It has been said that the 21st century will be dominated by India and will be called the Indian century. India ranks 3rd in global manufacturing locations amongst 48 nations. India is a developing country. Make in India initiative has encouraged companies to manufacture goods in India. It is a program designed to facilitate investment, innovation, skill development and build the country’s best manufacturing companies. It goes with the slogan “Zero Defect Zero Effect.”
Our father has quite rightly said it of the nation, “Man becomes great exactly in the degree in which he works for the welfare of his fellow-men.”
Indian Constituent Assembly introduced The Factory Act on August 28, 1948.
What are the motives of the Factory Act 1948?
- It is social legislation for occupational safety, health, and welfare of workers at workplaces.
- The purpose of the Act is to check and control the conditions of work in manufacturing establishments coming within the factory.
- The Act includes guidelines for the annual leave of workers to ensure workers’ proper safety measures employed in factories.
According to the Factory Act Section 2(m), the definition of the factory is a premise where water, steam, or any mechanical power is used to move or work any machinery manufacturing hair, wool, cartoon, etc.
What are the criteria to term any premise or establishment as a factory?
- A premise with the aid of power having10 or more workers
- A premise without the aid of power having 20 or more workers
- A premise where the manufacturing process is being carried on
- Work is being carried on within boundaries
If the factory falls under the above criteria, the occupier would require a Factory License to carry out manufacturing activities mentioned under section 7 of the Factory Act.
The procedure of registering the factory for its license
It is mandatory to get the factory license to manufacture and run it. It is mentioned under the guidelines of the Factory Act 1948. The first step towards building your factory is registering it, and once the registration is done, the license can be availed.
Below is the procedure to apply to follow:
- The owner should fill the Form No-2 and along with all the documents and the fees prescribed; he should submit it all in the office of the Director of Factories & Boilers of his state.
- After receiving the application, everything is inspected by the concerned officer.
- After investigation, if the documents are found appropriate and proper, it is processed for approval by the Authority.
- In case any document is incorrect, the applicant is requested to submit the revised correct application in a time-bound manner.
- Once the corrected appropriate application is received, it is processed for approval by the Authority.
- After approval, a registration certificate and a license signed by the Competent Authority are sent by post to the applicant.
What are the documents required for the registration of the factory license?
Following is the list of documents required to register the factory:
- Self-attested Form No-2 or Combined application form for establishment of industries.
- Original copy of Stability Certificate.
- Safety & Health Policy for 2(CB) and other factories that employees more than 50 workers.
- Resolution of partners or Director nominating one for acting as an occupier under section 2(n) of Factories Act.
- Report of the construction completion from the management.
- Fees as per the fee structure in the shape of Treasury Challan.
What is the procedure for renewing your Factory License?
The renewal time of the license depends upon the time periods that an applicant has selected at the time of registration. The renewal fee depends upon the time period a factory owner selects to extend the license.
Below is the procedure for renewing your license:
- An applicant has to apply with filled-in Form No-2 and fee to the office of Director of Factories & Boilers of his state.
- Upon receiving the applicant, the same process of investigation is carried out.
- After inspecting if it is proper, it is processed for approval by the Authority.
- If there is any correction required, an applicant is asked to do it in a time-bound manner.
- After getting the corrected documents, it is processed for approval by the competent Authority.
- After the approval, the renewed copy of the license self-attested by the competent Authority is posted to the factory owner.
What are the documents required for the renewal of the factory license?
Following is the list of documents required to register the factory:
- Combined application or form no-2 for the establishment of industries
- Fees as per the fee structure in the shape of Treasury Challan
- Original Factory License copy
- There is also another way to apply for the Factory license, which is easy, and an individual can do it while sitting at home in front of his laptop or PC.
- Name and the Address of applicant’s Factory
- Total number of workers working
- Total Power installed in the factory
- Brief of the manufacturing process (Details about what your factory produce)
- Details of the premise
- Details of Factory Manager/ Owner
- Occupier’s basic Details: Name, Address, Email Id, Phone Number
- Details of the Land/Premise owner
How to register online for Factory License?
- Open the browser and visit the “Ease of Doing Business” website of the state you belong to.
- Applicant (applying for registration) needs to create an account by clicking the option “New Investor Registration” under Login.
- Investor (applying for renewal) needs to click on the login option at the home screen’s top right corner.
- Choose the form “Registration and Licence” and start filling the form and provide the following details:-
- Name and the Address of applicant’s Factory
- Total number of workers working
- Total Power installed in the factory
- Brief of the manufacturing process (Details about what your factory produce)
- Details of the premise
- Details of Factory Manager/ Owner
- Occupier’s basic Details: Name, Address, Email Id, Phone Number
- Details of the Land/Premise owner
- Once the registration form is submitted, it will show the fee structure
- Submit the mentioned fee online
- An investigation by the desk officer of Industries Department is done, and then it will be forwarded to the Labour department.
- The application will be check by the Concerned Inspector of the Labour Department.
- The application will be forwarded with recommendations to the Assistant Labour Commissioner(ALC) for allotment of registration.
- The allotment of the Registration number and Issuance of the license will be done.
Online registration requires no visiting places, and the registration and the license will be issued within 15 days. If there are any clarifications required, the applicant will be informed of the time it should be done.
What are the documents required that should be attached while registering online for a Factory license?
- Land paper
- ID proof of occupier
- In case of Public Ltd. Company: List of Board of Directors
- In case it is a firm with partners: A partnership deed with a list of partners is required.
- Other papers as required by Inspector
Health, safety, and welfare measures under Factory Act:
| Health Measures | Safety Measures | Welfare Measures |
| Cleanliness | Purified drinking water | Facilities for storing and drying clothing |
| Disposal of wastes and effluents | Cannot work on or near machinery in motion | Facilities for sitting |
| Ventilation and temperature | No employment of young persons on dangerous machines | First-aid appliances |
| Dust and fume outlets | Striking gear and devices for cutting off power | Canteens |
| Artificial humidification | No self-acting machines | Shelters, restrooms, and lunchrooms |
| No Overcrowding | Employment of women and children near hazardous machines is not allowed. | |
| Proper Lighting | Should have floors, stairs, and means of access | |
| Purified Drinking water | Protection of eyes and other sensitive body parts |
Advantages by licensing your Factory
It is mandatory to get a Factory license. However, there are a lot of benefits to doing it.
- Special provisions with penalties and procedure for workers
There will be no disparities between workers in penalties and benefits as all the guidelines are mentioned under the Act.
There are listed dos and don’ts for all the workers, so the owner does not need to regulate them in real-time.
- Legal Benefits
The owner of the factory will be able to avail of legal benefits provided by the government.
- Guide by Government
Everything is mentioned in the guidelines by the Factories Act 1948, which helps the factory owner to understand what should be done and what is prohibited.
These guidelines are followed by all the factory owners, which create a common knowledge in the workers and their understanding.
- Equality
The license ensures that every employee gets equal rights and treatment.
India’s factory registration process is taken care of by the provisions of the Factories Act 1948. The Ministry of Labour and Employment manages it. The Factory Act regulates the working conditions in factories and the problems related to workers’ health, safety, and efficiency.
It ensures that the owner, as well as the employees, are well taken care of. It keeps track of the welfare of workers, their pay, and even the penalties for any misdoings. This factory license makes sure that no one is exploited and the people associated with the establishment.
