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Factories Act 1948: Expert Guide to Registration & Licensing

Overview of the Factories Act 1948

The first Factory Act in India was passed in 1881. Keeping in mind the problems of the workers, this Act was made to improve their conditions and to solve their health related problems. When the British came to India, they established many factories but before that there was no law made in the interest of the workers so that they could know how many hours they would work, how much salary they would get, when they would be given leave, hence keeping all these problems in mind, work in the factory. The Indian Factory Act 1948 was passed to improve the conditions of the workers and to take care of them. It applies to every factory spread across India in which 20 or more workers are fully employed.

According to Indian Factory Act 1948 section (2M) 'Factory' means where 10 or more workers are working in any manufacturing process with the help of electricity and 20 or more workers are doing any work without the help of electricity.

The main objective of this rule was to improve the present conditions of workers to a large extent and to determine the guidelines to be followed by every factory built for their welfare. In fact, labor legislation is a part of social legislation. Workers are a special group of the society, hence the legislations made for the workers come in a separate category of social legislation. This law combines various preparatory acts and regulates various occupations, such as construction, production, and protection of workers' rights.

Objectives of Factories Act 1948

  • This rule makes provisions for improving the condition of women and workers, their salary, their annual leave etc. and improving all the problems.
  • Establishing standards for working conditions and preventing accidents and occupational hazards.
  • Their main objective is to regulate machinery and new equipment keeping in mind the safety of workers and their risks.
  • Its objective is to ensure the safety and welfare of workers in industrial establishments.
  • To ensure sanitary facilities in the factory premises, to check lighting and proper ventilation inside them.
  • To promote harmonious relations between employers and workers and prevent industrial disputes.

Overall, their objective is to work in the interest of the workers, take care of their health, leave, their facilities and maintain a favorable working environment in the factory.

Registration Process of Factories in India

It is mandatory for every factory built in India to follow the rules made under the Factory Act 1948. The first step to establish a factory in India is to register it. After registration he is given a factory license. The procedures followed for factory registration in India are as follows –

  • Applicants who want to register for a factory can apply by filling the form and submitting the mainly prescribed documents by visiting the office of the Director of Factories and Boilers in their state.
  • After your application, the concerned officers check your required documents completely.
  • If all the documents are found correct during verification then it is processed for approval by the competent authority.
  • If any deficiency is found in the documents then the applicant is instructed to submit all the documents in the correct manner in due time.
  • Once the authorities receive the correct documents from the applicant and no issues are encountered during verification, the applicant is processed in the file to obtain approval from the competent authority.
  • After full approval is given, a registration certificate, a covering letter, a license duly signed by the competent authority is sent to the applicant by post.

Important Documents for Registration of Factories

  1. Joint application form for establishment of industries.
  1. It is also mandatory to have a complete construction report from the management as per the approved plan.
  1. Fees as per the structure notified from time to time Fees required in the form of treasury “challan” in the appropriate account.
  1. Under “Section 2N” of the Factory It is mandatory to have a resolution of the director partners nominating someone to act as occupier.
  1. Original copy of sustainability certificate issued by a recognized competent person.
  1. Safety and Health Policy for 2CBs and Factories where more than 50 employees are employed.


Some Strict Provisions of Factories Act 1948

  1. If you violate the provisions of the Act, you may have to face imprisonment of up to 2 years or a fine of up to ₹100,000.
  1. Violation of Chapter 4 relating to safety or dangerous operations may attract a fine of up to ₹25,000 in case of death and up to ₹5,000 in case of serious injury.
  1. If you make any false disclosure regarding the results of the analysis, you may face imprisonment of up to 6 months or a fine of up to ₹10,000.
  1. In case of violation of the provisions of “Section 41” also “41C” and “41H” by the occupier due to the mandatory nature of the information relating to the specific responsibilities of the occupier or the danger to the workers' right to work, you will be punished with imprisonment of up to seven years or up to two lakh rupees. You may also have to pay a fine if you violate 1If you continue for a year then you can get it done for up to 10 years.


Applicability of Factories Act 1948


  1. Here are some of the main points regarding the applicability of the Indian Factory Act, 1948.
  1. If electricity is used in any factory then Factory Act is applicable when 10 or more workers work there.
  1. If electricity is not being used in any factory then the Indian Factory Act 1948 is applicable when 20 or more workers work in that factory.
  1. Irrespective of the nature of the event, whether it is manufacturing, production, chemical processing, or any other industry, the Factory Act applies.
  1. It is mandatory to follow the rules for the safety of workers, their health and registration of factories.
  1. Regular inspection of the premises is necessary to ensure compliance with safety and health standards.


Licensing Of Factories

Under the Indian Factory Act 1948, it is mandatory for all factories to obtain a license along with registration. Section 2(M) of the Act makes licensing mandatory for factories engaged in hazardous processes and for specific factories specifying by the State Government that employ workers.

The licensing process usually begins with a greeting by the factory owner. The number of workers employed in the event, name and address of the factory, machinery being used in the factory, safety measures for the workers working in the factory, all these details are included in the application.

The officer granting the license reviews the application to ensure compliance with various provisions of the Act, including provisions related to the location of the factory, building requirements, sanitary facilities, ventilation, lighting and machinery safety.

The licensing process includes a detailed examination of the factory layout, machinery, safety systems and emergency preparedness, and to minimize the risks associated with the manufacturing process. The Chief Inspector issues a license authorizing to commence operations upon satisfactory compliance with the licensing requirements. Generally, the license of any factory is valid for a fixed period.

The license determines all the conditions related to the health of the workers, their safety, overtime, working hours, their salary, leave information, all these. Any factory will have to strictly follow all these rules, if for any reason any factory fails to follow the rules related to the license, then as a result the license of that factory can be canceled or the owner of the factory can be punished. Legal punishment can also be given.

Renewal and Revocation of Factories

Extension of factory license after a specified period involves renewal of the factory. It is mandatory to submit relevant documents like safety measures, compliance records, factory layout plan, machinery details of the factory to the appropriate government authority for the renewal process every year or every 5 years depending on the state government rules. All these documents are reviewed to assess whether the factory meets the standards set for the operator. If a factory does not comply with the prescribed standards, it may result in legal punishment or closure of operations or the license of that factory may be cancelled.

Environmental hazards, inadequate working conditions, non-compliance with statutory obligations such as payment of labor and maintenance of records in any factory can lead to the cancellation of that factory. Issuing notice to the factory manager, carrying out inspection and providing an opportunity to the factory manager for improvement, all these processes are involved in cancellation. If despite warnings, the manager of the factory violates all these rules, then the government authority has the right to close the factory by cancelling its license.

Both renewal and cancellation processes are essential to protect workers' rights, maintain workplace safety and ensure compliance with legal requirements. Renovation encourages regular assessment of factory infrastructure, machinery and safety measures. If we talk about cancellation, cancellation acts as a deterrent against negligence and non-compliance and also works for the safety and well-being of the workers working in the factory. Renewal and cancellation processes serve as a mechanism for accountability. It encourages compliance with regulatory requirements and continuous improvement in manufacturing.

Modifications and Refinements

The Factory Act of 1948 has undergone several amendments and refinements to address emerging labor issues and to align with international standards as follows 

  • Amendment Act 1987: This is an act which contains all the provisions related to the welfare of workers such as provisions for washing, storage and drying Along with this, there is provision for compensation for taking care of the children of women workers etc.
  • Amendment Act 2005: This amendment expanded the scope of the Act to cover additional aspects such as hazardous processes, dangerous substances and emergency situations.
  • Amendment Act 2016: This amendment was made to ensure the safety and welfare of workers and to increase the ease of doing business. This amendment simplified the compliance procedures for factories and introduced provisions related to the employment of women.


The Indian Factory Act 1948 is very helpful in protecting the workers and promoting their health. The law attempts to prevent accidents, occupational hazards, and exploitation of labour by setting strict standards. Effective implementation of registration and licensing procedures are mandatory under the Factory Act 1948. The main objective of this Act is to solve the problems of the workers working in the factory, to check the sanitary facilities, ventilation, lighting system and equipment related to machinery safety in the factory. This act is very beneficial for the workers working in the factory. Under this Act, a factory where work is done without the use of electricity and where 10 or more workers work is called a factory and where work is done without the use of electricity and 20 or more workers work is also called a factory. Factory status is given. Its main functions are to investigate about child laborer, provide security arrangements to them and decide the provision of leave for them. The Indian Factory Act 1948 applies to assembly factories in India.

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