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Dear Sir, I run a small factory with less than 20 employees it is a partnership firm. I have some health issues and am not able to manage it. I am the managing partner and the other partners are not willing to run the factory, so I need to know the procedures to be followed for closing the factory permanently.

From India, Ahmedabad

Joshi Ji,

I work in IR (Industrial Relations) and hence I have done closures as a part of my job. This might vary state to state. First we need to give closure form to Factories and Boilers Department. Then we need to inform local corporation, municipal or panchayat authorities (Professional Tax). Then Department of Labor and Employment, Electricity Board, Water Authority, Telephones, Postal authorities, Local Police Station and other concerned Government departments. Eg.If specialized chemicals etc. are used. Hope this helps.

From India, Ernakulam

In addition to what has been stated by Deepak Vasudevan, I would like to share that since the factory has less than 50 employees, you need not take approval from the Labour department or even inform them of the closure. But you can close down the unit after paying retrenchment compensation payable. that includes payment of all pending salaries, leave encashment and payment of compensation to all employees who have worked at least for 240 days in last 12 months. The compensation is equal to 15 days salary for each year of service to each employee. Your intension to close down the unit shall be communicated to the workers one month before such closure. Otherwise, you will have to pay one month salary to each worker as notice pay. In addition to this, you have to pay gratuity to those who have worked at least for 5 years and the amount payable shall be equal to 15 days salary for each year of service.
From India, Kannur

Manufacturing unit without using power and having less than 20 people,is not a factory. But it will be an industry under ID Act. The nature of ownership ie proprietorship,partnership or a limited company,will not make any difference in the applicability of IDAct.
From India, Thiruvananthapuram
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