Factory License Registration in Andhra Pradesh - Process, Fees & Documents

The components for factory license registration fees in Andhra Pradesh depend upon a variable sliding scale. This fee is typically determined by the maximum number of workers employed on any day, total HP (Horsepower), and Kilowatt (KW) installed in the factory.

• The applicants have to pay a simple interest of 2% per month, or part of the month, which shall be payable on the difference of the fee not paid. In case the application is rejected, applicants will get a refund within thirty days of the date of the order.
• For transferring a license from one owner to another, there will be personal delivery charges, and the applicable fee for the license transfer will be ₹50/- only.

Factory License is a valid certification required by occupiers before constructing, extending any manufacturing entity in the prominent areas of Andhra Pradesh.

The license is granted by the Directorate of Industrial Safety and Health that grants permission to construct, expand manufacturing units. Occupiers have to get prior permission from the respective authority in advance before operating business operations.

The core difference between them lies in the roles and responsibilities towards a factory or a business. An occupier holds supreme administrative, financial, and policy control. On the other hand, a factory manager is an employed professional hired by an occupier to supervise factory operations.

Go through the table given below to have a better understanding of the concept:

In Andhra Pradesh, a factory license is a legal requirement under the Factories Act, 1948, for establishments engaged in manufacturing processes and certain other specified activities. Obtaining a factory license offers several benefits to both the government and the business owner:

• Legal Compliance - Obtaining a Factory License ensures that the business complies with the legal requirements outlined in the Factories Act. This helps in avoiding legal issues and penalties for non-compliance.
• Safety and Health Standards - The Factories Act mandates certain safety and health standards for factories. Obtaining a Factory License ensures that the business adheres to these standards, providing a safe and healthy working environment for employees.
• Regulatory Oversight - The issuance of a Factory License involves inspection and approval from the Factory Inspectorate. This regulatory oversight helps in maintaining and improving workplace conditions.
• Employee Welfare - The Factories Act includes provisions related to working hours, leave policies, and welfare amenities for workers. By obtaining a Factory License, a business demonstrates its commitment to the welfare of its employees.
• Insurance Coverage - Some insurance companies may require a valid Factory License as a prerequisite for providing insurance coverage to the factory. This can be crucial in mitigating financial risks associated with accidents or other unforeseen events.
• Government Monitoring - A Factory License facilitates government monitoring of industrial activities. This is essential for planning and implementing policies related to industrial development, labor welfare, and environmental protection.
• Access to Government Incentives - In some cases, having a valid Factory License may make the business eligible for government incentives, subsidies, or support programs aimed at promoting industrial growth and compliance with regulations.
• Credibility - Possessing a Factory License enhances the credibility of the business. It signals to customers, suppliers, and other stakeholders that the business operates within the legal framework and is committed to maintaining high standards.
• Environmental Compliance - Factories are often required to adhere to environmental norms. The Factory License process may include checks to ensure that the industrial activities do not adversely impact the environment, promoting sustainable and responsible business practices.
• Facilitates Expansion - When a business plans to expand its manufacturing operations in Visakhapatnam, Vijayawada, Guntur, Tirupati, Kakinada, Nellore, Anantapur, Chittoor, and Ongole, having a valid Factory License is crucial. It streamlines the process of obtaining necessary approvals and permits for expansion.

It's important for businesses to be aware of the specific requirements and conditions associated with Factory Licenses in Andhra Pradesh, as there are variations in regulations in different states.

According to the Factories Act, 1948, Section 2 (m), a factory is defined as any premises that include the following criteria:

• Ten or more workers working, or were working on any day of the preceding 12 months, and in any part of where a manufacturing process is being carried on with the aid of power.
• Twenty or more workers are working, or were working on any day of the preceding 12 months, and in any part of which a manufacturing unit is being carried on without the aid of power
• Any premises carrying on a hazardous process listed in the First Schedule, irrespective of worker count

Factory license is categorised into four key categories based on worker headcount and use of power. Read the table below to understand its types in detail:

The table mentioned above outlines the license types in Andhra Pradesh for factory registration.

The difference between a factory license and a trade license primarily differs due to several factors such as their governing law, issuing authorities, and core purposes.

Factory license regulates industrial manufacturing units and worker welfare under the State Labour Authorities. Whereas a trade license grants local municipal permission to conduct general commercial and business operations in the state.

Here is a table showing the core difference between a factory license and a trade license in Andhra Pradesh:

In Andhra Pradesh, the factory license remains valid for life until cancelled by the occupier or authorities. However, it is mandatory to submit annual returns and an annual license fee before the start of each calendar year.

The renewal at regular intervals ensures legal compliance and uninterrupted compliance.

• Step 1: Log in - Access the AP Single Desk Portal and log in to an account.
• Step 2: Navigate to the Portal - Select the option for annual returns and license fee, which will redirect or sync to the MeeSeva Portal.
• Step 3: Fill out the form - Complete the return field by filling in the updated information, such as worker count, HP (Horse Power) details, and operation data.
• Step 4: Upload Documents - Attach proofs of an occupier, Aadhaar Card, PAN Card, and scanned Form No. 2.
• Step 5: Initiate Payment - Pay the auto-calculated annual license fee through the secure online payment gateway.
• Step 6: Get a Confirmation - After reviewing the application, the applicants will get a confirmation email from the authorities.

In Andhra Pradesh, a factory license is valid for life, until an applicant or occupier cancels it. But the factory owners need to file annual returns and pay an annual fee at the end of each calendar year.

Running a manufacturing unit without a valid factory license may cause a legal risk for an occupier. Anyone who breaches the act set by the Factories Act of 1948 is subject to a penalty.

As per the Factories Act, 1948, Section 92 defines the general penalties for offences:

Occupiers and Managers held a responsibility and equal liability for breaching the law. Operating without a valid factory license may impose a two-year term of imprisonment or a fine which may extend to ₹1,00,000 or with both.

As per AP Factories Rules (G.O.Ms.No.83, 2007), continuing to commit the same offence repeatedly, a fine of ₹1,000 will be charged daily. Whereas, contravention of Chapter IV, about Safety & Dangerous Operations, may lead to payment of not less than ₹25,000/- in case of death and 5,000 in case of physical injury.

After obtaining a factory license in Andhra Pradesh, follow the set of rules and regulations to avoid further cancelation and delays. Read the points below to know the guidelines and follow them: