A factory license is an authorization grant to factories and MSMEs to commence manufacturing operations. The process of factory registration is governed by the Factories Act 1948. The local factory and boiler department issues the permit.
The license is necessary to ensure the safety of workers and labourers of factory workers. Factory registration is compulsory and required by all manufacturing units. The local state authorities grant it.
If you are a new startup owner then you must comply with the Factory Act 1948. It is mandatory for authorization to start a manufacturing business within Indian boundaries without facing any issues or legal penalties.
Therefore, We at ELT Corporate help to provide you with deep knowledge about how to apply Factory License online without less paperwork and hassle.
What Is a Factory License?
A factory registration certificate or factory license is a mandatory government authorization that is provided by the government for the factories operating in their respective states. The license aims to assure the working environment and safety of the workers. Factory registration is a very crucial document provided by the authorization granted to local authorities in respective states.
Who Needs Factory License?
Any business that is willing to build a start-up as a factory as defined under the Factories Act, of 1948 requires a factory license in their respective states. If you start a factory without this license then you must find multiple drawbacks. This Includes:
- Manufacturing units employing ten or more workers with power or twenty or more workers without power.
- Facilities involved in processing, altering, or manufacturing any goods or articles.
What is the Importance Of Factory License?
The factory license is mandatory and important to have because it helps the factory owner to boost the business and run it according to the legal regulatory standards. It is crucial because:
- It ensures compliance with safety and labor regulations.
- It helps in monitoring and controlling the safety, health, and welfare of workers.
- It is a mandatory legal requirement to operate a factory.
- It helps in gaining trust and credibility from stakeholders.
Eligibility For Obtaining a Factory License
If you want to obtain factory license then you must get to know whether you are eligible for this or not. To be eligible for a factory license, the following criteria must be met:
- The factory premises must be used for manufacturing or processing activities.
- As per the Factory Act, the factory must meet the threshold of workers employed.
- Compliance with local zoning and building regulations is necessary.
- When a factory has ten or more workers involved in manufacturing activity with the aid of power
- When a factory has 20 or more workers involved in manufacturing without the aid of power.
Benefits Of Factory Registration Certificate
If you obtain the factory license for your factory premises then you will enjoy multiple benefits of it. The factory license provides the following benefits:
- Legal recognition and compliance.
- Enhanced safety and health standards for workers.
- Avoidance of legal penalties and fines.
- Eligibility for government schemes and subsidies.
- Improved reputation and trust among clients and partners.
What Are The Factory License Requirements?
When you apply for the factory license online then you must check the requirements including:
- Detailed layout plan of the factory.
- Details of manufacturing processes and machinery used.
- Compliance with safety, health, and welfare provisions.
- Employment details of workers and working hours.
- Environmental clearance, if applicable.
Online Factory License Registration Process
Under the Factory Act, section 6 empowers the state government to monitor or grant licenses and registration. The process to apply for the factory license is as follows:
Plan Submission
To the state labout department the factory owner must submit the factory plan. The plan must be submitted before the expansion and construction of the factory. If the factory plan is approved the factory owner must apply for the factory licence.
Filing application
A factory owner can apply to apply for factory lines online and offline. The application must be submitted to the state’s labour department or department of factories. Make sure you will submit this application with all the duly signed documents.
Fee Payment
Pay the prescribed fee for the application of a factory certificate to obtain it. If you missed this then the file must not be completed.
Grant of factory license
After the fee and verification of factory premises and documents by the respective authorities the license will be granted to the factory owner.
What Is The Factory License Online Application Process?
The factory license online process varies from state to state. The license you can easily obtain via:
- Visit the state Labour Department or the Department of Factories website.
- Under services, click on ‘Factory Registration’.
- Create an account and log in, if required.
- Fill out the application form,
- Upload documents
- Submit application
- Pay the prescribed fees.
- The respective department will inspect the application and grant the factory license.
What are the Documents Required for the Factory License?
When you apply for the license online then you have to attach a compile list of all the documents. List of the documents required for factory license as follows:
- Application form duly filled and signed.
- Owner ID and address proof
- Address proof of factory premises or location, such as rental agreement or electricity bill
- Pollution Department consent letter
- NOC from the fire and water department
- Business PAN card copy
- Factory layout and building plan
- List of directors
- Board resolution or partnership deed
- Particulars of equipment and raw materials
- Particulars of hazardous and non-hazardous wastes
- Tax receipt, if any
How Can You Download The Factory License Online?
Once your application is approved, you can simply download the Factory license online from the state’s labour department portal by logging into the account and accessing the issued licenses section.
What Is The Validity Of Factory License In India?
The license is valid for typically ranges from 1 to 5 years. It also depends on the state regulations and the type of manufacturing unit. The Factory license renewal must be done before the expiry of the current license.
What Is The Factory License Fee?
The factory license fees vary by state & depend on multiple factors also such as:
- Number of workers employed.
- Power load of machinery.
- Type and scale of manufacturing processes.
Is Factory License Mandatory?
Yes, As per the Factory Act 1948, obtaining a factory license is mandatory for all factories. If you are operating a factory without a valid license then it can lead to legal penalties & closure of the unit.
Is a Factory License Required For MSME?
Yes, If the MSME runs the factory and meets the Factory Act criteria then you must have a Factory license in India.
When Factory License Is Required?
The license is required before the commencement of manufacturing operations. It must be obtained once the factory setup is completed and ready for operation.
Is GST Applicable To Factory License Fees?
As of the latest regulations, GST does not apply to the fees paid for obtaining a factory license. These fees are categorized as statutory fees and are exempt from GST.
