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Factory License

Sushree Dash
| Updated: 28 Jun, 2022 | Category: Factory License

Factory License Certificate: Requirements and Process

Factory License Certificate
Reading Time: 3 minutes

The Factories Act, 1948 has mandated that all factory owners need to register their factory area with the applicable local authorities prior to commencement of any business. The Factory License is to act as an Approval Document that is issued by the respective authorities for carrying out operations in relation to the production of products.

The Factories Act of 1948 states that all factories need to mandatorily acquire licensing from the Labour and Employment Department, under the authorisation of the Government of India for getting the approval for the building plan prior to applying for registration for the factory.

The purpose of the Factory License Registration and the mandatory Renewal of the License is for ensuring the safety of the labourers employed.

Eligible Criteria for Factory License Certificate

In accordance with the Factories Act, 1948[1], a factory is mandatorily required to apply for the factories act if the following criteria are met –

  • If a minimum of ten labourers are hired for the purpose of production activities along with the aid of power within the preceding twelve months
  • If a minimum of twenty labourers are hired for the purpose of production activities without any aid of power within the preceding twelve months

Advantages of Factory License Certificate

The following pointers mentioned below are the advantages of issuing a Factory License Certificate –

  • Acts as a proof provided by the municipality granting approval for commencement of business
  • It is a License that is often listed as mandatory for the issuance of other needed licenses that are necessary for getting an approval for the production of the specific applicable products
  • It is an essential license for running any factory that also ensures the safety of the labourers employed
  • Providing protection to the labourers in case of any violence that is in accordance with the penal provisions laid down under the Factories Act, 1948
  • Ensures that all workers employed are treated with equality.
  • Enhance Productivity of labourers as the Factory License Certificate provides security to the workers against any exploitation

Documents Required for Factory License Certificate

The following documents are required mandatorily for the issuance of the Factories License –

  • Duly filled Form – 1 along with stating the particulars of the rooms of the factory
  • A copy of the Building Plan of the Factory
  • A passport–size photograph of the authorised personnel
  • Identification details and the residential address of the applicant
  • List of all the Directors of the Company along with their necessary details
  • The Board Resolution, along with a copy of the MoA and the AoA
  • A copy of the Partnership Deed, in case the applicant is a Partnership Firm
  • The details of the applicant company’s Bank Account
  • The set expected date for the commencement of business
  • Payment Receipts
  • A copy of the Land Deed
  • No-Objection Certificate from the Fire Department
  • Consent Letter from the Pollution Department and applicable authorities
  • Details of all the equipment to be utilised in the factory
  • Details of the Hazardous and Non-Hazardous to be emitted by the factory
  • Details of the Raw Materials to be utilised for production products along with the product processing flow chart
  • The Tax Receipt

Registration Process of Factory License Certificate

The following steps below are the registration procedure for the issuance of the Factory License Certificate –

  • The applicant is required to submit a duly filled Form 2 along with self–attesting all the above–mentioned necessary documents and the required fees.
  • Upon submission of the required documents, they are to be evaluated by the authorised personnel.
  • If there are any errors or faults found in the documents, the applicant is immediately reverted for rectifying the applicable documents and re–submit within the specified time duration as notified by the authorised personnel
  • A physical inspection is also conducted by the authorised personnel of the factory premises for verification purposes
  • After the approval of the documents, the approval is granted for the processing of the Certification to be issued to the applicant

Conclusion

The labourers employed by the factory establishment are often hired for manual labour in a tedious and hazardous work environment and are at a higher risk of exploitation by being overworked and underpaid. The Factory License Certificate ensures that the rights of the labourers are protected and are treated with equality.

Read our Article:Complete Checklist for factory license Registration in India

Sushree Dash

Sushree Dash has completed BBA-LLB with a specialization in IPR Laws from KIIT University. As a recent graduate, she has both legal and management internship experience in international law firms, Indian law firms and under Indian litigation. She secures good drafting skills for various legal documents in multiple fields of law. She has also published multiple research papers in reputed UGC approved international journals.

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