Factory Licence under the Factories Act, 1948 — Applicability, Documents, Inspection, Renewal and Boiler Registration
Video Explanation & Insights
How to get a factory licence: documents, fees, inspection and renewal (Hindi)
2 videos on this topic
What the factory licence is, and who must take it
The Factories Act, 1948 is a central law administered by the state governments. It exists to protect the health, safety and welfare of the people who work in a factory — working hours, leave, ventilation, machine safety, fire precautions, hazardous chemicals — and it requires the occupier of a factory to obtain a licence from the state's Chief Inspector of Factories before running the premises. Every state operates its own portal and forms: Rajasthan through Raj-FAB, and Haryana, Uttar Pradesh and the others through their own labour or factories departments.
The occupier is the person with ultimate control over the factory — the proprietor, a partner, a director or the promoter named for the purpose — and the licence, the returns and the liability for non-compliance rest with that person. The Act applies once the premises cross a worker threshold or carry out a hazardous process, and increasingly a factory licence is also asked for in government tenders and by banks and buyers as proof that the unit is a lawful manufacturing establishment.
Applicability
| Situation | Rule | Notes |
|---|---|---|
| Manufacturing with the aid of power | 10 or more workers on any day of the preceding twelve months | Contract and casual workers count |
| Manufacturing without power | 20 or more workers | Handloom, hand-weaving and artisan units below this are outside the Act |
| Hazardous process | Licence required regardless of the number of workers | Chemicals, gases, petroleum products, flammable and explosive materials, fireworks and the processes listed in the First Schedule |
| Boilers and pressure vessels | Separate registration and certificate under the Boilers Act, 1923 | Annual inspection; the factory licence does not cover the boiler |
| MSME units | Same worker test applies | Udyam registration does not exempt the unit |
| Construction sites with prefabrication | Prefabrication activity on site can attract the Act | Check with the department before starting |
Three registrations before the licence
- •State business registration — in Rajasthan the Business Registration Number (BRN); other states have their own enterprise or shops-and-establishment registration.
- •Labour Identification Number (LIN) from the Shram Suvidha portal, which also links the unit's EPF and ESIC registrations.
- •Consent to Establish and Consent to Operate from the State Pollution Control Board — see our CTE / CTO page.
The factory licence application is filed only after these three exist, and the inspector will check the plant against the safety conditions before granting it. Operating a factory that meets the threshold without a licence attracts penalties and prosecution under the Act.
Documents for the application
Applicant
- •Occupier details: proprietor, partner or authorised director, with ID and photograph
- •MoA and AoA, or partnership deed / LLP agreement, PAN, GST
- •Board resolution or authority letter naming the occupier and manager
- •BRN, LIN and Pollution Board CTE / CTO
Premises
- •Ownership proof — sale deed, or lease deed / rent agreement
- •Electricity bill and sanctioned load letter
- •Site plan and building plan showing sections, exits, storage and machinery layout
- •Approved building plan or stability certificate where the state asks for it
Operations
- •List of machinery with horsepower
- •List of raw materials and finished products; hazardous substances declared
- •Process flow and number of workers, with worker list and Aadhaar copies
- •Safety measures: fire-fighting equipment, first aid, machine guarding, earthing; boiler registration if a boiler is installed
Application to licence
- 1Step 1 — Prerequisites: BRN (or the state equivalent), LIN on Shram Suvidha and CTE / CTO from the Pollution Board are obtained.
- 2Step 2 — Application: filed online on the state portal (Raj-FAB in Rajasthan) with the plans, machinery list, worker details and safety declarations; fee paid according to horsepower and number of workers and the validity period chosen.
- 3Step 3 — Inspection: the Inspector of Factories visits the premises and checks fire-fighting equipment, first aid, machine guarding, earthing, ventilation, welfare facilities and hazardous storage; queries are answered.
- 4Step 4 — Grant: the inspector may approve, raise a query or reject; on approval the licence is downloaded from the portal.
- 5Step 5 — After the licence: statutory registers are maintained, dangerous occurrences and accidents are reported, the annual return is filed, any change of occupier, manager or expansion is notified, and renewal is filed before expiry.
Timeline, validity and renewal
| Item | Rajasthan (as explained in the video) | Notes |
|---|---|---|
| Standard application | 7 days | After a complete application |
| Non-hazardous, without power | 15 days | |
| Hazardous process | 21 days | Inspection is more detailed |
| Validity | 1 to 10 years at the applicant's choice | Fee is charged for the period chosen; many states allow up to five |
| Renewal | Before expiry, for 1 to 10 years | Late renewal attracts a penalty fee |
| Boiler | Registration and annual certificate under the Boilers Act, 1923 | Separate application to the boiler inspector |
Fees depend on the state's schedule: installed horsepower and the maximum number of workers set the slab, multiplied by the number of years applied for. Taking the licence for five or ten years at once is usually cheaper than renewing annually.
A food-processing unit near Jaipur
A snack manufacturer installs 45 HP of machinery and employs 18 workers in a RIICO industrial area. It already has a BRN and Udyam registration; it obtains its LIN on Shram Suvidha in a week and its Consent to Operate from the Rajasthan State Pollution Control Board, then files on Raj-FAB with the site plan, machinery list and worker list, choosing a five-year validity. The inspector's visit notes that the fryer section has no fire extinguisher and the earthing certificate is missing; both are put in place within a week and the licence is granted. The unit's boiler is separately registered and certified under the Boilers Act.
Common mistakes
- •Applying before the Pollution Board consent or the LIN exists — the application is returned.
- •Counting only permanent staff: contract, casual and seasonal workers all count towards the threshold.
- •No fire-fighting equipment, first-aid box or machine guards on the day of inspection.
- •Running a boiler without registration under the Boilers Act, 1923.
- •Letting the licence lapse and running on an expired licence — penalties and prosecution follow.
- •Not notifying a change of occupier or manager, or an expansion in horsepower or workers.
Factory licence: questions we are asked
If you use power and have 10 or more workers, or 20 or more without power, yes — in the states that follow the Act's baseline thresholds. Any hazardous process needs a licence regardless of headcount.
The person with ultimate control of the factory: the proprietor, a partner, or a director named by the board. The occupier signs the application and carries the legal responsibility.
The state business registration (BRN in Rajasthan), the Labour Identification Number from Shram Suvidha, and Consent to Establish / Operate from the Pollution Control Board.
In Rajasthan, 7 days for a standard application, 15 days for a non-hazardous unit without power and 21 days for a hazardous unit, after a complete application and inspection.
You choose the period at filing — one year to several years (Rajasthan allows up to ten). The fee scales with the period, and renewal is filed before expiry.
No. A boiler needs its own registration and annual certificate under the Boilers Act, 1923 from the boiler inspector.
Fire-fighting equipment, first-aid arrangements, machine guarding and earthing, ventilation and lighting, welfare facilities and the handling of hazardous materials.
Yes. Every state has an online portal; we handle the prerequisites, the application, the inspection preparation and the renewal calendar pan-India.