Over time, the manufacturing industry has seen a steady boom in its growth throughout the country. Several schemes such as ‘Make in India’ have given an added spurt to this industry, which is now expected to be the 5th largest manufacturing country world over by the end of this year. To be able to safeguard the workers, and to affirm that factory owners are giving them a healthy and sound work environment, the Indian government has introduced the Factory Act 1948 which mandates that all factory owners should have their properties registered with the concerned authorities. The Factories and Boilers department is the designated body that ensures that workers are well taken care of.
What are some of the guidelines that need to be followed by factory owners under the Factory Act 1948?
The government of India requires the following mentioned types of factories to adhere to the Factory Act 1948.
- Factories with a minimum of 10 workers and consumer power
- Hazardous products
- Non-Hazardous products
- Factories with a minimum of 20 workers with no power consumption
Advantages of Getting a Factory License
Obtaining a factory license is beneficial to all the employees working at such establishments as it ensures the safety and well-being of these workers. Some of these advantages include;
1. Legal Benefits
The factory owner would be eligible to avail of legal benefits provided by the government, depending on the scheme chosen. More often than not, the government releases special schemes targeted towards specific industry, or business categories to promote economic growth, industry expansion, and many more targets. If an entrepreneur has a factory license or factory registration certificate in place, they can opt for such benefits without any hiccups, as it is one the most basic criteria to apply for benefits.
2. Specified Provisions for Employees
Female and young workers are looked after under this in regard to salaries, health and safety, work conditions, and the number of hours they put in. Under these provisions, the employees’ working rights are protected and are offered necessities, it is also ensured that the factory premises has working conditions suitable to business and importantly employee needs.
3. Additional Matters
Holidays, leaves, number of hours, wages, enlisting of women, enlisting children, hiring, firing and many other factors are taken care of when one gets the factory license.
4. Productivity Enhancement
Complying under the guidelines set by the Factories Act 1948 further enhances the productivity of all the workers. As these guidelines ensure suitable working conditions, fair wages, and employee wellbeing, hence, full compliance to these rules puts the factory employees at ease and helps them perform at their best level. Also, it is essential that the entrepreneur does complete the factory license renewal process whenever applicable and remains compliant with the relevant rules and regulations to maintain operational efficiency.
5. Equality
The license ensures that every employee under the establishment gets equal rights and treatment.
Procedure for Registering a Factory in India
Since it is obligatory to obtain a factory license, you need to register first and the following mentioned steps are needed to do so;
- Applicants need to completely fill out the designated form No. 2, along with the required documents and applicable fees, and submit it to the Director of Factories and Boilers
- Once the application is received, it is scrutinized by the concerned party
- The documents are also scrutinized and if all is in place, the process is sent for approval to the concerned authority
- If the documents demonstrate any discrepancy, you will need to rectify the errors and re-submit in the stipulated time-frame
- Once the approval is given, a license along with a registration certificate is provided and a cover letter shall be needed for the same
Documents Needed for the Factory License
Mentioned below is the list of the documents you will need;
- Form No. 2 fully filled and duly signed
- Fees as per the fee structure provided : Fees are subject to change, hence it is imperative to check the latest fee structure. Do not rely on third party agents promising to get the licence for you in exchange for a consultation fee, the reliable source being respective government website for accurate information regarding factory licence fees
- Director or partner resolution nominating one of them to act as the occupier
- Health and safety policy for all factories which employ minimum 50 workers : To ensure that the factory workers are compensated well, and that their health and safety is being taken care of, it is important for the business to make sure that if they are employing over 50 workers in the factory, there is a health and safety policy in place with plans and provisions to cover the workers in an event of mishap. This is imperative to proceed with factory license registration.
- Attested copy of the stability certificate issued by a recognized authority
Safety and Welfare Measures Under the Factory Act
The following safety and welfare measures will be observed when a factory license is obtained;
| Safety Measures under the Factory Act | Welfare Measures under the Factory Act |
| Machinery fencing | Washing and drying facilities |
| Working near machinery that is in motion | First aid services during emergencies |
| Prohibition of women and young adults near hazardous machinery | Rest areas for providing sitting facilities |
| Protection of eyes, ears and other sensitive body parts during work hours | Crèches, canteens and lunchrooms for all the employees |
A Checklist of all the Requirements for Obtaining the Factory Licence
The factory owner/s will be required to take permission well in advance from the State government as to where the factory will be located. To be able to occupy the premises, the owner will also need to send a legal notice to the chief inspector under the Section 7 Act a minimum of 15 days before any activity or occupancy can be achieved there. The following details would be needed at this time;
- Name of the occupier
- Address of the occupier
- Name of the manager that will run the show
- Number of employees that will be hired
- Type of manufacturing process which shall be carried out at the said factory : Nature of operations helps the authorities determine the applicable rules and regulations, and requires certifications to comply with the same. It is imperative to make sure that the nature of the manufacturing process is correctly disclosed to avoid any issues with factory license applicability.
- Any other details which require close monitoring :
Renewal Process
If the license has expired, a renewal of the same will be needed. The following mentioned procedure will need to be followed;
- A fully filled form No. 2 shall need to be submitted at renewal time
- The designated authority shall scrutinize this application
- Post-inspection, the process for approval shall begin, in case all the documents and information is in place
- Corrections, if needed, shall be done at this stage
- The application will then be sent with all corrections and the right documents for approval
- The renewed license copy attested by the government authority in question shall then be sent to the owner
- A copy of the original factory license should be submitted for the renewal process along with the fees and form no.2
India’s factory registration is run by the provisions of the Factories Act 1984. This is operated by the Ministry of labour and Employment. Obtaining a license is mandatory for all and is essentially made so to ensure that the owners as well as the employees are well taken care of should there be any issues during operations. Factory work can be tedious and hazardous and workers are often overworked and underpaid. This factory license makes sure that no one is being exploited as well as people associated with the establishment are scrutinized by the government.
State Wise Websites List:
1. Andhra Pradesh – https://www.apindustries.gov.in/
2. Arunachal Pradesh – http://indarun.gov.in/ or http://indarun.gov.in/htm/doingbusiness.htm
3. Assam – https://ciflabour.assam.gov.in/how-to/apply-for-registrationlicencing
4. Bihar – http://udyog.bihar.gov.in/Single-Window-Clearance.aspx or https://serviceonline.bihar.gov.in/
5. Chhattisgarh – http://cglabour.nic.in/
6. Goa – https://goaonline.gov.in/Appln/Uil/DeptServices?__DocId=FAB&__ServiceId=FAB70 or https://ifbgoa.goa.gov.in/goa-factories
Gujarat – https://dish.gujarat.gov.in/e-services.htm
7. Haryana – https://hrylabour.gov.in/factory/factory/factory_terms
8. Himachal Pradesh – http://admis.hp.nic.in/ofris/
9. Jharkhand – https://shramadhan.jharkhand.gov.in/home
10. Karnataka – https://esuraksha.karnataka.gov.in/english
11. Kerala – http://www.fabkerala.gov.in/
12. Madhya Pradesh – https://mponline.gov.in/PORTAL/SERVICES/FACTORYREG/LOGIN/FRMLOGIN.ASPX
13. Maharashtra – https://mahakamgar.maharashtra.gov.in/dish-registration-and-grant-of-license.htm
14. Manipur – https://dcimanipur.gov.in/
15. Meghalaya – http://meglabour.gov.in/forms_cibf.html
16. Mizoram – https://eodbmizoram.gov.in/labour-skill-development-and-entreprenuership/online-services
17. Nagaland – https://labour.nagaland.gov.in/the-factories-act-1948/
18. Odisha – http://dfbodisha.gov.in/registration-license
19. Punjab – https://pblabour.gov.in/
20. Rajasthan – http://rajfab.nic.in/
21. Sikkim – https://sikkim.gov.in/departments/labour-department
22. Tamil Nadu – https://dish.tn.gov.in/onlineservices.html
23. Telangana – https://tsfactories.cgg.gov.in/
24. Tripura – https://factory.tripura.gov.in/
25. Uttarakhand – https://labour.uk.gov.in/pages/show/107-factory-boiler-wing
26. Uttar Pradesh – http://uplabour.gov.in/StaticPages/Registration2.aspx
27. West Bengal – https://wbfactories.gov.in/
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Factory License FAQs:
1. How can I apply for a renewal of Factory License?
An application for renewal is required to be made to the Directorate of Industrial Safety and Health, Labour Department, Government of NCT of Delhi.
2. Can the license be renewed for more than one year at a go?
The factory owner can get the license renewed for one, five, or ten years at a time. Depending upon the business plan, and the timelines that most align with the same, the business may plan to renew the licence for an appropriate period.
3. In case the application for renewal is not submitted on time, will there be a late fee?
A late factory licence renewal fees at 25% is payable, which is charged after the application for renewal is submitted. The date of submission of the application will be noted to calculate the late fee.
4. Who is eligible to apply for a Factory License?
Every manufacturing unit is eligible to obtain a Factory License. The entrepreneur should have a factory plan in place, apply for suitable licenses while also fulfilling the requirements to obtain the same.
5. Can a Factory License be obtained in a residential area?
No, Factory Licenses will not be granted in residential areas. Factory license can only be secured for businesses with a legitimate operation, and a factor plan, while fulfilling all the requirements. It is essential to ensure that the factory is opened in a commercial space while complying with all the rules and regulations.
6. What is the validity of a Factory License?
A Factory License is valid for one year. However, depending upon the operations and timelines, the entrepreneur can opt to apply for a factory license with a longer duration. Also, it is important that all the compliance requirements are fulfilled, and documents required for factory licence procedures are in place, otherwise the applicant may see a rejection.
7. What is the minimum period before a factory must compulsorily apply for a license from the authority?
The government has clarified that a license must be obtained at least 15 days prior to functional start-up of the factory.
8. What are the two types of Factories broadly classified as?
Factories are broadly divided into two categories: Hazardous and Non-Hazardous. This classification is assigned depending upon the type of operations and the material being produced in the factory.
9. How is the Factory License fee calculated?
The factory license fee is calculated on the basis of no. of workers employed and installed power in HP/KW of the machinery. For accurate cost estimates, the factory operator or the business should check with the relevant authorities and not with third party agents.
10. Which Factories are considered to be hazardous?
Factories are considered to be hazardous as per the First Schedule of the Factories Act, 1948.
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