Starting a New Company: Do We Need to Register for EPF and ESI Without Employees?

Query Regarding Company Formation

I have a query regarding the formation of a new company. If the company does not fall under the applicability of ESI and EPF, is it mandatory to register for these schemes? We have recently received a notice to file returns for the same. What should be our course of action?

Dear Colleague,

Kindly have a glance:

Applicability of PF:

The EPF Act is applicable to every establishment which employs 20 (twenty) or more persons, and every such employer shall be required to be registered under the EPF on the government website 'Employee Provident Fund Organisation (EPFO)'.

Applicability of ESI:

The Employees' State Insurance Act, 1948 ['ESI Act'] is applicable to non-seasonal power-using factories employing 10 or more persons and non-power using factories and establishments employing 20 or more persons. All employees who earn less than ₹21,000/month are covered.

Hence, kindly check the number of employees in your establishment as per the above thresholds. You had mentioned that there are no employees; hence, double-check. If there are none or if they do not meet the required number of employees, then the Act is not applicable. You may send a suitable reply and get it prepared by a Labour Law Practitioner and file the reply to the authority referring to the details of the notice you had received.

Automatic Registration of PAN, TAN, PF, and ESIC

When a new company or LLP is formed, the MCA automatically grants PAN, TAN, PF, and ESIC registration to it. You should have received these details along with the registration of the company.

Steps to Take if Not Liable

You should have immediately had the registration cancelled if you were not liable. Now that you haven't, I suggest you file NIL returns and thereafter, cancel your registration.

You will need to pay a minimum, nominal fee, and penalty for late filing.