Can Two Companies Share Office Space? Understanding Labor Law Compliance and Layout Needs

Dear All,

Seeking clarity on the following - while designing the office layout, is it required to keep the two offices (Separate S&E RC, 100% Subsidiary company) separate by having a partition wall and separate amenities like a canteen, restrooms, entrance, etc.? Can two offices operate from the same premise without any partition, and can employees sit together and use common amenities like the canteen, restrooms, and even the same entrance door? Please suggest the labor law-related compliance required in case of the use of common office space.

I trust, at least you maintain separate name boards, registration, payroll, statutory documents, accounts, etc. Why can't you bifurcate offices by putting up partitions/cubicles to give an appearance that there exist two offices? I don't find a reason why not to share common canteens, restrooms, entrance, etc.

Thank you, Mr. Kumar. All the records are maintained separately for both companies.

I would like to understand if there is any legal guidance or logic to bifurcate the office. Can people sit together as they would in a co-working space? The reason for considering this is to optimize space utilization.

Dear Akashshukla2000,

According to me, there won't be any issue if the employees of both companies sit together in one office. The key is to maintain separate registers, including muster rolls for each company. Additionally, separate name boards outside the main entrance and distinct S&E registrations should be maintained.

In both of your companies, there are already common factors that I have noticed. It is unnecessary to have separate demarcations or amenities as it would only increase costs needlessly.

Whether there is a clear separation between the companies or not, both will be considered together for the applicability of Social Security Acts.

Thank you.

I don't see any legal hurdles provided if you comply with provisions of the GST/PT/Labour laws. Staff sitting together and sharing common facilities will have no problems. In fact, many of the modern business hubs/IT Corridors, complexes function like this only. However, you have not mentioned in which state your units are functioning. Better take of the stipulations provided in the Shops & Commercial Estts Act of your state and take appropriate action. No worry.

Maharashtra Shops and Establishments Act Compliance

For example, if you are covered under the Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017, an establishment license is not required for fewer than 10 employees. It's defined that:

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(21) "shop" means any premises where goods are sold, either by retail or wholesale, or where services are rendered to customers. It includes an office, a storeroom, godown, warehouse, or workplace, whether in the same premises or otherwise, mainly used in connection with such trade or business, but does not include a factory.

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You didn't mention in which state your operations are being conducted. I think you should go through and comply with the stipulations in the respective state act/rules applicable. However, I don't see any legal hurdles if facilities are shared and/or staff are sitting together, as you described. In fact, many commercial complexes, IT parks, and malls function in this fashion. What matters is when the size of the manpower is high and more female staff who have to attend to infants are involved, where measures like maintaining a creche, fire safety measures, etc., have to be complied with. Otherwise, no worry.