Acquired a New Factory Next Door: Should We Register It Separately Under Labor Laws?

Recently, our company has acquired another factory that is adjacent to our existing facility. My query pertains to whether we should continue operating this new factory under the name of our current one or if we need to secure separate registration under the various labor laws.

Thank you.

Either way, you can do this. It is the corporate decision. Companies Act registration/Factories License to be amended accordingly. This can be the extension of an existing factory or remain as a group concern with separate license and registration. All this is based on your board resolution.

It depends on the Business Transfer Agreement (BTA) entered into between your company and the seller factory. Some companies keep the legal identity separate even after the purchase, in which case, you have to continue to comply with the applicable labor laws of the seller factory. If it is an amalgamation or merger, then you have to get your existing factory's other licenses changed and surrender the licenses of the seller factory.

Regards,
P.S. Lakshmanan
S.G. Management Services
(PAN INDIA Labor Law compliance specialist, P.F., ESI, P Tax, Benefit Management & POSH COMPLIANCE)
Kolkata

Operating a Newly Acquired Factory

Your company bought a factory adjacent to our existing one, and you want to do business under the name of your old company. You cannot continue the new factory under the name of your existing factory. Other than the ownership change, nothing has happened, and the new factory purchased exists with its legal identity "X" as it was existing earlier:

1. Factory License
2. Bank
3. Registration obtained from various statutory departments (Labour Department, EPF, ESI, Central Excise, ROC, and many others).

You can do business with the product in the name of your old unit by stock transfer until a complete change occurs. It is better to consult a consultant who is looking after company affairs.