Factory Licence Under the Factories Act

When is a factory licence required?

• Premises where 10 or more workers work with the aid of power, or 20 or more without power, carrying on a manufacturing process.
• States may notify lower or different thresholds for particular categories.
• The licence is tied to the premises, the maximum number of workers and the installed horsepower.

Exceeding the licensed worker count or horsepower without amending the licence is itself a contravention.

Two stages: plan approval, then licence

1. 1Submit building plans and machinery layout for approval of the Chief Inspector of Factories.
2. 2Obtain written plan approval before construction or installation.
3. 3Apply for the factory licence with the approved plans and prescribed documents.
4. 4Pay the licence fee based on workers and horsepower.
5. 5Receive the licence and display it at the factory.
6. 6Renew before expiry and file the annual return.

Ongoing obligations

• Appoint an occupier and a manager and notify the authority.
• Maintain statutory registers — adult workers, leave with wages, overtime, accidents.
• Comply with health, safety and welfare provisions applicable to the factory.
• File the annual return and any half-yearly returns prescribed by state rules.

Frequently asked questions

What documents are required for a factory licence?

Approved building and machinery plans, list of directors or partners, proof of premises, details of workers and horsepower, occupier and manager details, and the fee challan — plus any state-specific attachments.

Is plan approval needed before the licence?

Yes. Approval of the building and machinery plans by the Chief Inspector of Factories precedes the licence application.

Sources & references

• India Code — Central Acts
• Directorate General Factory Advice Service & Labour Institutes