Mandatory industrial operating permit issued under Section 6 and Section 7 of the Factories Act, 1948 by the Directorate of Industrial Safety and Health (DISH) or Chief Inspector of Factories (CIF), approving plant machinery layouts, worker health, occupational safety, and hazardous manufacturing processes
Under Section 2(m) of the Factories Act, any manufacturing unit employing 10 or more workers using electric power (or 20 or more workers without power) on any single day in the preceding 12 months is legally defined as a 'Factory'. Operating under a simple Shops and Establishment or Trade License once you cross this worker threshold is illegal, exposing directors to personal criminal prosecution.
đĄ A Factory License (issued in Form 4 under the Factories Act, 1948) is the primary legal authorization required to run any manufacturing plant in India. Issued by the Directorate of Industrial Safety and Health (DISH), it certifies that the factory building has approved machine spacing, adequate lighting, natural and mechanical ventilation, emergency escape routes, and mandated welfare amenities (drinking water, first aid, washrooms, and canteens for >250 workers). Operating a factory without this license is a criminal offense punishable by plant closure and imprisonment.
Comparing statutory commercial operating licenses in India.
| Operating Permit | Governing Statute | Applicable Establishments | Primary Regulatory Focus |
|---|---|---|---|
| Factory License (Form 4) | Factories Act, 1948 | Manufacturing plants employing >=10 workers with power | Occupational worker safety, machine guarding, ventilation, boiler inspections |
| Shops & Establishment | State Shops & Commercial Establishments Act | Retail shops, IT software offices, hotels, commercial agencies | Working hours, weekly off, leaves, wage payment terms |
| Municipal Trade License | State Municipal Corporation Act | All commercial and trading activities inside city limits | Public health, sanitation, waste disposal, civic zoning compliance |
| Boiler Registration Certificate | Indian Boilers Act, 1923 | Steam boilers and high-pressure steam pipelines | Annual ultrasonic thickness testing and safety valve calibration |
Factory building plan approval takes 15 to 30 days; final Form 4 Factory License is issued within 30 days of physical machine inspection and statutory fee payment.
Statutory fee scheduled on a graded scale based on total installed electric horsepower (HP / KW) and maximum number of workers employed on any single day (ranging from âš1,000 to âš50,000 per year).
Designated Factory Occupier / Factory Manager who holds clear land title or registered lease deed in an approved industrial zone (MIDC, RIICO, GIDC, SIPCOT, UPSIDA), approved building plans, and installed industrial machinery compliant with worker safety standards.
Manufacturing industries, chemical processing plants, engineering fabrication workshops, textile mills, pharmaceutical facilities, and food processing factories employing 10 or more workers with power, or 20 or more workers without power.
Submit building plans, machine layout, and process flowcharts online on your state's single-window industrial portal (e.g., DISH Maharashtra, Nivesh Mitra UP, Single Window Haryana) for plan scrutiny under Section 6.
The Joint Director / Chief Inspector of Factories examines ventilation, lighting, machine guarding, dust extraction, and hazardous chemical pipelines, then issues the Plan Approval Order.
Construct the premises and install machinery strictly in accordance with the approved layout plan; install safety guards on all moving gears, belts, and pulleys.
Submit Form 2 (Notice of Occupation) at least 15 days before starting manufacturing operations, specifying installed horsepower and maximum workers.
The Deputy Director / Factory Inspector conducts a comprehensive spot inspection: verifying machine guarding, pressure vessel test certificates, personal protective equipment (PPE), worker restrooms, and fire fighting equipment.
Upon payment of the prescribed scale fee, the licensing authority issues the digitally signed Form 4 Factory License with a unique Factory Registration Number.
Procedures for increasing electric power load, adding workers, or renewing the license.
If installing extra machinery (increasing horsepower) or hiring more workers beyond the sanctioned quota, submit Form 2 for 'Amendment of Factory License'.
Pay the pro-rata differential fee online based on the newly expanded horsepower and worker bracket.
Under recent ease-of-doing-business reforms, factory owners can renew their licenses for 5 or 10 years in advance by paying proportionate fees, avoiding annual bureaucratic filings.
Every factory occupier must submit an Annual Return (Form 27 / Unified Annual Return) detailing annual man-days worked, accident records, and welfare expenses by January 31 of each year.
Download the official factory license certificate from the state DISH single-window portal.
Visit your state's Directorate of Industrial Safety and Health portal (e.g., dish.maharashtra.gov.in, lms.labour.gov.in).
Sign in using your industrial single-window login ID and password.
Click on 'My Applications' > 'Factory Registration & License'.
Download the official digitally signed Form 4 certificate displaying the factory name, occupier's name, approved horsepower limit, and worker quota.
Standard solutions when factory inspectors issue non-compliance notices.
| Inspector Query / Notice | Factories Act Section | Actionable Remedial Measure |
|---|---|---|
| Notice issued for inadequate natural ventilation and ambient temperature | Section 13 (Ventilation & Temperature) | Install industrial turbo-ventilators on roof ridges, exhaust blowers, and air-cooling ducting to maintain prescribed air changes per hour. |
| Absence of statutory Canteen for workforce exceeding 250 workers | Section 46 of Factories Act, 1948 | Dedicate a hygienic dining space with clean drinking water and kitchen facilities as per statutory canteen specifications. |
| Occupier changed due to resignation of Managing Director | Section 2(n) and Section 7(1) Notice of Change | Submit Form 2 along with the Board Resolution appointing the new resident Director as the designated 'Occupier' within 7 days of change. |
Under Section 2(n) of the Factories Act, 1948, in the case of a company, ONLY one of the directors of the company can be designated as the 'Occupier'. A company cannot designate a general manager or site engineer as an occupier to shield directors from legal safety liability.
No. Under municipal zoning regulations and town planning master plans, manufacturing units categorized under the Factories Act can ONLY operate in designated Industrial Zones, Industrial Development Corporation clusters (e.g. MIDC, GIDC, RIICO), or authorized industrial layouts.
Under Section 92 of the Factories Act, 1948, operating without a valid license or violating safety rules is punishable with imprisonment for a term up to 2 years, or with a fine up to âš1,00,000, or both. In cases of fatal industrial accidents, the fine increases up to âš3,00,000.
Under Section 48 of the Factories Act, in every factory where more than 30 women workers are ordinarily employed, a clean, well-ventilated creche room must be provided and maintained for the use of children under the age of six years.
Comprehensive statute to consolidate and amend the law regulating labour in factories and occupational safety.
Ministry of Labour technical wing coordinating industrial safety, occupational health, and inspection standards.
Mandatory statutory safety clearance issued under State Fire Prevention and Life Safety Acts and Part 4 of the National Building Code (NBC 2016) by the Chief Fire Officer (CFO), certifying that high-rise residential towers, hospitals, educational institutions, commercial complexes, and industrial premises comply with active and passive firefighting systems
Mandatory statutory environmental permissions issued by State Pollution Control Boards (SPCB) and Pollution Control Committees (PCC) under Section 25 of the Water Act, 1974 and Section 21 of the Air Act, 1981, comprising Consent to Establish (CTE) before plant construction and Consent to Operate (CTO) before commercial production
Registration for Micro, Small & Medium Enterprises
Legal document confirming the formation of a company (Private Ltd, Public Ltd, LLP)
Permission to carry out a particular trade or business at a specific premises
Mandatory statutory product quality and purity certifications issued under the Bureau of Indian Standards Act, 2016 (BIS Act) via the Manakonline portal, comprising the ISI Mark (Certification of Manufacturers Scheme I for industrial & consumer goods) and 6-digit alphanumeric HUID Gold Hallmarking for jewellers
Issued by State Labour Departments through the Directorate of Industrial Safety and Health (DISH) or Office of the Chief Inspector of Factories under the Factories Act, 1948.
Ministry of Labour and Employment - Factories Act â