Merging Multiple Factory Units into One: How Do We Navigate the Licensing Process?

Hi Everyone,

We have three manufacturing units of our company in Haryana - unit-1, unit-2, and unit-3. Employees are working in all units, and currently, we have three separate factory licenses. However, we have merged the electricity connections of the three units into one. Our management has now decided to merge all units into one so that we can obtain a single factory license in the future.

Please advise on the procedure for merging the units.

If the manufacturing activities are the same, and there is no boundary separating one factory from the other, the question of separate licenses would not have arisen. Check whether you have shown boundaries to separate each unit in the diagram submitted to the Impetrate. If there are boundaries, remove them and send a proposal for a merger.

You need to make a fresh application with details of three units and a factory layout drawing. Since all the details are with the Factory Inspector, they will inspect the factory premises before issuing the factory license.

At present, you are manufacturing three different products. However, upon unification, the factory will be known by the final product of the factory. To get complete information, please contact the Factory Inspector.

Before going into the details, you have to be clear whether the manufacturing activity is the same or not. If it is not the same, merging will not happen.

As per my knowledge, first, you should get an amalgamation order from the National Company Law Tribunal under Section 232 (Merger and Amalgamation) of The Companies Act, 2013.

That is true, but that is required only when two entities merge and not for two or three units with different factory licenses of the same management having a single balance sheet, etc., merge so that all have one factory license.