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tejas-jhawar
The proprietor already has a PF registration for a manpower supplies firm, Say "A," as the number of employees was more than 20. The proprietor now wants to start a paper trading business in firm, Say "B," and the number of employees shall be less than 20.

The question is - Can the proprietor avoid PF compliance for firm B, saying it's not applicable as it's a separate firm/business and the number of employees is less than 20?

From India, Pune
vmlakshminarayanan
919

Hi, If Firm B is going to be separate entity and if the employee count is less than 20 then registration under PF is not mandatory.

However if Firm B is going to be the branch office of Firm A in the same location then same PF Establishment code can be used. In case If the Branch B is opened in other State and PF sub code can be applied.

From India, Madras
Madhu.T.K
4193

Whatever be the nature of business, being a proprietary establishment, there will be financial interdependence between these two companies. Even if you have separate RCs, which is a requirement of law if you run businesses in separate buildings with separate building number, the labour enforcement authorities would clubb them for coverage with retrospective date. Therefore, the employees in the business B should be given coverage right from the beginning.
From India, Kannur
tejas-jhawar
Thanks for the reply @ Madhu T K
As you mentioned it being a proprietary establishment, there will be financial interdependence between these two firms and hence no separate PF number shall be required.

Can you please corroborate the above with any specific section in the Act or any other legal reference

From India, Pune
Madhu.T.K
4193

I meant to say that because of financial interdependence, the employees of the new company, ie, B, will also be covered by EPF even if the number of employees in that company (B) is less than 20. Therefore, you have to deduct and contribute PF in respect of employees of B company right when each of them will join. Since there is a separate name for the establishment, you can take subcode for that establishment.
From India, Kannur
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