FACTORY ACT REGISTRATION

The Factories Act, 1948 is one of India’s most significant labor legislations, designed to safeguard the welfare, health, and safety of workers employed in factories across the country. Enacted by the Government of India, the Act aims to regulate working conditions and ensure that industrial establishments maintain proper standards of safety, hygiene, and humane working environments. It applies to all factories engaged in manufacturing processes where a specific number of workers are employed, as defined under the Act. The primary objective of the Factories Act is to ensure that employees work in conditions that do not endanger their physical or mental well-being. It mandates provisions related to cleanliness, ventilation, lighting, disposal of waste, drinking water, and adequate sanitation facilities. The Act also includes measures to prevent occupational diseases and accidents, requiring employers to install safety equipment and conduct regular health check-ups for workers exposed to hazardous processes. Additionally, the Act regulates working hours, rest intervals, weekly holidays, and overtime, ensuring that workers are not overworked and receive fair compensation for extra labor. It also lays down specific provisions for the employment of women and young persons, prohibiting child labor and limiting working hours for adolescents and female workers in hazardous conditions. Every factory must obtain a Factory License under the Factories Act, issued by the respective State Labour Department or Chief Inspector of Factories, to legally commence operations.

Description

Key provisions of the Factories Act, 1948 include: 

Licensing and Registration: The Act requires factories to obtain a license before commencement of operations. It also mandates the registration of factories employing a certain number of workers.

Working Hours: It regulates the working hours of adult workers and prescribes overtime rates for work beyond the normal hours.

Health and Safety: The Act mandates provisions for maintaining a safe working environment, including measures related to ventilation, temperature, cleanliness, and prevention of accidents. It also requires the provision of first aid facilities and precautions against hazardous processes.

Welfare Provisions: The Act includes provisions for welfare amenities such as canteens, restrooms, drinking water, and washing facilities for workers.

Employment of Young Persons: It regulates the employment of young persons and prohibits the employment of children below a certain age in factories.

Annual Leave with Wages: The Act mandates annual leave with wages for workers based on the number of days worked in a year.

Penalties: It specifies penalties for contravention of the provisions of the Act to ensure compliance.

The Factories Act, 1948 has been amended several times to keep up with changing industrial practices and to enhance the safety and welfare of workers. It is enforced by the respective State Governments in India, which appoint inspectors to ensure compliance with the provisions of the Act.


Frequently Asked Questions

Browse practical answers curated by our CA and CS desks for FACTORY ACT REGISTRATION.

Purpose & Applicability

A “factory” is any premises where a manufacturing process is carried on with the aid of power and 10 or more workers, or without the aid of power and 20 or more workers.

The occupier (owner/partner/director) of every “factory” as defined under the Act must apply for registration and a licence before commencing manufacturing activities.

Without registration/licence, the premises may be operating illegally, exposing the business to penalties, closure orders, and inability to enforce compliance.

When a manufacturing unit expands (increase in workers, change in machinery/power usage, or change in process), it must apply for registration or an amendment of licence.

Key Requirements & What To Include

Manufacturing with power and 10 or more workers, or without power and 20 or more workers, triggers the licence requirement.

Documents typically include approved building plans, occupancy certificate, details of machinery and processes, list of employees, safety measures, and premises in a legal-use zone.

The occupier is the proprietor, partner, director, or manager who is in charge of the factory; the application must be made by this occupier.

Yes — in many states, factories must be located in industrial zones and not in purely residential areas.

Procedure & Compliance

Submit an application in the prescribed form along with building plans, safety details, and necessary documents; the Chief Inspector or relevant authority grants the licence upon approval and payment of fees.

No — starting manufacturing before obtaining registration/licence is not legally permitted and may attract penalties or closure.

The factory must maintain worker records, ensure safety and health standards, comply with working hours and welfare rules, file periodic returns, and renew the licence as required.

Violations may lead to fines, imprisonment of responsible persons, suspension or cancellation of the licence, and even forced shutdown of the factory.

Benefits, Risks & Best Practices

Benefits include legal recognition, ability to access loans and contracts, operational credibility, and eligibility for government schemes.

Risks include penalties for non-compliance, inspection issues, safety violations, and limited access to official permissions or expansions.

Mistakes include starting operations without a licence, using unapproved premises, neglecting safety requirements, and missing renewal deadlines.

Plan your factory layout properly, maintain updated records, apply early for renewals, follow safety norms, train staff, and cooperate with inspections to ensure consistent compliance and improvement.

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