According to the Factory Act of 1948, industries fulfilling certain requirements must get a factory license before initiating any business. Getting a factory license is a must if:
- There are at least ten workers in the factory that needs power for their operations
- The factories do not consume power but have at least 20 workers
- A factory license is required for factories that manufacture both hazardous and non-hazardous products.
If you own a factory, getting a factory license is mandatory. Failing to get one or non-compliance with the rules as stated in the Factory Act can result in a hefty penalty.
Benefits of Getting A Factory License
The benefits of getting a factory license are enlisted below:
1. Legal Conflicts
In case of legal conflicts, the factories that are registered under the Factory Act 1948 will be eligible for certain benefits. These benefits are provided by the Indian Government depending upon the scheme you choose while registering your factory.
2. Benefits For Employees
The health and safety concerns of young and female workers are addressed if the factory is registered. The specifics regarding the working hours, work conditions, salaries, etc., are monitored in this case. These specifics benefit employees in the long term.
3. Additional Benefits
Leaves, holidays, working hours, wages, and many other factors are taken care of if you have a factory license.
Factory Registration Process in India
To get a factory license, you must first complete the factory license registration formalities. The following steps will guide you while completing the factory registration:
- Step 1: Obtain a License of Factory (Form 2) required for registration and grant of factory license from the official site of the Indian government.
- Step 2: Different states will have different dedicated portals for online factory registration. You must visit the same for application, amendment of details, renewal, and all other processes related to the factory license.
- Step 3: Fill out the form with all the details and submit it with the required documents to the Director of Factories and Boilers. You shall also have to pay the application fees before applying.
- Step 4: The respective authorities will scrutinize Your application and documents thereafter.
- Step 5: If there are any discrepancies in the documents or details submitted in the form, the authorities will let you know. You will have to correct the mistakes and submit a fresh set of documents if required.
- Step 6: Once all the documents and details are verified, you will get the approval. A registration certificate, and factory license, will be provided once you send the cover letter for the same.
Websites For Online Factory License Registration
Each state has a separate portal to register and renew the factory license. The below table has the list of the states and their respective websites:
Documents Required For Factory Registration
The below documents are needed to complete the factory license registration formalities:
- Duly filled and signed Form 2
- Application fees
- An attested copy of the stability certificate shall be needed. You can get it from a recognized authority.
- A health and safety policy is required if 50 or more employees are employed in your factory.
- A director/partner resolution nominating any one of the partners as the occupier of the factory is also needed.
Additional documents like a sales deed or purchase agreement of the land, bank account proof, list of directors and managers, etc., may also be needed.
Renewal Of Factory License
Once the factory license is issued, it remains valid for up to a year. It means that you will have to renew your factory license every year. The following steps you guide you while renewing your factory license registration:
- Step 1: A duly filled license for factory renewal (Form 2) should be submitted to the concerned authority along with the required documents. You will also have to submit the original copy of the factory license along with other documents and fees.
- Step 2: The authority will scrutinize your application and documents. They shall also inform you about the mistakes present in your form or documents. You shall have to rectify the same and proceed with the application renewal process.
- Step 3: Once the inspection is completed, the authority will send the renewed factory license copy.
We hope that you have understood the procedure for obtaining a factory license in India. The provisions of the Indian Factories Act of 1984 govern the rules of factory registration. As a factory owner, you must adhere to all the regulations mentioned in this act. If you fail to abide by the rules, you may have to pay a penalty. The factory license ensures that the rights of anyone associated with the factory are protected.