Hi, I am working under a Sole Proprietorship company with 25 employees. We are registered under EPF & ESI and are filing properly. Our company's proprietor has started a new separate establishment with a separate GST and the same PAN. Currently, 8 employees are working in this new establishment, and the nature of business is entirely different. However, EPF officials are considering this as a branch of the first company according to the MP ACT Section 2A, and they are directing us to cover the second company as well. Please guide us on the correct path.
From India, Tiruchi
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From India, Tiruchi
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Dear Colleague,
If you read Section 2A of the EPF Act 1952, it states that establishment includes all department and branches.
[2A. Establishment to include all departments and branches.—For the removal of doubts, it is
hereby declared that where an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment.]
Hence you need to provide all documents that the 2 businesses are different in nature and they have no connection between the business in terms of Management / Employer and Employee as well as day to day operations. You may represent to the Regional Provident Fund Commissioner with all documents and based on outcome of the discussion you may decide further.
If you consult any retired EO or Asst Commissioner of PF they will help you to over come or given more clarity on this subject matter.
From India, Chennai
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321If you read Section 2A of the EPF Act 1952, it states that establishment includes all department and branches.
[2A. Establishment to include all departments and branches.—For the removal of doubts, it is
hereby declared that where an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment.]
Hence you need to provide all documents that the 2 businesses are different in nature and they have no connection between the business in terms of Management / Employer and Employee as well as day to day operations. You may represent to the Regional Provident Fund Commissioner with all documents and based on outcome of the discussion you may decide further.
If you consult any retired EO or Asst Commissioner of PF they will help you to over come or given more clarity on this subject matter.
From India, Chennai
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There is some basic discrepancy in your post. A proprietorship organization is, by nature and law, the same as the proprietor himself. In view of that, even if your proprietor creates a new trade name, there is no legal distinction between them.
In view of that, how did he get a new (separate) PAN number and GST number? A proprietor cannot get 2 PAN numbers. So you need to check that first. Either he did it without disclosing his existing PAN no (a criminal offense under the money laundering act) or he did not link his PAN to his Aadhaar, which also will cause a problem.
If the person is the same (different PAN no notwithstanding), he is liable to be covered under PF as one entity and they will never accept that he has done it for genuine purposes. If, on the other hand, the actual constitution is different from what you think, you can use that to resolve the problem with the PF department.
In the meanwhile, it may make sense for your boss to convert his entities into separate LLPs which have different partners to prevent this problem.
From India, Mumbai
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In view of that, how did he get a new (separate) PAN number and GST number? A proprietor cannot get 2 PAN numbers. So you need to check that first. Either he did it without disclosing his existing PAN no (a criminal offense under the money laundering act) or he did not link his PAN to his Aadhaar, which also will cause a problem.
If the person is the same (different PAN no notwithstanding), he is liable to be covered under PF as one entity and they will never accept that he has done it for genuine purposes. If, on the other hand, the actual constitution is different from what you think, you can use that to resolve the problem with the PF department.
In the meanwhile, it may make sense for your boss to convert his entities into separate LLPs which have different partners to prevent this problem.
From India, Mumbai
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