Factory Licence Registration in Delhi

What is a Factory Licence?

A Factory Licence is a mandatory legal obligation under the Factories Act, 1948, required for those premises which carry out manufacturing processes employing 10 or more workers with the aid of power or employing 20 or more workers without power. This licence ensures that the factory has complied with the required safety, health and welfare standards for the workers.

Why is it needed?

• As operating a factory without one is a punishable offense under the Factories Act, 1948, therefore, obtaining a Factory Licence is essential for fulfilling legal compliance. Those factories which are found running without a valid licence can face considerable penalties, imposing heavy fines and in some cases even imprisonment. This makes the licence a crucial requirement for anyone planning to set up or operate a manufacturing plant in India.
• Beyond the legal requirements, a factory licence also ensures that the facility meets appropriate safety standards, which are very crucial for safeguarding the health and well-being of employees. It also validates the operational authenticity of the business, making easy to secure other necessary approvals, licences and participate in government tenders. To put it simply, the factory licence not only keeps the business on the right side of the law but also builds legitimacy and ensure the trust with stakeholders.

Benefits of Obtaining a Factory Licence

• Legal Recognition: It provides a legal status to the manufacturing unit, ensuring smooth business operations.
• Enhanced Credibility: It builds trust among clients, suppliers and stakeholders by demonstrating timely compliance with statutory requirements.
• Access to Government Schemes: It provides the eligibility for various government incentives and schemes aimed at promoting industrial growth.
• Employee Welfare: It ensures that implementation of health, safety and welfare measures for the employees, ultimately leading to increased efficiency and productivity.
• Avoidance of Penalties: It safeguards from falling into any kind of legal actions, fines and potential shutdowns due to non-compliance.

Eligibility Criteria

In Delhi, any manufacturing unit employing 10 or more workers with power or 20 or more without power, must obtain a factory licence from the Labour Department, Government of NCT of Delhi. The unit must comply with the Delhi Factories Rules, 1950 and obtain necessary clearances from the Municipal Corporation of Delhi (MCD).

Documents Required in Delhi

• Building Plan Approval
• Layout Plan as per Factories Act
• KYC Documents of Owners/Directors
• Business Registration documents of firm/company
• Sale Deed/ Rent Agreement of premises.
• Sanctioned load from HVPNL / Latest Electricity Bill
• DPCC NOC
• Fire NOC (for premises above 250 sq metre)
• Property Tax Receipt

Steps to Get a Factory Licence

1. Document Preparation: Gather all the required documents as per the checklist.
2. Online Application: Visit the MCD Portal and navigate to the Trade & Factory Licences section.
3. Form Submission: Fill out the application form and upload necessary documents.
4. Fee Payment: Pay the prescribed licence fee online.
5. Inspection: Await inspection by the concerned authorities.
6. Licence Issuance: Upon successful verification, the factory licence will be issued.

Timelines

Typically, the registration of a Factory Licence may take around 15 to 18 working days, depending on document readiness, application filing and government processing time.

Penalties in Case of Non-Compliance

• Operating a factory without a valid licence can lead to penalties up to ₹1,00,000 or imprisonment up to 2 years or both.
  
• Delayed renewal attracts a late fee of 25% of the fee payable for a calendar year which is charged wherein the application for renewal has been submitted in office after expiry of the time limit; i.e., after 30 days before the due date of expiry of Licence. System will auto-calculate total fee including late fee which has to be deposited online.