Factory License Registration Online : Process, Documents & Fees

Under the Factories Act 1948, obtain a factory license and register with the following documents as mentioned below:

Skim the table for a better understanding:

The cost for a factory license registration may vary from state to state and depends upon several factors, such as the number of employees, size and scale, validity timeline, and machinery capacity.

Here is a table representing a state-wise registration cost with a specific portal and validity:

Renewable fees may change as per the state regulations. Businesses are advised to see the official portal for factory licenses state-wise. Keep these points in mind beforehand to avoid any inconvenience at the last moment:

• Before making a payment, check the filled details accurately.
• Submit the particular amount online using Debit/Credit or Net Banking.
• In case payment is deducted without generating a receipt, go through the “Verify Payment Status” option available in the "Action” button after 15 minutes.
• Factory Licensing Department will not be liable for multiple payments made by any applicant through an online payment gateway.
• The issue shall be liable to be resolved between the banker and the applicant only.

The Professional fees for a factory license start from ₹29,999/- only. Thereafter, applicants are required to pay the government certification fee. The govt fee for a factory license varies on the basis of eligibility criteria and the respective states.

Note: The fees are exclusive of GST.

In India, the factories are classified under two broad categories based on their operating process, such as hazardous and non-hazardous factories. The sectors which needs a factory license are alcohol, tobacco, defence, explosives, and hazardous chemicals.

Under the Factories Act, 1948, a factory license is compulsory for premises that are engaging in manufacturing activities. A factory registration certificate is pivotal for businesses with:

• Employees with 10 or more workers who use electrical power for operating their business.
• Employees with 20 or more employees without the involvement of an electricity supply.
• Handles hazardous processes regardless of the total employee count.
• An occupier/manager who is responsible for commencing the manufacturing unit.
• If no manager is named, the occupier is deemed a manager by default.

The factory license renewal process is completely different from the general registration process. Read the steps given below to know the renewable process:

• Step 1: Register or Log In: Occupiers should navigate through the State-specific labour department using industry credentials. Complete the process 60 days in advance before the expiry date of the license.
• Step 2: Complete Form 2: Fill in the required details in the blank particulars. Update worker count, horsepower (HP) capacity, and manufacturing processes.
• Step 3: Select Duration: Choose a time frame such as one, five, or ten years, depending upon state allowances.
• Step 4: Pay Renewable Fees: Submit the auto-calculated fee through online methods such as credit/debit or net banking and complete the payment process.
• Step 5: Application Inspection: The application moves to the Inspector of the Joint Director of Industrial Safety & Health for verification. Once the application is approved by the authorities, an occupier will receive a confirmation via email/SMS.
• Step 6: Download Renewed License: Access the factory license from the state-specific portal and directly download it.

The state government has set a deadline, which is often specified on 31st October every year. Missing that deadline can lead to a late fee between 10%- 25% of the renewable fee.

Factory license and factory registration accompany the entire process from applying to obtaining a license. A factory license is the act of entering establishment details into the governmental database, whereas a factory license is the official document granted by the authorities to commence the manufacturing units.

The validity period of a factory license registration is applicable commonly for one year to the end of 31st December of each calendar year. However, this can be extended for five or 10 years based on the state-specific labour department rules and the fee tier paid during the registration period.

• license is often re-issued or renewed for the base period of one year, which expires on the 31st December of the operational year.
• Time duration can be extended upfront for 5 or 10 years, depending on state provisions.
• The duration rule may change; therefore, check regularly and renew before it expires

Renew factory license 60 days before the expiry date. Operating with an expired certificate can cause legal and risk, monetary fines, and potential work suspension.

As per Section 92 of the Factories Act, 1948, violation of rules can lead to a legal and compliance risk for an occupier.

• Hefty monetary fines around ₹1,00,000 or ₹2,00,000 depending on state amendments under section 92.
• If the violation continues after conviction, ₹1,00,000 will be charged on a daily basis.
• The authorities can shut down the manufacturing unit on an immediate basis.
• Authorities can disconnect the vital supplies, such as electricity and water.

These are the following Statutory Compliances required to be fulfilled by the owner of the factory.

In India, a factory license is a legal requirement for entities and establishments involved in manufacturing processes and certain other specified activities. There are several benefits of factory license registration for both the government and the business owners:

• Legal Compliance & Safety: It ensures the business complies with the legal and safety standards of factories. Businesses can avoid legal issues and penalties.
• Employee Welfare: By obtaining a factory license, businesses contribute to employees' welfare, including working hours, leave policies, and various permit amenities.
• Access to Government Incentives: With an authorised license, businesses become eligible for incentives, subsidies, and supporting programs for industrial growth and compliance with regulations.
• Environmental Compliance: Factory license ensures that industrial activities don’t adversely impact the environment and promotes sustainable and responsible business practices.
• Facilitates Expansion: When the business expands, a legal certification streamlines the process of obtaining approvals and permits for expansion.
• Consent to Establish: Before building construction, the site layout is cleared, and work on the pollution control framework is initiated.
• Tender Eligibility: Public sector and government procurement portals treat a valid factory license and a valid CTO as mandatory pre-qualified criteria