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Know More About FACTORY LICENCE
Introduction and Its Compliance
A Factory Licence is a mandatory legal document issued by the state government under the Factories Act, 1948, for premises where a manufacturing process is carried out with the aid of power and where ten or more workers are employed or where twenty or more workers are employed without power. The licence ensures that the factory operates in accordance with the laws regarding safety, health and welfare of workers.
Compliance includes maintaining the registers, ensuring the safety at workplace, conducting regular inspections and renewing the licence from time to time. The employer must also make sure about the compliance with environmental laws, labour laws and other industry-specific regulations are duly met.
Why It Is Needed
A Factory Licence is crucial for any business engaged in manufacturing activities. It serves as the legal proof that the factory complies to the standards laid down by the government for labour’s safety, health and welfare. Operating a factory without factory licence is illegal and can attract hefty penalties and in some cases, even lock down of the premises.
Obtaining a factory licence helps in building credibility, securing contracts with government, public and private sectors and also applying for various government schemes or certifications like ISO, MSME or FSSAI.
Benefits and Advantages
- Legal Recognition & Protection A valid Factory Licence ensures that your manufacturing unit is recognized by the law. It protecting your business from legal complications and shutdowns due to non-compliance.
- Ensures Safety & Welfare at Workplace The licensing process mandates to follow the safety standards and employee welfare regulations, minimizing accidents and improving the satisfaction of employees.
- Helps in Expansion & Investment Licenced factories can easily raise funds, enter into the contracts or expand their operations hassle free, as the investors prefer those factories that are legally valid.
- Access to Government Schemes Only those factories recognised by the government/authorities are eligible to apply for government schemes, subsidies and certifications.
- Improves Reputation & build Trust Being licenced enhances your credibility with investors and stakeholders such as vendors, customers, suppliers and government bodies.
Eligibility Criteria
- The premises must qualify as a "factory" under the Factories Act, 1948.
- Engaged in a manufacturing process with or without power.
- Employs 10 or more workers with power or 20 or more workers without power.
- Must ensure compliance with applicable safety, health and environmental norms.
- The occupier/owner should not have any previous violations of the Act.
Documents Required
- Building Plan Approval
- Layout Plan as per Factories Act
- KYC Documents of Owners/Directors (Email id, Mobile No. PAN, Aadhaar, Voter id, Bank Statement etc.)
- Incorporation documents (COI, Partnership Deed, LLP Agreement etc.)
- Sale Deed/ Rent Agreement of premises.
- Sanctioned load from authority / Latest Electricity Bill
- DPCC NOC
- Structural Stability certificate from approved architect
- Fire NOC (for premises above 250 sq metre)
- Property Tax Receipt
- Manufacturing process flow chart
Steps for Getting Registration
- Prepare Documents: Gather all necessary documents including layout plans, ID proofs and NOCs.
- Online Application: File the application through the respective State Factory Licensing portal.
- Inspection: A government official may inspect the premises to ensure safety and compliance.
- Scrutiny & Approval: Authorities review the application and documents.
- Issuance of Licence: Upon successful verification, the licence is issued electronically or physically.
- Renewal: Factory licences must be renewed annually or as per the state's regulations.
Penalties
- Operating a factory without a valid licence can lead to fines up to ₹1,00,000 or imprisonment up to 2 years.
- Non-compliance with safety norms can result in penalties, suspension or cancellation of licence.
- Delay in renewal may incur late fees and legal consequences.
Timelines
Standard Processing Time
The factory licence takes around 25 to 30 working days, depending on document readiness and government processing time.
Timelines may vary depending on document verification and government approvals.
Fee
Frequently Asked Questions
Because every great business starts with the right answers.
Any entity running a manufacturing unit with 10 or more workers using power or 20 or more workers without power, must obtain a factory licence.
No. Factory Licences are issued by individual state governments and are valid only within that specific jurisdiction.
Most states offer validity for 1 to 5 years, with the option for renewal before expiry.
In most cases, a licence is non-transferable and a fresh application must be made in case of ownership change.
Failure to renew leads to penalties and may result in closure or sealing of the factory.
Yes, many states provide online portals for factory registration and renewal.
Yes, physical inspection by a Factory Inspector is often required to assess safety compliance.
In many states, a Pollution Control Board clearance is mandatory before applying for a factory licence.
A shop licence applies to commercial establishments like offices or stores, whereas a factory licence is specific to manufacturing units under the Factories Act.
Voices of Success
Hear from those who have thrived with us and discover how businesses have transformed and grown with our expert guidance and support.
Anil Yadav
Shaperz India Grain Private Limited
“From FSSAI to Trade License, Lawfinity handled all our approvals efficiently. One-stop solution for all licensing needs.”
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