factory license in india

Factory License is mandatory for the factories as per the law after some strict legislation. Industrial Labour has been exploited ever since the industrial revolution has been existing. Their condition has been so miserable that it was considered indispensable to protect them. The first ever Factory Act has come in 1881. Since then the act has been amended several times. In order to remove its weakness and improve it and keep harmony this new act of 1948 has been passed. That act is known as the Factories Act, of 1948. There was a genuine need for this act; hence it has been passed in1948. This act is the revised version of the previous act. This covers all the aspects like health, welfare, safety, licensing, etc related to the labor class. Factory License also came under this new act.

In accordance with the provisions of the Factory Act, of 1948, it is mandatory for all factory owners to register their premises with the local governing authority before the start of business. The Chief Inspector of the Labour Commissioner Organization shall grant a Factory License after registration of the factory. Before going for the Factory License one must take building plan approval from the Labour and Employment Department. We can say that building plan approval is one of the many prerequisites of the Factory License.

Factory License is mandatory so that government can keep eye on the factories and protect the interest of laborers who are working in the different kinds of factories. Through this Factory License government can have records about the factories like how many factories are working in a particular place and how many workers are working in the respective premises. In short Factories Act, of 1948 came the protection of the basic fundamental rights of the workers who are working in the factories.

What is Factory?

As per section 2(m) of the Factories Act, 1948 factory is any premises where ten or more workers are working or they were working on the ant preceding twelve months, or it also includes any part of which a manufacturing process is being carried on with the aid of the power. It also includes any premises where twenty or more workers are working or they were working in the ant preceding twelve months, or it also includes any part of which a manufacturing process is being carried on with the aid of the power. There are certain things that are not considered as factory as per the Factories Act, of 1948, these things are given below-

Mines
Mobile units belong to the Armed Forces of the Union
A shed that is run by the railways
Hotel
Restaurants
Eating House

What is Factory License?

Permission taken by the government for manufacturing in a particular place or city is called Factory License. This is basically a kind of Permission given by the authorities about how to work, what to do and what not to do, and how to treat the workers and also helps the government on keeping the eye on the various activities of the factory owners. Factory Licenses can also help the government provide security to the workers working in the factories.

Guidelines that Factories must adhere

As per the Factory Act, of 1948, any factory needs to obtain a Factory License must adhered to the guidelines given below-

10 or more workers must be involved in manufacturing activity with the aid of power on any day of the preceding 12 months. It means there must be a minimum of 10 workers and also the consumer power.
20 or more workers are involved in manufacturing activity without the aid of power on any day of the preceding 12 months. It means when we are talking about without power minimum number of workers must be 20.

Rules that the Factories

The Government has established the regulations that must be obeyed by those factories which-

Possess consumer power and a minimum of 10 employees.
Have no power consumption and at least 20 employees.

Depending on the procedure, the factories are often classified into two subcategories:

Hazardous
Non-hazardous

Types of Factories

1. Hazardous- Hazardous factories mean such kinds of factories whose manufacturing process is hazardous process. As per section 2(cb) of the Factories Act, 1948 hazardous process means any process or activity in relation to an industry specified in the first schedule where unless special care has been taken, raw materials used therein or the intermediate or finished products, by-products, wastes and effluents thereof would cause harm to the person engaged or working in that factory. Also if such kinds of waste or effluents cause harm to the environment and create pollution.

1. Non- Hazardous- Non-Hazardous Factories are the ones whose manufacturing process does not include hazardous processes. It simply means that the waste or effluents of the factory do not create any harm to the workers working there or to the environment.

Benefits of Obtaining a Factory License in India

1. Provides Specific Provision For Employees- The Factories Act provides specific provisions associated with female employees and young people like wages for female employees, work hours of female employees and children, working conditions, wages, etc. This is basically done to protect the children and women. It is not discrimination against men as constitutional rights are subject to reasonable restrictions.
2. Avails Legal Benefits- The factory owner can avail of the legal benefits provided by the government under different schemes like the schemes which are there to promote start-up India or Make in India projects of the government, for which government gives tax exceptions as well. Without having a Factory Licence one cannot take benefit of such schemes of the government.
3. Enhances Productivity- Proper enactment of compliances and guidelines of the Factories Act, of 1948 which are given for achieving a very important goal related to the health of the workers, enhances the employees’ productivity which is ultimately beneficial for the factory. It helps the factory in profit maximization and in other aspects as well.
4. Regulates Various Matter-It helps in regulating various matters which are given in the Factories Act, of 1948 for the betterment of the manufacturing process and workers’ health. Some of them are given below-

Working hours of the workers working in the factory.
Wages and payments of the workers by the owner of the factory.
Leaves, like how many leaves can be taken in a month, how many of them will be paid and how many will not be paid, etc.
Holidays with respect to the month and year etc.
Enlistment of juveniles and women in the factory
Hiring and termination of workers who are working in the factory under the owner of the factory.
Other terms of service or any conditions related to the individuals working in shops, commercial establishments, public amusement establishments, etc.
Ensuring Equal Benefits-Ensuring that every worker is getting equal benefits is very necessary for the betterment of the employees. This concept of “Equal Pay for Equal Work” is also provided in our constitution indirectly. Hence it is the duty of the legislature to make sure that it has been followed properly.

Mandatory Safety, Welfare and Health Measures

Safety Measures

From section 21 to 40 of the Factories Act, 1948 safety measures has been given

Fencing of the machinery in any factory which has a moving part of the prime mover and flywheel that is connected with the prime mover is mandatory.
Only a trained adult male worker wearing tight-fitting clothes, who have a certificate of his appointment can work on or near the machinery which is in motion.
Employment of a young person in dangerous factories is not allowed.
In every factory, a suitable striking gear or other efficient mechanical appliance shall be provided, which can be used to move driving belts too fast and lose the pulleys.
If the machine is a self-acting machine then outwards as well as inwards transverse within 45 cm.
The casing of new machinery is necessary, in case you fail to do so then you may be punished with imprisonment of 3 months or a fine up to Rs. 500 or both.
Women and children are not allowed to work near the Cotton Opener.
Hoists and lifts must be made up of sound material and have the strength to carry out the things. They must be sufficiently protected.
Lifting machines, chains, ropes, and lifting tackles must be made up of sound material and have a good construction. All these must be free from defects and must have adequate strength.
Near every revolving machine, a notice must be placed which will indicate the maximum safe working speed.
Affective measures must be taken in order to ensure that the safe working pressure of such part is not exceeded.
Each and every floor, stairs, and means of access in a factory must be well maintained.
Each and every slump, pit, and opening in the floor, etc must be properly fenced or covered.
No person shall carry excessive weight in a factory. The limit of the excessive weight can be fixed by the respective state government.
Protection against eyes, dangerous fumes, gases, explosive or inflammable dust, and fire must be provided in the factory.
Power to the inspector has been given regarding the specification of defective parts and tests of stability.
There must be proper safety of buildings and machines.
A safety officer has been appointed to look after all the above-mentioned things.

Welfare Measures

From section 42 to 48 welfare measures has been given under the Factories Act, 1948

Proper washing facilities have been provided to the workers.
Facilities with respect to storing and drying cloths have been given.
In each and every factory proper arrangements for sitting should be provided for the workers working in the factory.
First Aid facilities must be there in the factory for the laborers.
Canteens are a must, on the premises of the factory.
Shelters, restrooms, and lunchrooms must be provided for the workers in the factory.
Crèches are mandatory in a factory where more than 30 women workers are employed.

Health Measures

If you see section 11 to 20 of the Factories Act, 1948

Proper cleanliness facilities must be provided to the workers in the factory.
Proper disposal of wastes and effluents.
Adequate ventilation for the circulation of fresh air and reasonable temperature must be provided to the workers for their health and security.
Effective measures have been taken so that workers will not inhale the harmful dust and fumes.
An increase and decrease in the humidity can cause ill-effect on the health of the workers hence proper safety measures with respect to artificial humidity have been taken.
There must not be overcrowding in any room of the factory.
Proper lighting, artificial as well as natural has been provided to the workers working in the factory.
Basic facilities like proper drinking water, latrines, and urinals have been provided to the workers in the factory.
There must be a sufficient number of spittoons in the factory to maintain proper hygienic conditions in the factory.

How to Register for a Factory License in India?

The State government may oversee the licensing and registration requirements of the factories Act under Section 6 of the Act.

A factory description or business strategy must be filed with the relevant state government entity.
Any replacement or enlargement of machinery or plant that is in good operating order is free of charge.

The Indian government has established a straightforward procedure to obtain a Factory license. For hazardous factory licenses and non-hazardous factory licenses, the procedures differ. The following actions are required to get a factory license:

Application filing.
submission of documentation
Paying the required fees.
Getting your license

Prior to applying, the applicant must get the appropriate authorities’ approval of the manufacturing plant. The applicant can begin the process of getting a factory license after receiving this permission.

The following steps could be followed for registering the License in India:

Step: 1: Plan Submission: The plan must be presented in accordance with the state government’s regulations. The State Government or Chief Reviewer must first provide their approval before any industrial facility may be expanded or built.

Step: 2: Owner Details: The owner is obliged to furnish the following information:

Type of Manufacturing Process
Number of personnel

The factory’s name and who owns it:

Factory’s address
The manager’s name
Information on the machinery used

Step: 3: Application filing: The application for approval must be filed in Form -1 and must include all essential supporting documentation that has been officially signed.

Step: 4: Fee payments: Once the application has received approval, the licensing cost must be paid.

Step: 5: License is issued: The license is issued by the Department upon payment of fees and inspection, provided that the Department is satisfied that all papers and the application form comply with the required regulations and norms.

Documents Required for the Factory License

Documents Required for the Approval of Site Plan

Form 1 (Particular of Room in The Factory)
Questionnaire for Form-1
Certificate for Stability
NOC Fire
UPPCB NOC
Diagram of process flow
NOC Local Body/Local Authority
NOC The Explosive Department
NOC Of Others
Copy of Building Drawing
NOC Electrical Safety
Proof of ownership of factory premises
Site notification
Article of the Memorandum
Directors’ List
Resolution on the declaration of occupier
Report on safety
Emergency Plan on-site
Policy on Health and Safety

Documents Required to Register

Photography of the establishment
Proof of identity
DIN card or PAN card
Treasury Challenge/Bank Name

Required Documents for Renewal Purpose

Form – 4
Form-4B Form
Treasury or Challenge Online

Factory License Renewal

Factory License which is provided by the government authorities is not a onetime license, it has to be renewed time-to-time. After the expiry period one needs to renew the Factory License. Follow the steps given below to renew your Factory License-

A fully filled form called Form No. 2 must be submitted at renewal time to the concern authorities
The designated authority shall scrutinize this application submitted by the applicant
Post-inspection will be done after which the process for approval shall be begin
Corrections will be suggested, if needed and they shall be done at this stage only
After the above step, the application will be sent with all corrections needed or suggested for the approval
After the valid verification the renewed license copy attested by the government authority shall be sent to the owner

If one who already have Factory License and he or she wants to surrender it, they can do so by following the steps given below-

Apply for suspension with the reason for the suspension of the Factory License
Attach the requisite documents for the same
Please provide the details of the workers along with their grievances for the above purpose
Once the application is submitted with all the requisites to the concern authorities, the authority will take the necessary steps for the suspension of a Factory License.

FAQs

Who gives Factory License in India?

For the purpose of getting a Factory License in India he is required to make an application to the Directorate of Industrial Safety and Health, Labour Department.

Is Factory License required for small business in India?

Getting a license is essential for any business, whether a large corporation or a small business as per the requirement of law. Like any other country, businesses in India must obtain various business licenses and permits; Factory License is one of them.

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