Dear Professional,
I want to know if the provisions of EPF are applicable to me under the following circumstances:
- I am the sole proprietor of 3 concerns.
- The businesses under these concerns are of the same nature.
- Separately, there are fewer than 20 employees in each concern, but if consolidated, the number of employees increases above 20.
Thanks,
Sumit Chawla
From India, Kolkata
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I want to know if the provisions of EPF are applicable to me under the following circumstances:
- I am the sole proprietor of 3 concerns.
- The businesses under these concerns are of the same nature.
- Separately, there are fewer than 20 employees in each concern, but if consolidated, the number of employees increases above 20.
Thanks,
Sumit Chawla
From India, Kolkata
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If you have registered as three different legal entities, then PF will not be applicable. If you are operating under one legal entity and have done the split for your internal management, then PF will be applicable.
From India, Bangalore
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6From India, Bangalore
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My queries related to your post. Is there an interconnection between these three units, and is there common supervisory, financial, or managerial control over the three firms? If this matter gets agitated in a court of law, these kinds of questions are likely to arise.
From India, Pune
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From India, Pune
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Understanding the Sole Proprietor System
The problem with the sole proprietor system is that there is no distinction between the proprietor and the business. Therefore, in the given circumstances, all three businesses will be counted as the same, and you will be liable for PF along with a penalty.
Considering Business Structure Changes
It would be a good idea to convert each of these three into separate LLPs, partnerships, or private limited companies. However, you need to verify the cost-benefit analysis of maintaining three separate organizations: they all have audit and compliance requirements, as opposed to the savings on PF.
From India, Mumbai
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The problem with the sole proprietor system is that there is no distinction between the proprietor and the business. Therefore, in the given circumstances, all three businesses will be counted as the same, and you will be liable for PF along with a penalty.
Considering Business Structure Changes
It would be a good idea to convert each of these three into separate LLPs, partnerships, or private limited companies. However, you need to verify the cost-benefit analysis of maintaining three separate organizations: they all have audit and compliance requirements, as opposed to the savings on PF.
From India, Mumbai
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Dear NATHRAO Sir,
In terms of financial, managerial, and supervisory control, all three concerns are under the same person. Additionally, I would like to bring the following information to your attention:
- The business is operated from the same premises.
- The nature of business being conducted is the same.
- Since all three concerns are proprietorship concerns, the PAN involved in all three cases is the same.
Regards,
Sumit Chawla
From India, Kolkata
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In terms of financial, managerial, and supervisory control, all three concerns are under the same person. Additionally, I would like to bring the following information to your attention:
- The business is operated from the same premises.
- The nature of business being conducted is the same.
- Since all three concerns are proprietorship concerns, the PAN involved in all three cases is the same.
Regards,
Sumit Chawla
From India, Kolkata
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In my opinion you will have to pay PF to your employees. Kindly take appropriate legal opinion on the subject at the earliest.
From India, Pune
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From India, Pune
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Dear Nathrao Sir,
When it comes to financial, managerial, and supervisory control, it is all under a single person for all three areas. Additional information that I would like to bring to your attention is as follows:
- The business for all three concerns is managed from the same premises.
- Since all three are proprietary concerns, the PAN involved in all three cases is the same.
Regards,
Sumit
From India, Kolkata
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When it comes to financial, managerial, and supervisory control, it is all under a single person for all three areas. Additional information that I would like to bring to your attention is as follows:
- The business for all three concerns is managed from the same premises.
- Since all three are proprietary concerns, the PAN involved in all three cases is the same.
Regards,
Sumit
From India, Kolkata
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Dear Mr. Sumit Chawla, Please reply to my queries before I post my advice on your post:
1. Are you drawing a salary, or is your remuneration or profit-sharing structured differently and approved through a Board resolution, if the amount is less than Rs. 15,000 per month?
2. All three are operating with individual factory licenses and should be treated as separate units.
3. Have you ever been covered under the EPF benefits?
Regards, RDS Yadav Management Adviser and Trainer Director, Future Institute of Engineering and Technology
From India, Delhi
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1. Are you drawing a salary, or is your remuneration or profit-sharing structured differently and approved through a Board resolution, if the amount is less than Rs. 15,000 per month?
2. All three are operating with individual factory licenses and should be treated as separate units.
3. Have you ever been covered under the EPF benefits?
Regards, RDS Yadav Management Adviser and Trainer Director, Future Institute of Engineering and Technology
From India, Delhi
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I don't think you really searched.
A simple question put in the search button on the citehr website gave me 125 posts on this matter: [Employers contribution PF deducted from salary](https://www.citehr.com/results.php?q=Employers+contribution+PF+deducted+f rom+salary&submit.x=0&submit.y=0).
From India, Mumbai
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A simple question put in the search button on the citehr website gave me 125 posts on this matter: [Employers contribution PF deducted from salary](https://www.citehr.com/results.php?q=Employers+contribution+PF+deducted+f rom+salary&submit.x=0&submit.y=0).
From India, Mumbai
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