Factory License Registration and Renewal under the Factories Act 1948 for all manufacturing units.
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A Factory Licence is a mandatory registration issued by the state Chief Inspector of Factories (or the Inspector of Factories) under the Factories Act, 1948. It is required before any manufacturing or processing activity commences on a premises. The Act defines a "factory" as any premises where 10 or more workers are employed with the aid of power, or 20 or more workers are employed without the aid of power, and where a manufacturing process is carried on.
The licence ensures that the factory meets prescribed standards for worker health, safety, and welfare — including provisions for ventilation, lighting, sanitation, fire escapes, and safety of machinery. Each state administers its own factory registration process through the state Labour Department, though the overarching law (the Factories Act) is a central legislation. Factory licences are typically renewed annually, and the annual renewal fee is calculated based on the number of workers and installed power (in Kilo Watts).
Non-compliance with the Factories Act — including operating without a valid licence — can result in prosecution under Section 92 of the Act, with penalties including fines of up to ₹2,00,000 and imprisonment. Any accident resulting from the failure to comply can attract enhanced penalties.
Any premises that meets the definition of a "factory" under the Factories Act, 1948 must obtain a licence before beginning production.
Any unit engaged in the manufacture, assembly, or processing of goods — from FMCG to auto components — that employs the prescribed number of workers must register under the Factories Act.
Central kitchens, food packaging plants, and large-scale food manufacturing facilities require a Factory Licence alongside their FSSAI Central or State licence.
Drug and pharmaceutical manufacturing units must hold both a Drug Manufacturing Licence from CDSCO/State FDA and a Factory Licence from the state Labour Department.
Spinning mills, weaving units, garment factories, and dyeing plants are among the largest categories of factories registered under the Act across Maharashtra, Tamil Nadu, and Gujarat.
Metal fabrication, machining, auto ancillary, and precision engineering facilities that employ power-operated machinery require a Factory Licence before commencing operations.
Chemical, plastics, rubber, and paint manufacturing facilities — typically classified as hazardous — require a Factory Licence and additional safety compliances under the Act.
Expert-assisted. All states covered. Inspection support included.
State-specific forms and requirements may vary slightly. The following list covers documents required across most Indian states.
Layout plan of the factory premises showing the location of machinery, entry/exit points, washrooms, and emergency exits. The building plan must be approved by the local authority.
Registered sale deed or lease agreement for the factory premises, along with the property tax receipt confirming the address.
Detailed inventory of all machinery installed in the factory — make, model, power (HP/KW), and purpose — as this determines the licence fee and hazard category.
Letter from the state electricity board or DISCOM confirming the sanctioned load and connection to the factory premises.
PAN and Aadhaar of the factory owner, managing director, or occupier, along with a passport-size photograph.
Certificate from a licensed structural engineer confirming the stability of the building where the factory is situated — mandatory in most states for new registrations.
The prescribed Form 2 (or state-equivalent) is submitted to the office of the Chief Inspector of Factories in the relevant state, along with all supporting documents and the prescribed application fee.
The Inspector of Factories reviews the application for completeness. Any deficiencies in the site plan, machinery list, or stability certificate trigger a notice requiring corrections before the inspection is scheduled.
An Inspector of Factories visits the premises to verify the layout, machinery, welfare facilities (canteen, first aid, washrooms), and safety equipment against the submitted plans. This inspection is typically conducted within 15–30 working days.
Following a satisfactory inspection, the Inspector recommends the issuance of the licence to the Chief Inspector. Any non-compliances flagged during inspection must be rectified and a compliance report submitted before approval.
The Factory Licence (Form 4 or state equivalent) is issued and must be displayed in a conspicuous place within the factory. It must be renewed annually before 31 December of the preceding year to avoid late fees and penalties.
Government fees are calculated based on worker count and installed power and vary by state. The fees below are ClearlyComply's professional service charges.
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Factory licence rules differ across Maharashtra, Karnataka, Tamil Nadu, Gujarat, and other states. Our team knows the specific forms, fees, and inspector workflows for each state.
We conduct a pre-inspection walkthrough to identify gaps in welfare facilities, safety equipment, and documentation before the official inspector visits — reducing rejection risk.
We track your licence expiry and remind you well before the December deadline to avoid late fees (which can be 3–5 times the annual licence fee in some states).
We prepare site plans, machinery lists, stability certificates, and all statutory forms — you simply review and sign. No running around for paperwork.
Our professional fee is fixed upfront. Government fees are communicated separately — no hidden charges or surprise invoices after the process begins.
You get a named expert who handles your case end-to-end and is available for queries at any stage of the process.
Under the Factories Act, 1948, a factory licence is required if 10 or more workers are employed on any day of the preceding 12 months and a manufacturing process is carried on with the aid of power, or if 20 or more workers are employed without the use of power. Some state amendments have lowered this threshold, so check with a state-specific expert.
Factory licences are renewed annually. The renewal application (along with the prescribed fee based on worker count and installed power) must be submitted before 31 December of the year for which renewal is sought. Late renewal attracts a penalty surcharge — typically 25–100% of the annual fee depending on the state.
Section 92 of the Factories Act prescribes a fine of up to ₹2,00,000 and/or imprisonment of up to 2 years for contravention of any provision of the Act — including operating without a licence. In case of a fatal accident in an unlicensed factory, enhanced penalties apply and the occupier faces personal criminal liability.
Yes. The Factories Act applies to all premises meeting the definition of a factory, regardless of whether they are located in an SEZ, MIDC, GIDC, or other industrial development area. The SEZ development commissioner may process certain formalities, but the Factory Licence is still issued by the state Labour Department.
The Factories Act mandates specific welfare provisions based on worker count: washing facilities (Chapter IV), first aid boxes with trained personnel (Section 45), canteen (if 250+ workers) (Section 46), rest rooms (if 150+ workers) (Section 47), and crèches (if 30+ female workers) (Section 48). Non-compliance attracts penalties even after the licence is issued.
A factory licence is not transferable as such, but when ownership changes, the new occupier must apply for an amendment to the licence (or a fresh licence in some states) within 15 days of taking over the factory. The original licence continues during the processing period provided the application is filed in time.
Tell us about your manufacturing unit and we will guide you through the state-specific process — at no charge.
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