Navigating Statutory Compliance for Company Relocation: What Steps Should I Take?

Request for Guidance on Statutory Compliance During Company Relocation

Our company plans to shift from one industrial area to another within the same district in three months. As an HR executive, management has asked me to ensure compliance with mandatory statutory requirements and formalities. I have a basic understanding of the necessary formalities, but I assume the practical scenario might differ. Here are the key areas I'm considering:

- Updating the factory license
- Updating company records with EPFO
- ESIC compliance
- Updating records in the labor contractor's license
- Notifying the local corporation or taluka panchayat for Professional Tax

I request your guidance with a detailed checklist or procedure for these tasks. Thanks in advance!

Sincere regards,
Harshavardhan

Dear Harsh,

Yes, you have to obtain a fresh factory license and surrender the existing one. You are required to get the map approval as well. Additionally, you need to complete contractor registration and obtain a license for the new address. If the new address is in the same area as the regional ESIC office, your ESI number will remain the same, and you will need to inform them accordingly. Don't forget to give intimation to EPFO as well.

Thank you.

Steps for Business Shifting Compliance

As suggested by Mr. Malik, please take further actions regarding your business relocation. Since your organization is a factory governed by factory rules, first get your new location approved by the local Taluka and the administrative body of the industrial area. Confirm your plant layout and building plan with the Office of the Directorate of the Factory, along with obtaining an NOC from the local Fire Department and the Factory Inspector.

After the physical verification of the plant and management policy for the on-site emergency plan, a fresh factory license may be issued since, as you mentioned, you are closing the business at the old site.

Once all the above formalities are completed, you can proceed to update the address for ESI and PF registration.

Thanks

I've just attached the relevant provisions of the Gujarat Factories Rules below, which are self-explanatory. Please go through these rules. For any further details, you may contact the area Inspector and follow his guidance.

Rule 113. Information Regarding Closure of Factories

(1) The occupier and the manager shall be jointly or severally responsible for sending information in duplicate to the Inspector of any intended closure of the factory or any shift, section, or department thereof, immediately after it is decided to do so, and before the closure takes place, stating:
(a) the date of intended closure;
(b) the reasons for closure;
(c) the number of workers on the muster-roll of the factory on the day the information is sent;
(d) the number of workers likely to be affected by the closure; and
(e) the probable period of closure.

Rule 3. Approval of Plans (for the factory to be occupied afresh)

(1) An application for obtaining previous permission for the site on which the factory is to be situated and for the construction or extension of a factory shall be made to the Chief Inspector of Factories. The application for such permission shall be made in Form No. I, which shall be accompanied by the following documents:
(a) A flow chart of the manufacturing process supplemented by a brief description of the process in its various stages;
(b) Plans in duplicate drawn to scale showing—
(i) the site of the factory and immediate surroundings including adjacent buildings and other structures, roads, drains, etc.;
(ii) the plan elevation and necessary cross-sections of the various buildings, including all relevant details relating to natural lighting, ventilation, and means of escape in case of fire. The plans shall also clearly indicate the position of the plant and machinery, aisles, and passageways; and
(c) such other particulars as the Chief Inspector may require.

Rule 4. Application for Registration and Grant of License (for the factory to be occupied afresh)

(1) The occupier or manager of every factory to which the Act applies shall submit to the Chief Inspector an application in triplicate in Form No. 2 for the registration of the factory accompanied by an application in Form No. 3 for the grant of a license.
(2) Every application in Form No. 2 shall be accompanied by a treasury receipt, a crossed cheque, a crossed Indian Postal Order, or, as the case may be, an invoice for book adjustment, for payment of the fees for the purpose as specified in Schedule 3.

Regards,
K.A.Thariq Muhamed Salim
(Deputy Chief Inspector of Factories - retired, Chennai)