Overview of Factory License

To safeguard workers and ensure that employers provide a healthy work environment, the government introduced the Factory Act, 1948. As per this Act, every factory owner must register their premises with the local authorities before commencing operations. A Factory License serves as an official approval granted by the authorities to carry out manufacturing activities. The Department of Factories and Boilers is responsible for issuing the Factory License, ensuring that the factory complies with regulations concerning workers' health, safety, and welfare.

Additionally, any factory seeking registration under the Factory Act, 1948 must obtain approval for its building plan from the Labour and Employment Department before proceeding with the factory registration.

Guidelines for Factories
The government has established specific guidelines that factories must adhere to, which include:

• Factories with a minimum of 10 workers and consuming power
• Factories with a minimum of 20 workers and not consuming power

Factories are generally divided into two sub-categories based on the process involved:

1. Hazardous
2. Non-hazardous

Benefits of Obtaining a Factory License

The main purpose of obtaining a factory license is to ensure the implementation of safety measures that prioritize the welfare, health, and safety of employees. The following are the key benefits of acquiring a factory license:

1. Employee Provisions
   The Factory Act outlines specific provisions concerning female employees, young workers, wages, work hours, and overall working conditions to maintain a well-regulated work environment.

2. Access to Legal Benefits
   Factory owners can avail various legal benefits provided by the government under different schemes, ensuring compliance with labor laws and regulations.

3. Increased Productivity
   By adhering to the Factory Act’s compliances and guidelines, factories promote a safer and healthier work environment, ultimately leading to increased productivity.

4. Regulation of Key Aspects
   The factory license assists in regulating essential aspects of factory operations, including:

• Working hours
• Wages/payments
• Leaves and holidays
• Employment of juveniles and women
• Hiring and termination processes
• Other terms of service and conditions applicable to workers in shops, commercial establishments, and public amusement spaces.

5. Equal Benefits for Employees
   Proper compliance with the Factory Act ensures that every employee receives equal benefits, contributing to fair treatment and improved working conditions.

Documents required for Obtaining the Factory License:

• Form-1 (Particulars of Room in the Factory)
• Copy of the factory building plan
• ID and address proof of the applicant
• A detailed list of all directors
• MOA, AOA, and board resolution
• Partnership deed, if applicable
• Bank account details
• Expected date of commencement of work
• Payment receipts
• Land deeds
• Consent from all relevant authorities
• Particulars of equipment
• Details of hazardous and non-hazardous wastes
• Information on raw materials, by-products, and finished products, along with a process flow chart
• Tax receipts

Registration Procedure of Factory License in India:

Section 6 of the Factories Act empowers the State government to monitor the licensing and registration rules.

1. Submission of Business Plan
   A detailed description of the factory or business plan must be submitted to the appropriate state government authority.

2. Approval for Plant or Machinery Changes
   If the existing plant or machinery is in working condition, the replacement or expansion is not charged.

3. Obtaining Factory License
   The process for obtaining a factory license involves the following steps:

   • Filing Application
     The application must be submitted in Form-1 along with all required documents.

   • Submission of Documents
     All necessary documents must be provided to the authorities.

   • Payment of Fees
     The requisite fees for the license must be paid after the application is approved.

   • Obtaining License
     Once the department is satisfied with the application, documents, and payment, the license will be issued.

4. Submission of Factory Plan
   The factory plan must be submitted according to the rules set by the state government. Prior consent is required for any expansion or construction by the state government or chief reviewer.

5. Details Required from Owner
   The factory owner must provide the following details:

   • Type of manufacturing process
   • Number of employees
   • Factory name and owner's name
   • Factory address
   • Factory manager's name
   • Details of machinery used

6. Application Filing
   The application for approval should be submitted in Form-1 along with all duly signed documents.

7. Payment of Fees
   After the application is approved, the fees for the license must be paid.

8. Grant of License
   After the inspection, if the department finds all documents and application forms in accordance with required norms, the factory license will be granted.

Factory License Renewal

A Factory License is valid for up to one year and must be renewed before its expiry. The process for renewal is the same as the registration process. The documents required for the renewal of a Factory License are:

• Form-4
• Form-4B
• Treasury or Online Challan

In case of a default in the renewal of the Factory License, a penalty of at least 10% of the license fee is prescribed, which will increase by 10% every month.

Process for Suspension of a Factory License Voluntarily
If the licensee wishes to voluntarily surrender the factory license to the government, the following process must be followed:

1. Application for Suspension
   Submit an application for suspension, stating the reason for the request.

2. Attach Required Documents
   Provide all the necessary documents as required by the authority.

3. Provide Worker Details
   Include the details of the workers along with any grievances they may have.

4. Authority Review
   Once the application is submitted, the relevant authority will review it and take the necessary steps for the suspension of the factory license.

Fastzeal Procedure for Factory License

• Purchase a Plan for Expert Assistance
• Add Queries Regarding Factory License
• Provide Documents to Fastzeal Expert
• Prepare Application for Factory License+ Complete all Admissibility Criteria for Preliminary Screening
• Complete Procedural Actions
• Factory License at your Door Step.