li>One copy of the manufacturing process for the applied trade.<\/li><\/ol>\n\n\n\n<p><strong>Documents for Local Commercial Category.-<\/strong><\/p>\n\n\n\n<ol><li>Copy of Lease Deed. If not executed, Copy the auction letter and possession letter.<\/li><li>Proof of ownership\/legal occupancy\/tenancy.<\/li><li>Copy of terms &amp; conditions for allotment of the premises by the Land Owning Agency.<\/li><li>One copy of each of the site plans and critical plans.<\/li><li>Constitution of the firm, if any.<\/li><li>Affidavit as prescribed, which is according to Download Annexure \u2013 3<\/li><li>One copy of the premises plan with dimensions (blueprint)<\/li><li>One copy of the critical plan earmarking the salient features in the neighborhood site in question along with the Zonal Plan &amp; Part      Layout Plan indicating the location.<\/li><li>Affidavit regarding no unofficial construction having been carried out, which is according to Download Annexure \u2013 5<\/li><li>A rough sketch shows the proposed machinery installation with a list of machinery with a power (HP) rating.<\/li><li>One copy of the manufacturing process for the applied trade.<\/li><\/ol>\n\n\n\n<p><strong><em>Note: will issue municipal\nfactory licenses for running factories only on the ground floor. However, in\nthe case of approved flatted factories, we will give the licenses for all\nsanctioned floors.<\/em><\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Penalties\"><\/span>Penalties<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Contravention of the\nprovisions of Section-416 of the DMC Act, 1957 would attract penalties as given\nin the Schedule 12th (Under Section 416), and at current, the same are:<\/p>\n\n\n\n<ul><li>Establishment of the factory, etc., without permission of the      Commissioner, MCD is punishable with a minimum fine of Rs. 5000\/- (Rupees Five Thousand only) and an additional penalty of Rs.50\/- per day for running the unit without approval.<\/li><\/ul>\n\n\n\n<p>Contravention of the\nprovisions of Section-417 of the DMC Act, 1957 would attract penalties as given\nin the&nbsp; Schedule 12th(Under Section 417),\nand at present, the same are:<\/p>\n\n\n\n<ul><li>Carrying on a trade without a license will attract a penalty of Rs.1000\/- (Rupees One Thousand only) and d additional fine of Rs.100\/- per day for continuing the offense.<\/li><\/ul>\n\n\n\n<p>The provisions contained\nunder sections 416\/417 &amp; 430 of the DMC Act 1957 regulate the Factory\nLicensing department. Section 416 of the DMC Act, 1957 places an obligation on\nthe person desirous of establishing any factory or workshop in which it is\nintended to employ steam, electricity, water or other mechanical power to\nobtain the prior permission of Commissioner, SDMC in writing.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Registration of factories under the Factories Act, 1948 is a fundamental regulatory requirement. Every production facility that falls under the said legislation must be registered and follow the underlying norms to stay compliant.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our Article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/the-documents-required-for-factory-license\/\">What are the Documents Required for Factory License?<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Factory Act 1948 came into force in the year 1940. Since then, it has served as India&#8217;s sole regulatory framework for production facilities. It mandates production-related facilities to be registered and comply with underlying conditions. We will delve into the conditions around the MCD factory license. This blog discusses the process, eligibility, and document requirements [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":11262,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1012],"tags":[1026],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11261"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=11261"}],"version-history":[{"count":9,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11261\/revisions"}],"predecessor-version":[{"id":11286,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/11261\/revisions\/11286"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/11262"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=11261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=11261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=11261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}