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Factory License

Pankaj Tyagi
| Updated: 02 Apr, 2022 | Category: Factory License

Factory License Applicability: Mandatory Facts

factory license applicability: mandatory facts
Reading Time: 3 minutes

As per the Factory Act, 1948, every factory owner should register their facilities with the authority concerned before starting the operation. Such license serves as a legal consent for performing production related activities in a given state. In this write-up, we shall discuss factual conditions about the Factory License applicability in detail.

Factory License applicability for Factory owners

Further, the Act states that every factory owner should compulsorily secure consent from the respective Labour Department for their building plan before it becomes eligible for registration.

The Act sets out provisions for Factory license registration and renewal to ensure full-proof safety of workers.

As per section 2(m), the term “factory” refers to premises including the precincts thereof-

(i) wherein ten or more manpower are serving or were engaged on any day of the past 12 months, and in any part of which a production undertaking is being performed on with the help of power, or is ordinarily so performed, or

(ii) wherein 20 or more workforce are serving or were engaged on any day of the past 12 months, and in any part of which a production undertaking is being performed on with the help of power, or is ordinarily so performed, or –but does not entail a mine subject to the activities of Mines Act, 1952 (XXXV of 1952) or a mobile facility of the armed forces, a railway running eating place or restaurant;

To simply put, every factory falling under said Act should secure a factory licence if:

10 or more worker is engaged with the production undertaking driven by the power on any day of the past 12 months or;

20 or more workers are engaged with production-related activities (a non-power-driven facility) on any day of the past 12 months.

The applicant should authenticate the factory plan and secure consent for construction before initiating construction work, factory reconstruction, or factory expansion projects.

This is all about the factory license applicability. Now let’s drill down the common benefits rendered by this license.

Benefits offered by the Factory license

  • Enables factory owners to underpin an apt safety framework for the workers, which inherently leads to increased production
  • Prevent factory owners from breaching workers’ rights since such misconduct leads to severe penalties cited under Factory Act, 1948[1]
  • Diminishes the chances of being penalized, thereby keeping the owners on the toes all time.
  • Offers a win-win proposition for the owners as well as workers.
  • Helps in adhering to underlying conditions of Act, thereby ensuring better labour management

Now, let’s proceed to the factory license registration process.

Online Process of Securing Factory License

  1. Visit the State’s labor department portal and create your account
  2. Tap on the option called “Online registration and renewal
  3. Next, the factory registration application form shall open on the page.
  4. Submit the site plan as per Factory Act, 1948. Common documents required for site plan approval include;

  • NOC of Fire
  • NOC from the respective SPCB
  • Process Flow Diagram
  • NOC From Explosive Department
  • NOC From Local Authority
  • NOC From Electrical Safety
  • Building Drawing Copy
  • Proof for factory’s ownership
  • Notification of Site
  • List of Directors
  • Memorandum Article
  • Resolution for the Occupier’s declaration
  • Safety Report
  • Health and Safety Policy
  • On-Site Emergency Plan

5. After submitting the site plan, proceed to file factory registration form. Common details to be included in the registration form are as follow;

  • Factory name and address
  • Nature of proposed manufacturing process to be carried out in the next 12 months
  • Detail of products to be manufactured at the plant
  • Detail of proposed workforce (individual-basis)
  • Proposed power required by the facility (in Horse Power)
  • Detail of person in charge or manager
  • Detail of  partner/directors/authorized signatory depend on the type of business type

6. Calculate the application fee on the portal per se and attach the required documents

7. Once done, proceed to payment to submit calculated application fee

8. After that, the inspection formalities shall come to effect. It will be conducted by the joint team of inspectors from different departments. The said verification also includes on-site inspection as well.

9. After inspection process, the report of the same shall be shared with the authority concerned.

10. After thoroughly comprehending the report, the authority may or may not grant the license to the applicant.

Penalties in case of non-conformity with the underlying Act’s norms

If any individual is found guilty of breaching underlying norms of the factories act 1948, then he/she shall be subject to the penalties as prescribed by the Act. In general, the following penalties are levied on the defaulters in case of non-compliance.

  • Jail term up to one year (based on the level of non-compliance) or;
  • Monetary fines up to one lakhs or;
  • Both

Conclusion

So this is all about the factory license applicability and other underlying rules under the Factory Act, 1948. Keep in mind that the non-availability of a factory license attracts severe penalties. So it is advisable to secure the same on a prompt basis to avert such consequences. Connect with the Corpbiz associate in case you need some professional assistance.

Read our Article:Factory License Registration: Legalities and Benefits

Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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