Saswatabanerjee
Partner - Risk Management
Rdsyadav
Educator, Management Consultant & Trainer
+4 Others

Dear Professional,
I want to know if the provisions of EPF is applicable on me under the following circumstances:
* I am sole proprietor of 3 concerns
* Business under these concerns are of same nature
* Separately there are less than 20 employees in each concern but if consolidated, no of employees increases above 20.
Thanks,
Sumit Chawla
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If you have registered as 3 different legal entities then PF will not be applicable. If you are operating under one legal entity and done the split for your internal management then PF will be applicable.
My queries related to your post
Is there interconnection between these three units and there is common supervisory, financial or managerial control over the three firms??
If this matter gets agitated in a court of law,these kind of questions are likely to arise.
The problem with sole proprietor system is that there is no difference between the proprietor and the business. Therefore in the given circumstances, all the three businesses will be counted as the same. And you will be liable for PF along with penalty.
It would actually be a good idea then for you to convert each of these three into separate LLP or partnership or private limited companies. However, again you need to verify the cost benefit analysis of maintaining three separate organisations, they're all dates and compliances as against the savings on PFHowever, again you need to verify the cost benefit analysis of maintaining three separate organisations, they're all audit and compliances as against the savings on p.m.
NATHRAO Sir,
As far as financial, managerial and supervisory control is concern, it is under same person for all the 3 concerns, further information which i would like to bring into your kind attention is as under:
* Business is being operated from same premises.
* Nature of business being conducted is same.
* Since all the 3 concerns are proprietorship concern the PAN involved in all the 3 cases are same.
Regards.
Sumit Chawla
In my opinion you will have to pay PF to your employees. Kindly take appropriate legal opinion on the subject at the earliest.
NATHRAO SIR,
AS FAR AS FINANCIAL, MANAGERIAL AND SUPERVISORY CONTROL IS CONCERNED, IT IS UNDER A SINGLE PERSON FOR ALL THE 3 CONCERNS. FURTHER INFORMATION WHICH I WOULD LIKE TO BRING INTO YOUR ATTENTION IS AS UNDER:
* BUSINESS FOR ALL THE 3 CONCERN IS MANAGED FROM SAME PREMISES.
* SINCE ALL THE 3 ARE PROP. CONCERN PAN INVOLVED IN ALL THE 3 CASES IS SAME.
REGARDS,
SUMIT
Dear Mr Sumit Chawla,
Pl. reply to my queries before I post my advise on your post (1) You are drawing salary or your remuneration or profit sharing is differently coming to you and same is through Board resolution and if amount is that less than Rs.15000 pm.(2) All three are operating with individual factory licenses, treated as separate units.(3) Have you ever been covered under the E PF benefits .
Regds,
RDS Yadav
Managemenbt Adviser and Trainer
Director, Future Institute of Engineering and Technolgy
I have one question. One of the new organization that I am planning to go, they said that they do not pay anything as PF. Employee and employer’s contribution both is deducted from the employees account. I was wondering if this true. Because what my understanding was employee pays 12% of his basic and the employer pays the same.
Please let me know. Urgent. Appreciate your help.
This has been repeatedly discussed on this forum. Have you at least checked the forum posts ?
I don't think you really searched
A simple question put in the search button on citehr website gave me 125 posts on this matter
Employers contribution PF deducted from salary

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