New Business Dilemma: Should We Register Under the Shops & Establishment Act or the Factories Act?

We are a newly started company, offering Robot Service, Repair, Overhauling, and Maintenance work to other companies, like Hyundai. The company setup is functioning within a rental warehouse covering 600 sq. ft. Major equipment includes a Small Crane (1 ton), Compressor, DG, and other tools for repairs. Under which act should I register - the Tamil Nadu Shops & Establishment Act or the Factories Act? Please assist me.

Repairing, overhauling, and maintenance work in your area is an engineering job in my opinion.

Definition of a Factory under the Factories Act

As per the Factories Act, a "factory" is defined in Section 2(m) of the Act. It means any premises, including the precincts thereof:

- Where ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on; or
- Where twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on.

An important necessity for any premises to be regarded as a 'factory' is that a "manufacturing process" should be conducted within the premises.

Definition of Manufacturing Process

According to Section 2(k), "manufacturing process" is defined as a process for:

(i) Making, altering, repairing, oiling, washing, cleaning, ornamenting, finishing, packing, breaking up, or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery, or disposal.

You need to obtain a license under the Factories Act for the described work if the number of workmen is above ten.

In this matter, Mr. Babu Alexander has explained the Factories Act quite well for better understanding. I hope the above information clarifies any doubts you may have on the matter.