Overview of Factory License
To protect the workers and to ensure that the owner is providing a healthy environment, the government has introduced the Factory Act, 1948. As per the Factory Act 1948, every factory owner must register their premises with the local authorities before commencing their business. Factory License acts as a document of approval given by authorities to carry out manufacturing activities. The Department of Factories and Boilers issues Factory License. It is the duty of the Factories and Boilers Department to keep a check on the health, safety, and welfare of workers.
Also, a factory registering under the Factories Act,1948 must obtain its building plan approval from the labor and employment department before covering themselves for a factory registration.
What Guidelines are to be adhered by the Factories under the Factory Act 1948?
The government has laid down the guidelines that are required to be followed by those Factories which-
- Have a minimum of 10 workers and consumer power.
- Have a minimum of 20 workers and do not consume power.
The factories are broadly divided into two sub-categories depending on the process-
What are the Benefits of Obtaining a Factory License?
The main motive of obtaining the factory license is to ensure that appropriate safety measures are adopted to promote the safety, welfare, and health of the employees. The benefits of obtaining a Factory License are mentioned-below-
- Provides Specific Provision for Employees
The Act specifies the provisions associated with female employees and young people, wages for employees, work hours, working conditions, etc.
- Avails Legal Benefits
The owner of the factory can avail of the legal benefits provided by the government under different schemes.
- Enhances Productivity
Proper enactment of compliances and guidelines of the Factories Act, 1948 enhances the productivity of the employees.
- Regulates Various Matter
It helps in regulating various matters such as-
• Working hours,
• Enlistment of juveniles/women,
• Hiring and termination of work,
• Other terms of service or any such conditions related to the individuals working in shops, commercial establishments, public amusement establishments, and others.
- Ensuring Equal Benefits
Proper Compliances of the Factories Act helps in ensuring that every employee receives equal benefits.
What Documents are required for Obtaining the Factory License?
- Form-1 (Particular of Room in The Factory)
- Copy of the factory building plan,
- Id and Address proof of the applicant
- A detailed list of all directors
- MOA, AOA, and Board resolution
- Partnership deed if any
- Bank account details
- Expected Date of commencement of work,
- Payment receipts
- Land deeds
- Consent from all authorities
- Particulars of equipment
- Particulars of hazardous and non-hazardous wastes
- Particulars on raw materials, by product, and finishing product along with the procedure of the process in a flow chart.
- Tax receipt.
What is the Registration Procedure of Factory License in India?
The government of India has set a simple process to procure a Factory license. The process varies in case of hazardous factory license and non-hazardous factory license. The process for obtaining a Factory License involves the following steps:-
- Filing Application.
- Submission of documents.
- Payment of Requisite fees.
- Obtaining alicense
Before applying, the applicant needs to get factory plan approval from the respective authorities. Once this approval has been obtained an applicant can start the process of obtaining a factory license.
Step by Step Process for obtaining the Factory License
Create an applicant profile with the government website of the state where the factory would be set up. The Profile shall be created by using a verified e-mail id and passport.
Filing the Application Form-1 and Form-2 with requisite details.
Upload and attach all documents mentioned with the form.
You need to submit the Payment of fees which was prescribed by the government.
Procure acknowledgment of Form -1 and Form-2.
The authority will scrutinize the application form and verify the documents.Also, in case the application is a fresh one, a factory inspector would come for a physical inspection of the site.
In case of no discrepancies, where all criteria and documentation are well met, a Conditional license is issued by the department.
Once the license is issued by the authority, the certificate can be downloaded from the web portal.
If the application has been canceled by the department the licensee can re-submit the application within 30 days after meeting the requisite corrections.
What is the Penalty Prescribed by the Authority in case of Default has been made in Factory License Renewal?
In case default has been made in the renewal of the Factory license, a minimum of 10% of the license fee has been prescribed as a penalty which shall increase by 10 % every month.
Elucidate the Process for Suspension of a Factory License Voluntarily
In case the licensee needs to surrender the factory license to the government, the below-mentioned process should be followed-
- Apply for suspension with the reason for the same.
- Attach the requisite documents.
- Provide the details of the workers along with their grievances.
- Once the application is submitted, the authority will take the necessary steps for the suspension of a factory license.
CorpBiz Procedure for Factory License
Kindly utilize the steps given above to integrate legally and securely a Factory License and get the benefits in the form of better-quality sales and satisfied employee. Our CorpBiz experts will be at your disposal for assisting you with guidance concerning Factory Licensing and its compliance for the smooth functioning of your Factory business in India. CorpBiz professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process.
It is advisable that an attorney with “Factory License experience” must be appointed to overwhelm many of the potential pitfalls that creep around within Factory License and to understand the requirement in detail. The elementary information would be mandatory from your end to start the process. The Attorney will begin working on your request once all the information is provided, and the payment is received.
CorpBiz is one of the platforms which coordinate to fulfil all your legal and financial requirements and connect you to consistent professionals. Yes, our clients are pleased with our legal service! Because of our focus on simplifying legal requirements, they have consistently regarded us highly and providing regular updates.
Our clients can also track at all times the progress on our platform. If you have any questions about the Factory License process, our experienced representatives are just a phone call away. CorpBiz will ensure that your communication with professionals is charming and seamless.
- Purchase a Plan for Expert Assistance
- Add Queries Regarding Factory License
- Provide Documents to Corpbiz Expert
- Prepare Application for Factory License+ Complete all Admissibility Criteria for Preliminary Screening
- Complete Procedural Actions
- Factory License at your Door Step!
Frequently Asked Questions
Every manufacturing unit is eligibleto obtain a factory License.
A manufacturing factory employing 10 or more workers with the aid of power or 20 or more workers without the aid of power can be issued the factory license.
No, a Factory license cannot be granted in the residential area.
The license remains valid for 1 Year.
- Treasury or Online Challan
The basic responsibilities of an occupier are to make sure-
- The welfare of workers,
- Their health conditions,
- Their work environment,
- Time of duty is well within the guidelines of the government.
In India, the Act applies to all states and all manufacturing processes and establishments. In some cases, the Act is also applicable to factories that belong to the Central/ State Government.
- Payment of requisite Fee
- Obtaining alicense.
The government has indicated that a licensee should have a factory license at least 15 days before he plans to work functional start-up of the factory.
The factories are broadly divided into 2 sub-categories-