Closing ESI Account for a Shutting Down Unit: What Steps Should We Follow?

Procedure for Closing ESI Account

Our organization has one unit in Chennai and two in Bangalore. Currently, the production at the Chennai unit is almost closed, with only 9 employees working. We now need to close the ESI account of the Chennai unit. Could anyone please provide me with the procedure for closing the account?

Regards,
Gowri Sankar

As per the ESI Act, when the act becomes applicable, its applicability continues even if the employee strength is less than the applicable threshold.

Ramesh's reply is correct. ESIC and PF, once applicable, cannot be stopped even if manpower decreases from the desired levels for compliance with acts.

ESI can be closed only upon the closure of the establishment and not before that once applicable. Now, in your case, please specify whether the 9 employees who are working are from the Bangalore unit or the Chennai unit. If you are closing the Chennai unit, which means that no employees will be working in the Chennai unit, you can close the ESI account of the Chennai unit as an establishment closure.

Regards,
Saji