How to start Factory in India?

How to start Factory in India?

If you are going to start any Pharmaceutical, Ayurvedic, Cosmetic and Food & dietary supplements manufacturing unit and that requires more than ten workers then you have to register your manufacturing unit under Factory Act, 1948 also along with required licenses and documents required for starting pharmaceutical manufacturing unit, Ayurvedic Manufacturing Unit, Cosmetic Manufacturing Unit and/or Food & Dietary Supplements Manufacturing Unit.

First we will understand definition of Factory, workers and manufacturing process under Factory Act, 1948.

What is Factory?

“Factory” means any premises including the precincts thereof

  • whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or
  • whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on

Who is a Worker?

“worker” means a person [Employed, directly or by or through any agency (including a contractor) with or without the knowledge of the principal employer, whether for remuneration or not], in any manufacturing process, or in cleaning any part of the machinery or premises used for a manufacturing process, or in any other kind of work incidental to, or connected with, the manufacturing process, or the subject of the manufacturing process [but does not include any member of the armed forces of the Union];

What is Manufacturing Process?

“Manufacturing process” means any process for

  • making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing, or otherwise treating or adapting any article or substance with a view to its use sale, transport, delivery or disposal, or
  • Pumping oil, water, sewage or any 3 other substance; or
  • Generating, transforming or transmitting power; or
  • Composing types for printing, printing by letter press, lithography, photogravure or other similar process or book binding; or
  • Constructing, reconstructing, repairing, refitting, finishing or breaking up ships or vessels;or
  • Preserving or storing any article in cold storage

Approval, licensing and registration of factories:

State government is authorities to make rule under factory act, so approval. Licensing and Registration process and requirements may vary state to state. Contact your state Concern Inspector under this act for detailed information regarding setting up factory in concern state.

1. State Government may makes rules:

  • Requiring, the submission of plans of any class or description of factories to the Chief Inspector or the State Government.

(aa) Requiring the previous permission in writing of the State Government or the Chief Inspector to be obtained for the site on which the factory is to be situated and for the construction or extension of any factory or class or description of factories

  • Requiring for the purpose of considering application for such permission the submission of plans and specifications;
  • Prescribing the nature of such plans and specifications and by whom they shall be certified;
  • Requiring the registration and licensing of factories or any class or description of factories, and prescribing the fees payable for such registration and licensing and for the renewal of licences;
  • Requiring that no licence shall be granted or renewed unless the notice specified in section 7 of this act has been given.

2. If on an application for permission referred to in [clause (aa)] of sub-section (1) accompanied by the plans and specifications required by the rules made under clause (ii) of that sub-section, sent to the State Government or Chief Inspector by registered post, no order is communicated to the applicant within three months from the date on which it is so sent, the permission applied for in the said application shall be deemed to have been granted.

3. Where a State Government or a Chief Inspector refuses to grant permission to the site, construction or extension of a factory or to the registration and licensing of a factory, the applicant may within thirty days of the date of such refusal appeal to the Central Government if the decision appealed from was of the State Government and to the State Government in any other case.

Process for Approval, licensing and registration for factory

Here occupier means any person who is owner, director, manager or any authorized person for running a factory. He has to give prior notice at least fifteen days before begins  to occupy or use any premises as a factory, sent to the Chief Inspector a written notice containing

  • The name and situation of the factory;
  • The name and address of the occupier; the name and address of the owner of the premises or building (including the precincts thereof) referred to in section 93;
  • The address to which communications relating to the factory may be sent;
  • The nature of the manufacturing process
  • The total rated horse power installed or to be installed in the factory, which shall not include the rated horse power of any separate stand-by plant;
  • The name of the manager of the factory of the purposes of this Act;
  • The number of workers likely to be employed in the factory;
  • The average number of workers per day employed during the last twelve months in the case of factory in existence on the date of the commencement of this Act.
  • Such other particulars as may be prescribed.

Hope above information is helpful to you…

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  1. AJay ji. I want to get a soap mixed with certain ayurveda ingredients made from a authorised manufacturing and sell /market the same. What all legal requirements are required to be done by me. I have a get registered company.

    1. means you want to get manufactured a ayurvedic soap from authorized Ayurvedic manufacturer with your own brand name and company name. You will need company registration and GSTIN for it. With these two requirements you can start selling and marketing of ayurvedic soap with your own brand name. For selling and marketing of ayurvedic products, no need of drug related license. Only license is required to manufacture ayurvedic medicines.

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