Each factory owner is required under the 1948 Factory Act to register their property with the local government before opening for business. A factory license serves as a document of authorization issued by the relevant authorities to conduct manufacturing operations. According to the Factories Act of 1948, a factory must get the labor and employment department’s permission for its building plan before applying to register as a factory. To guarantee worker safety, this act also requires the registration and renewal of factory licenses. In this article, we will discuss Factory License in India.

Section 2(m) defines “factory” as any location, including its grounds.

(i) Where ten or more employees work or were employed there on any day during the previous year, and in any area where a manufacturing operation is being carried out with the use of power or is typically done so, or

(ii) where twenty or more workers are working or were working on any day during the previous twelve months, and in any area where a manufacturing process is being carried out without the use of power or is typically carried out in that manner; however, this exclusion does not apply to mines subject to the Mines Act, 1952 (XXXV of 1952), mobile units of the Union armed forces, railway running sheds, or hotels, restaurants, or eating establishments;

A Short Glimpse of Factory License in India

Any location, including those around it, falls under the definition of “factory”—

A Factory License Registration is required when the employee count reaches 10/20 in a location where at least 20 people are employed or have been employed, on any given day during the previous year, and where a manufacturing process is being carried out. This requirement applies to any sector where a manufacturing operation is being carried out with the use of electricity or is typically carried out, and where ten or more employees are working or have worked in the previous twelve months.

Conditions required to Attain Factory License in India

 The following are the conditions that are required to be followed for acquiring Factory License in India:-

• Possess consumer influence and at least ten workers.
• Have at least 20 employees and zero power consumption.

The factories are frequently divided into two subcategories based on the procedure:-

• Hazardous
• Non-hazardous

Advantages of Acquiring a Factory License in India

Getting a factory license is primarily done to ensure that the workers’ health, safety, and welfare are advanced by taking essential safety precautions.

The advantages of getting a Factory License in India are listed below:-

Employers Are Given Special Provisions: – The Act covers the rules relating to young licensed people and female employees, employee compensation, work hours, and other areas of the workplace. 

Makes use of legal advantages: – The owner of the factory is qualified to get the legal advantages that the government provides through various programs

Productivity Gains: – The Factories Act of 1948’s regulations and guiding concepts are properly put into practice, which raises worker productivity.

Many Things are regulated: It helps in the control of several things, such as:

• Working hours,
• Holidays, Leaves, and Payments of Wages
• Young people and women are recruited
• Hiring and dismissal of personnel,
• Additional conditions of service or guidelines regarding persons who work in shops, establishments, public entertainment venues, etc.

The similarity in Benefits: – When the Factories Act is effectively implemented, every employee receives equal benefits.

Essential Documents Required for Factory License in India

Following mentioned is a list of documents that are certainly required for a Factory License in India:-

• Form-1 (Particular Room at The Factory) (Particular Room in The Factory)
• A replica of the industrial building plan, along with identification and address proof for the application
• A complete list of each director’s board, MOA, and AOA resolutions
• Any contracts for partnerships
• Information about the account
• The anticipated start of the job,
• A pay stub
• Titles to land
• The consensus among all authority
• Information about the equipment Detailed information on hazardous and non-hazardous wastes
• A flowchart of the procedure, details about the raw materials, the products themselves, and the finished goods.
• Tax statement

Procedure for getting Factory License in India

Following mentioned is the process for getting Factory License in India easily:-

According to Section 6 of the Act, the State government may be in charge of enforcing the licensing and registration requirements of the industries Act.

The applicable state government organization must receive a factory description or business plan.

It costs nothing to upgrade or replace equipment that is in good working condition.

The Indian government has set up an easy process to acquire a Factory license. The processes are different for licensing for hazardous and non-hazardous factories. To obtain a factory license, the following procedures must be followed:

• Applying
• Submitting supporting evidence
• Paying the necessary fees
• Obtaining a license

The applicant must first secure authorization for the manufacturing plant from the relevant authorities. After receiving this approval, the applicant can start the factory license application procedure.

The steps listed below could be used to register the license in India:-

Step 1: Plan submission, which must be done in compliance with state requirements. Any industrial facility that is to be extended or built must first receive the approval of the State Government or Chief Reviewer.

Step 2: Owner Information: The owner must provide the following details:

• Process Type for Manufacturing
• Number of employees
• Name of the factory and its proprietors:
• Company’s address
• Name of the manager
• Details about the equipment used

Step 3: Applying: The application for approval must be submitted in Form -1 and must be accompanied by all necessary, duly signed supporting papers.

Step: 4: Payment of fees: Following approval of the application, the licensing fee must be paid.

Step 5: A license is issued. If the Department is satisfied that all paperwork and the application form adhere to the necessary regulations and standards, the license will be awarded after payment of fees and inspection.

Penalties

If a person disobeys a factory act of 1948^[1] regulation, they will be punished by the law. The following sanctions are possible.

• A sentence of imprisonment that may last up to a year, or
• A fine that might be as high as one Lakhs, or
• Both

Conclusion

According to the Factory Act of 1948, every factory owner must register their property with the local government before starting a business. A Factory License is a document that gives the holder permission to engage in manufacturing activity. 

The Factories Act of 1948 mandates that a plant obtains approval for its building plan from the labor and employment department before registering a factory. To ensure the safety of the workforce, this Act also mandates the registration and renewal of industrial licenses. We shall talk about factory licenses in India in this article.

Many different forms of relaxation have been made available to numerous organizations in India. The MSME sector in India is the same. According to the Factory Act of 1945, factory owners must register their facilities with the local government before forming a business. An official government document that permits manufacturing activity is called a factory license. To obtain Factory License in India consult Bizadvisors professionals. They will assist you with all the documentation to final registration.

Read our article:A Detailed Overview of Factory License Procedure in India