Factory License Registration in Karnataka

The registration fees in Karnataka for a factory license depend totally on the maximum number of workers employed and the total horsepower installed (HP) or kilowatt (KW) installed. These fees are prescribed under the Karnataka Factories Rules.

As per Rule 5 (1) of the Karnataka Factories Rules, the fee dynamics are shown below:

The professional fees for a factory license registration at Professional Utilities start at ₹35,399/- only. However, occupiers have to pay a government fee separately, which depends entirely on their factory size, scale, validity time, and total number of employees.

The professional fees are inclusive of GST, which is 18% of the professional fees.

To apply for a factory license in Karnataka online, register on the Department of Factories, Boilers, Industrial Safety & Health Portal, get a factory plan approval, fill Form 2, upload necessary documents, make a payment, and get a license easily. Here is the step-by-step process for a factory license registration in Karnataka:

• Step 1: Apply for a Building Plan
  Draft building structural drawings, a site plan, layout, and a clear land title with the help of a professional architect to comply with the local municipal rules.
• Step 2: Get Clearances
  Get Non-Objection Certificates or clearances from key authorities such as the Karnataka State Pollution Control Board (KSPCB), Fire NOC, and local governing authorities.
• Step 3: Submit Form No. 1
  Fill the application form (Form 1) and get it signed by the occupier or manager and submit for a building plan approval. The Chief Inspector of Factories will verify the documents and items and approve construction or extension.
• Step 4: Register in the Portal
  Navigate to the FBIS portal and register as a new user with mobile credentials.
• Step 5: Fill Form 2
  Provide the necessary details about the factory, general manufacturing details, and workers statistics.
• Step 6: Upload Scanned Copies
  Attach all the required documents in the prescribed PDF format only, and the size should not exceed 2 MB.
• Step 7: Complete Payment
  Pay the fees shown on the screen based on the maximum number of installed HP and the total number of workers in a year.
• Step 8: Submit License Form
  After initiating the payment online, submit the application form for further inspection and investigation. The Chief Inspector of Factories will examine the factory and installed machinery.
• Step 8: Track Application
  Navigate to the FBIS portal and check the application status. The applicants will get a unique case number. They can use this unique number to access the application status further.
• Step 9: Access E-Factory License
  Download the certificate by checking the status from the FBIS portal and start commencing operations.

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

• 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 Mysuru (Mysore), Hubli-Dharwad, Mangalore, Belgaum (Belagavi), Davangere, Gulbarga (Kalaburagi), Shimoga (Shivamogga), Tumkur (Tumkuru), or Kolar, having a valid Factory License is crucial. It streamlines the process of obtaining necessary approvals and permits for expansion.

A factory license in Karnataka is necessary for all manufacturing entities that are engaged in some production activities. As per the Factories Act of 1948, any factory or its precincts are defined as a factory and need to apply for a license:

• Factories employing 10 or more workers which are involved in manufacturing activities with the aid of power.
• Factories employing 20 or more workers and involved in manufacturing activities without the aid of power.

The total days for processing a factory license are approximately 60 working days, and if the service is rejected, the occupiers may approach the Joint Director of Factories.

In Karnataka, the permission and plan approval under the Karnataka Factories Rules will be valid for a lifetime. Whereas the factory license will be valid for one year each calendar year.

After expiration of the license, applicants can apply for renewal through the Chief Inspector of Factories, 1948. The application should be submitted in Form 2 (in triplicate) or through the online FBIS portal.

Make sure to submit a renewal form two months before the date on which the licence expires. As per sub rule (2), if the application is not received within the prescribed time, then the license shall be renewed only upon receiving a payment of 25% additional to the ordinary fee payable for the license per year.

Operating a factory without a valid license can result in a breach of the Factories Act of 1948. This can result in severe legal challenges for employers and managers. Under Section 92, the closure of a manufacturing unit and prosecution of the occupiers can create challenges for a business.

• Initial monetary fines up to 2 lakhs and imprisonment, which may extend up to 2 years.
• An additional fee of ₹1000 a day if the contravention continues.
• Risk of mandatory physical closure of premises and discontinuation of electricity and water supply.