Overview of Factory License
To protect the workers and ensure that the owner provides 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. A factory License acts as a necessary paper of approval given by authorities to carry out manufacturing activities. The Department of Factories and Boilers issues Factory License. The Factories and Boilers Department must keep a check on workers' health, safety, and welfare.
Also, a factory registering under the Factories Act, 1948 must obtain its building plan approval from the labour and employment department before covering themselves for a factory registration.
Guidelines to be adhered to by the Factories
The government has laid down the guidelines that are required to be followed by those Factories which-
The factories are broadly divided into two sub-categories depending on the process-
Benefits of Obtaining a Factory License
The main motive for obtaining the factory license is to ensure that appropriate safety measures are adopted to promote the employees' safety, welfare, and health. The benefits of getting 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 factory owner can avail of the legal benefits provided by the government under different schemes.
Proper enactment of compliances and guidelines of the Factories Act, 1948 enhances the employees' productivity.
Regulates Various Matter
It helps in regulating various matters such as-
Ensuring Equal Benefits
Proper Compliances of the Factories Act helps in ensuring that every employee receives equal benefits.
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Necessary Papers required for Obtaining the Factory License
Registration Procedure of Factory License in India
Section 6 of the Act empowers the State government to monitor the Licensing and registration rules of the factories Act.
The government of India has set a simple process to obtain a Factory license. The process varies in the case of hazardous factory licenses and non-hazardous factory licenses. The process for obtaining a Factory License involves the following steps: -
Before applying, the applicant needs to get factory plan approval from the respective authorities. Once this approval has been obtained, the applicant can start obtaining a factory license.
Submission of Plan
The plan should be submitted as per the rules laid down by the state government. There is a requirement of prior consent for expansion or construction of any Industrial facility by the State Government or Chief Reviewer.
Details by Owner
Name of the factory and its owner
Filing of Application
The Application for approval is required to be submitted in Form -1 in the prescribed manner along with all duly signed necessary papers.
Payments of Fees
Payment fees for the license are to be submitted once approval of Application is obtained.
Grant of License
After payment of fees and inspection is Department is satisfied that all necessary papers and application form is as per desired rules and norms, then the license is issued by the Department.
Factory License Renewal
Factory License is valid for up to one year, and so it should be renewed before its expiry. The process for renewal of license is the same as the registration process. Necessary Papers required for renewal of Factory license are:
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.
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-
CorpBiz Procedure for Factory License
Frequently Asked Questions
Every manufacturing unit is eligible to 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.
Necessary Papers are required for the renewal of the factory license:
- 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.
Steps are required for obtaining the Factory License:
- Necessary Paperation
- Payment of requisite Fee
- Obtaining a license
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-