Industrial Relations And Labour Laws
Korgaonkar K A
Consultant & G.m.
+5 Others

A manufacturing unit employs less than 10 workers & uses approx 80 HP of power.
Is it mandatory for them to apply for factories registration & license.
What will happen when they cross 10 employees
Thanks in advance for your response.
Factory licence is mandatory but the licensing authority only changes. If you take the licence with less than 10 employees, it will be possible to take it from the district officer whereas when you apply for registration with more than 10 employees, you will have to get it from the state head quarters.
At present you are not governed by FA Act.but once you have 10 workers an start production you have take license under the Act. varghese mathew 9961266966
The State Government can extend by notification the application of the Factories Act to any manufacturing unit irrespective of the fact that they employ les than ten workers. So verify whethr any such notification is in force in your Sttae. In that event, you need to obtain a license and registration under the Act.
HR & labour law Advisor
@ Dear Madhu ji,
I think you are confused with Factory Licence and Factory Permit.
The Factory Licence is under the FA 1948. It is applicable in case you engage 10/20 and more workers in manufacturing process as defined.
The Factory Permit is a permission from a local authority such as Municipal Officer or District Officer to run any work shop or factory irrespective of employees.
@ Saikumar ji,
According to my knowledge, there is no provision in FA which says the State Government can extend by notification the application of the Factories Act to any manufacturing unit irrespective of the fact that they employ less than ten workers. Please correct if I am wrong.
You can always contact the SSI or MSSI (micro small scale industries) Office and enquire about the registration and legal formalities, Many exemptions are provided to Small Scale Industries and Micro Small Scale Industries.
Since yours is a very small manufacturing unit, i feel you will come under SSI or MSSI, please consult any expert in your city for more clarifications.
Dear keshav Ji

Sec.85 of the Factories Act grants the power to the State Government to extend the application of the fcatories Act to certain premises where in the manufacturing process is carried on.It redas as under;

1) The State Government may, by notification in Official Gazette, declare that all or any of the provisionsof this Actshall apply to any place where in a manufacturing process is carried on with or without the aid of power or is so ordinarily carried on, not withstanding that --

i) the number of persons employed there in is less than ten, if workingwith the aid of ower and less than twenty if working without the aid of power, or

ii)............................................... ...........................

To give an example,thus, in exercise of the powers conferred by the above Section,the Government of Maharastra extended the Factories to premises where in the handling and processing of hazardous chemicals are carried on irrespective of the nimber od persons employed in such manufacturing process( Notification No. FAC?1085/(9782)Lab-4 dated 9th July 1985.

Thanks for clarifying the distinction between a factory license and factory permit.


Dear Saikumar ji, Thank you very much for your quick response and correcting me on fact of law. This is to way we all learn by actively participating in this forum. I admire you.
Dear Friend,
Under the Factories Act 1948, a Factory has been defined as precincts :
"Whereon ten or more workers are working, or were working on any day of the preceding twelve months......." Clause "m" of Section 2.
If you anticipate an increase in your workforce to 10 or more workers within the meaning of the above definition, then you might as well complete all the related formalities and apply for a Factory Licence under the Factories Act.
Best Wishes,
Vasant Nair
Dear friend,
I am not sure what exactly "the manufacturing process" taking place in your estt. You may approach the Director at the District Industry Centre at Aurangabad and get yourself regd. under SSI/MSME Act irrespective of your strength. This will help you to gain some incentives and concessions, quick realisation of your bills on preference, loan facilities etc. Even if you don't want to classify yourself as an "Industry/Factory" atleast register under "The Bombay Shops & Estt. Act" that should be sufficient alongwith the SSI regn.for the present. There are so many consultants to help you, use such links for help.
pune « SSI Registration

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Dear ,
I appreciate your participation.
Factory Licence and Factory permit are statutory obligations.
Whreas registration under SSI or MSSI are, according to me not statutory one. The main purpose of Registration under SSI or MSSI is to maintain statistics and maintain a roll of such units for the purposes of providing incentives and support services.
There is another eactment called- The Micro, Small and Medium Enterprises Development Act, 2006. The object of this enactment is to facilitate the promotion and development and enhancing the competitiveness of micro, small and medium enterprises and for matters connected therewith or incidental. Under this Act, a micro or small enterprise or a medium enterprise engaged in providing or rendering of services may file the memorandum to the authority at discretion.
I am not expert in this area but I tried to share the knowledge with I have.
You are welcome. keshav ji.Learning is a continuous process. B.Saikumar HR &Labour Law advisor Mumbai
If it is clear that you employ in a day ( 24 hours) 10 or more workers and use power for any manufacturing activity you need to register under Factories Act. There are certain judgments from High Court and Supreme court. If needed I can share them it with you.
Dear Sir, In our company above 10 workers bellow 20 workers as worked and we have Registered in SSI,Can we should be registration in factory act ? Kindly suggested. Warm Regard Pappu Sharma
For registration under the Factories Act, it is immaterial whether it is an SSI unit or not. The latter depends on investment whereas the former depends on the number of employees employed. Therefore, you should get Factory Registration.
In some industries, like chemical, paints etc the number of employees to make it obligatory to get Factory licence is even less than 10.
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