Navigating ESIC Coverage: What Happens When Your Company is Sold?

Dear Sirs, Please guide me on what to do with the ESIC coverage (ESIC code no) in the event of the sale of the company. While a few of the employees will be joining the new company, which already has a separate ESIC code. If we have to apply for the cancellation of the code, then what is the procedure?

Regards,
Satya
[Phone Number Removed For Privacy Reasons]

As per the provisions contained in Section 93A of the ESI Act, 1948, the person to whom the unit is transferred by sale, etc., is also liable for payment of contributions due under the said Act up to the date of such transfer.

Although you could have continued with the old Code Number, since you have obtained a new code number for the sold unit, it would be appropriate to inform the ESIC Regional Office and the Inspection Office about the sale of the unit. This will prevent any assessment of contributions for future periods under the said Act.

If requested by the appropriate office of ESIC, the verification of records of the sold unit can also be conducted up to the date of sale.

Regards,
Harsh Kumar Mehta