Factory Licence Registration in Uttar Pradesh

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 Uttar Pradesh, any manufacturing unit with 10 or more workers using power or 20 or more without power, must register under the Factories Act, 1948, via the Labour Department, Government of Uttar Pradesh. The application process is facilitated through the Nivesh Mitra portal.

Documents Required in Uttar Pradesh

• Building Plan Approval
• Layout Plan as per Factories Act
• KYC Documents of Owners/Directors
• Business Registration documents of firm/company
• Structural Stability certificate from approved architect.
• Sale Deed/ Rent Agreement of premises.
• Manufacturing process flow chart
• CA certificate showing Capital investment.

Steps to Get a Factory Licence

1. Portal Access: Register on the Nivesh Mitra Portal (niveshmitra.up.nic.in).
2. Application Submission: Fill in the application form with factory details and upload necessary documents.
3. Form Submission: Fill out the application form and upload necessary documents.
4. Fee Payment: Pay the requisite fee online.
5. Inspection: The Labour Department will schedule an inspection of the factory premises.
6. Licence Issuance: After successful verification, the factory licence will be issued.

Timelines

The registration of a Factory Licence in the state of Uttar Pradesh typically takes 15 to 18 working days, depending on document verification and government approvals.

Penalties in Case of Non-Compliance

• Running a factory without registration is a punishable offense and can lead to penalties up to ₹1,00,000 or imprisonment up to 2 years or both.
  
• A penalty for delayed renewal of a factory licence is a late fee of 25% of the renewal fee for the calendar year. This penalty applies when the renewal application is submitted after the deadline, which is 30 days before the licence expiry date. The system automatically calculates the total fee, including the late fee, which needs to be paid online.