Check list for taking warehouse on lease or outsourcing warehousing activity
Warehouses play a key role in the supply chain of an organisation. They play integral role between the factory and market place to ensure that goods manufactured in plant are delivered safely and timely manner to dealers or end user. According to the report ‘Warehousing Market in India 2021’, the warehousing industry which valued at 1,050 billion in 2020 is expected to expand at a CAGR of 14.86 per cent between 2021 and 2025, taking the value to 2,028.86 billion by 2025. This speaks loud about the importance of warehouses any business.
Selection of right warehouse is key commercial decision to ensure business continuity and maximize the profit. Mostly selection criteria of warehouse are based on commercial and location aspect with some minor elements of legal compliance. However, we should give due importance to legal and compliances aspect as any deficiency may impact the operations at warehouse resulting in revenue and business losses.
Based on our experience of setting up Compliance Systems across more than 200 Corporate and conducting compliance reviews, we hereby suggest few of the critical check points from the legal and compliance point of view before taking warehouse on lease or outsourcing warehousing activity:
- Documents for Ownership/Right to use
- Right to sublease the property, in case of sublease
- Land use
- Permission for the building from the authorities
- Approvals under environment laws
- Approval for DG set
- Fire NoC
- Registration under Labour Laws
- Approval for storage of diesel
- Adherence to National Building Code
- Fire fighting arrangements
- Test report of fire fighting equipment’s
- GST registrations
- Trade license
- Approved electricity connection
- Approvals for erection of lift
- Arrangement for testing and maintenance of lifts
- Registration under Warehousing and Development Regulation Act, if storing agricultural produce;
- Approvals from custom authorities , if located in custom area;
- Registration of Private Security Agency.
- Arms license if security guards have arms
- Approval for ground water extraction in case extraction of ground water;
- Approval connection for water supply
- Agreements with vendors authorized by Pollution Control Board for collection of hazardous, plastic , bio medical and e-waste
In our next article we will cover the compliance aspects during operations of warehouse both for corporate and warehouse.
Disclaimer: This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts.