How to Start a Factory License

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A Brief Overview of Factory License

To secure the workers and ensure that the owner provides a healthy environment, the government has introduced the Factory Act 1948. According to the Factory Act 1948, factory owners must register their premises with the local authorities before commencing their business. A factory license is a document of approval authorities provide to carry out manufacturing activities. The authority of factories and boilers issues Factory licenses. The Factories and Boilers Department must check labour, health, and welfare.

In addition, a factory registered in the Factory Act, 1948 must obtain its building plan approval from the labour & employment department before covering itself for a factory license.

Guidelines to be adhered to by the Factories

The government has declared the Guidelines that are required to be followed by those factories are:

  1. 10 or more labours are involved in manufacturing activity with the aid of power on any day of the preceding 12 months or
  2. 20 or more labours are involved in manufacturing activity without the aid of power on any day of the preceding 12 months.

Before starting construction, reconstruction of a factory, or in the event of factory expansion, the entrepreneur or applicant must apply for approval of the factory plan and obtain permission for construction.

Benefits:

The main motive for getting the factory license is to ensure that appropriate safety measures are adopted to promote the employees' safety, health, and welfare. The benefits of obtaining a factory license are given below-

  • It is Municipal approval for performing business
  • It will help in applying for other licenses
  • It is one of the essential licenses for running a factory
  • Protect from the penal provision led down under factories act 1948

Documents required for Obtaining the Factory License

  1. Form-1 (Particular of Room in The Factory)
  2. Copy of the factory building plan,
  3. Id and Address proof of the applicant
  4. A detailed list of all directors
  5. MOA, AOA, and Board resolution
  6. Partnership deed, if any
  7. Bank account details
  8. Expected Date of commencement of work,
  9. Payment receipts
  10. Land deeds
  11. Consent from all authorities
  12. Particulars of equipment
  13. Particulars of hazardous and non-hazardous wastes
  14. The flow chart includes particulars on raw materials, by-products, finishing products, and the process procedure.
  15. Tax receipt.

Procedure for obtaining factory license:

Section 6 of the Factories Act authorizes the government of the state to control the licensing and registration rules of factories under the act on the following matters:

Step 1; Submission of the plan: The state government can lay down rules for submitting plans or representing manufacturing facilities. The association includes the State government or Chief Reviewer's prior consent to the construction or expansion of any industrial facility.

STEP 2: Details by owner:

  1. Manufacturing process type
  2. Number of employees
  • Name of the factory and its owner
  1. Address of the factory
  2. Name of the manager
  3. Information on machinery deployed

Step 3: filing of Application: must apply for approval in the mentioned form (form-1) accompanied by required documents.

Step 4: payments of fees: After applying for the application, submit the application fees for the license.

Step 5: verification & inspection: If the application and proposals are by the legislative requirements of the Factories Act, 1948 and Factories Rules, 1950, the Factories Director shall approve the factory plan after reviewing the recommendations of the Deputy Factories Director concerned.

Step 6: Grant of license: After submitting fees and inspection is Department is satisfied that all documents and application forms are according to desired rules & norms, and then the Department issues the license.

Procedure for suspension of a Factory License

In case the licensee needs to capitulate the factory license to the government, it should follow the below-mentioned process - 

  • Apply for suspension with the reason for the same.
  • Attach the necessary documents.
  • Please provide the information of the workers along with their grievances.

Once the application is submitted, the department will take the necessary steps for the suspension of a factory license.

Penalties:

If any person violates the rule made by the factories act 1948, they will be penalized according to the act.

  1. Imprisonment for a term which may extend to one year, or
  2. Fine, which may extend to one lakh, or both.

SWARIT Advisors process for Factory License

  • Purchase a plan for expert assistance
  • Query regarding factory license
  • Provide documents to SWARIT Advisors
  • Complete procedural actions
  • Factory license at your doorstep.

Frequently Asked Questions

The factories are approximately divided into two sub-categories:-

  • Hazardous
  • Non-Hazardous.
  • Every manufacturing unit is eligible to get a factory license.

    A manufacturing factory employing 10 or more labours with the aid of power or 20 or more labours without the aid of power can be granted the factory license.

    No, cannot grant a factory license in the residential area.

    The license remains valid for one year.

    Documents are required for the renewal of the factory license:

    • Form-4
    • Form-4B
    • Treasury/online challan.

    Following are the required steps for obtaining the Factory License:

    • Application
    • Documentation
    • Payment of requisite fee
    • Obtaining a license.

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