Navigating ESI Act: Is ESIC Payment Unavoidable for Proprietary Concerns?

Mandatory Registration Under the ESI Act

Earlier, there was a partnership firm of AB&C; then they transferred to Mr. D as a Proprietary Concern. This resulted in mandatory registration under the ESI Act. Being not eligible for ESIC, is it required to pay mandatory contributions after being registered under the said act? Is there any way out from it?

An ASAP reply would be appreciated.

Closure of ABC and Employee Resignation

If ABC has closed down their business, then they must have had all employees resign and informed the ESIC/EPFO about the incident. They must have submitted the dissolution deed of partnership to the concerned departments and helped their employees exit from the respective portal.

Mr. D's Relation to ABC

Now, Mr. D is not part of ABC, as he is a proprietary concern and has no relation to ABC or their employees. Hence, he is not eligible unless the manpower exceeds ten in the proprietary firm.

Acquisition of ABC's Assets and Liabilities

However, if Mr. D has acquired assets and liabilities of ABC along with their trade name, then they must consider the employees' back period liabilities and comply with all respective laws of ABC.