Factory License

As per the Act, the below factories must obtain the factory license:

• When the factory has ten or more workers involved in manufacturing activity with the aid of power

• When the factory has 20 or more workers involved in manufacturing activity without the aid of power

The main purposes of a factory license are:

1.      Regulatory Compliance

Ensures that the factory follows all the laws and regulations related to industrial operations, labor, and safety.

2.      Safety and Health Standards

Protects workers by ensuring proper working conditions, including fire safety, ventilation, sanitation, and emergency preparedness.

3.      Environmental Protection

Helps monitor and control pollution, waste disposal, and other environmental impacts caused by industrial activity.

4.      Legal Recognition

Provides the factory with official recognition, making it easier to obtain other permissions, such as electricity, water, or tax registrations.

5.      Accountability

Makes the factory responsible for adhering to labor laws, safety rules, and other regulatory obligations.

•        Owner ID and address proof

•        Address proof of factory premises or location, such as rental agreement or electricity bill

•        Pollution department consent letter

•        NOC from the fire and water department

•        Business PAN card copy

•        Factory layout and building plan

•        List of directors

•        Board resolution or partnership deed

•        Particulars of equipment and raw materials

•        Particulars of hazardous and non-hazardous wastes

•        Tax receipt, if any

Step 1: Check Eligibility

·        Ensure your factory meets the definition of a factory under your local law (usually involving a certain number of workers or machines).

·        Make sure the land/building is zoned for industrial or manufacturing use.

Step 2: Prepare Required Documents

Typical documents include:

1.   Application Form (provided by the labor or factory department)

2.   Ownership Documents (proof of land/building ownership or lease)

3.   Factory Layout Plan showing:

o   Machinery placement

o   Workstations

o   Fire exits

o   Ventilation and safety measures

4.   List of Workers and their employment details

5.   Safety and Health Compliance Certificates, including:

o   Fire safety certificate

o   Pollution control clearance (if applicable)

6.   Electricity/Water Connection Approval

7.   Payment of Licensing Fees

Step 3: Submit the Application

1.       Submit the application online or offline to the Department of Factories and Boilers (or equivalent labor/industrial department).

2.       Attach all the required documents.

3.       Pay the application fee.

Step 4: Inspection

1.       The authorities may inspect the factory site to verify:

2.       Machinery setup

3.       Safety measures (fire extinguishers, emergency exits, ventilation)

4.       Worker facilities (toilets, drinking water, first aid)

5.       The inspection ensures the factory meets legal and safety standards.

Step 5: Approval & License Issuance

1.       After inspection, if all conditions are met, the department issues the Factory License.

2.       The license typically includes:

3.       Factory name and address

4.       Maximum number of workers allowed

5.       Validity period

6.       Any special conditions (like fire safety upgrades or environmental measures)

Step 6: Renewal

1.       Factory licenses usually expire annually or every 3 years.

2.       Apply for renewal before expiration by submitting updated documents and paying renewal fees.

A factory license is a municipal approval for the factory’s business. It will help to apply for and obtain other licenses. Factory owners must mandatorily obtain this license, or else they may have to shut down the factory. It also protects owners from penal provisions laid down under the Factories Act. It ensures owners adopt appropriate safety measures to promote their workers’ welfare and health. Factory owners can also get benefits provided by the government under different schemes when they obtain the factory license.

•        Factory licenses usually expire annually or every 3 years.

•        Apply for renewal before expiration by submitting updated documents and paying renewal fees.

•        Keep your license visible in the factory as it is often legally required.

•        Ensure safety measures are maintained at all times to avoid penalties.

•        Keep records of inspections, safety drills, and worker health checks.