Factory License
A factory licence is the State Government's approval that a factory occupier needs before starting or expanding a factory. Since 21 November 2025 it is governed by the Occupational Safety, Health and Working Conditions Code, 2020, which replaced the Factories Act, 1948; existing state factory rules continue during the transition. A factory is premises with 20 or more workers using power, or 40 or more without power.
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An Overview of a Factory License
A factory license is a legal certificate that factory owners issue from the state government. Every state's factory license is different. It is very important to get this license before starting the operations of a factory. This license tells whether the factory is properly following the rules of safety, health and welfare, and whether the factory is working properly under the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code), which replaced the Factories Act, 1948 from 21 November 2025. Working without a factory license is a legal offence. This license protects the workers, reduces the chances of risk, and ensures that the factory operations run very smoothly. Once the license expires, it is important to get it renewed. Without a Factory license renewal, any owner can’t proceed with the work. Key points about the factory license are:
- This is a legal approval to run a factory.
- This builds a trust that the factory is properly following the safety, health and welfare standards.
- It is compulsory under the OSH Code, 2020 and the State's rules made under it.
- It has to be renewed regularly, otherwise, one might have to face consequences.
Which law applies as of November 2026?
The four labour codes, including the Occupational Safety, Health and Working Conditions Code, 2020 (Act 37 of 2020), were made effective from 21 November 2025. The OSH Code repeals the Factories Act, 1948 (section 143) and now governs the approval, licensing and registration of factories:
- Section 79: the State Government makes rules on submission of factory plans, permission for the site and for construction or extension, and licensing and renewal of factories.
- Section 119: one common licence can cover a factory, beedi and cigar premises and the engagement of contract workers. The authority must issue it electronically within 45 days of the application, or it is treated as issued.
- Section 119(5): a factory licence obtained under the old law before the Code started stays valid for the period it was issued for, and must be obtained afresh under the Code when it expires.
For factories, the "appropriate Government" is the State Government, so the forms, fees and licence periods come from each State's rules under the Code. Rules and notifications made under the repealed Acts continue during the transition where they are not contrary to the Code, until they are replaced (section 143(3)).
Who Needs a Factory Licence in India (as of November 2026)
As of November 2026, factories are licensed under the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code), which came into force on 21 November 2025 and repealed the Factories Act, 1948.
What counts as a factory
Under section 2(1)(w) of the OSH Code, a factory is any premises where a manufacturing process is carried on and where:
- 20 or more workers are working, or worked on any day in the previous 12 months, if the process uses power; or
- 40 or more workers are working, or worked on any day in the previous 12 months, if the process does not use power.
The definition does not cover mobile units of the armed forces, railway running sheds, or hotels, restaurants and eating places.
Two points can change this for your unit:
- State numbers: where a State law in force just before the Code set a different number of workers, that State number continues until the State legislature amends it (proviso to section 2(1)(w)).
- Smaller premises: the State Government can declare that the factory provisions apply to any place where a manufacturing process is carried on, whatever the number of workers (section 81).
Registration and licence
- An establishment to which the Code applies, including a factory with 10 or more workers, must apply electronically for registration within 60 days (sections 2(1)(v) and 3).
- A factory also needs a licence under the State's rules made under sections 79 and 119 of the Code.
Earlier rule, for reference
Under the repealed Factories Act, 1948 (section 2(m)), the limits were 10 or more workers with power and 20 or more without power. A licence issued under that Act stays valid for the period it was issued for (section 119(5) of the OSH Code).
Benefits of Obtaining a Factory License/Trade License
Having a factory license bestows businesses with innumerable benefits, especially when it comes to undertaking operations in the manufacturing industry. Having a license gives an unsaid legitimacy to legally establish and carry out the procedures in compliance with the regulations. No wonder, let us explore the advantages of having a factory license, which is as follows-
- Legal compliance
One of the key advantages of a factory license is adhering to Legal compliances. Manufacturing operations must specify standards and regulations as narrated by the local authorities. On top of it, obtaining licenses is a must-have for businesses demonstrating a commitment to commence the operations encircling within the legal framework to avoid any penalties due to non-compliance.
- Improved credibility
It goes without saying how a factory license endorses improved credibility. As for manufacturing businesses such as this, it ensures and assures that it adheres to guidelines and is under required supervision. Having a factory license enables you to come across as a legitimate organization offering high-quality products.
- Adheres to safety standards
A factory license is like an assurance that meets those safety standards or implemented measures. In addition, the main aim here is ensuring safety, by minimizing the risk of accidents and other injuries.
- Competitive edge
Having a factory license acts as a boon and gives you an edge over others in the competitive industry. As it is with legal compliance, enhanced credibility and adherence to safety standards, gives you a competitive edge over unlicensed operators. Once you conform to it, it is only then you attract potential investors and contracts.
Therefore, the above-mentioned points are quite a reason why you need to obtain a factory license to operate or initiate.
Documents Required For Obtaining a Factory License
The documents required for obtaining a factory License are as follows-
- Owner ID and Address roof.
- Address proof of your factory location, such as an electricity bill or rental agreement.
- Consent from the Pollution Department
- NOC from the Water & fire department
- PAN Card copy of your business
- List of directors
- Partnership deed or Board resolution.
- Information on particulars of equipment & raw material.
- Municipal corporation Tax receipts
How to Obtain a Factory License: A Step-by-Step Guide
The factory license registration process is simple but must be followed carefully. Here are the main steps:
- Plan Submission: The factory owner has to submit the factory plan to the state labour department before starting construction or expansion. If this plan is approved, then only you can file for the application.
- Filing Application: The owner can apply online or offline to the state lab department or any factory department. Whatever documents are submitted must be properly checked, signed and attached.
- Payment of Fees: The person applying for a factory license will have to pay the registration fee.
- Grant of Factory License: As soon as all the verification and inspection are done, the application will be cleared, and the department will issue the factory license
Factory License Online Application
The factory establishment license online application is a very easy and fast process. It may vary from state to state, but what generally happens is this:
- First of all, go to the site of the labour department or the department of factories
- Click on the option of ‘factory registration’
- Create an account and log in
- Fill out the online application and upload the required documents in it.
- Pay the license fees.
- The department will inspect and verify the application, and if it is correct, will issue the factory license.
Factory License Renewal & Compliance
Obtaining a factory license is a full-fledged process. It is vital to note that factory license renewal is an unsaid obligation, which mentions the expiry of licenses that need to be renewed periodically. You need to remain vigilant in assessing and tracking the renewal date by submitting the documents along with the prescribed fees in a timely manner. It is advisable to avoid being a victim of late fees, penalties or legal issues.
Most importantly, factory license renewal meets the commitment to ensure compliance with safety standards throughout the operations. To recheck with the same, regular inspections will be undertaken by regulatory bodies in ensuring compliance and failing to do so might result in fines, penalties or, revocation of the factory license.
Licence period and renewal under State rules
Each State sets the licence period, renewal process and fees in its rules under the OSH Code. For example, under the Uttar Pradesh Occupational Safety, Health and Working Conditions Rules, 2026 (notified on 27 August 2026):
- a licence stays in force for one year (rule 117(1));
- renewal for up to ten years is applied for online in Form-45 at least 30 days before the licence expires, with a stability certificate in Form-43 (rule 117(2));
- a late application needs an extra fee of 25% of the licence fee (rule 117(4));
- if the authority does not act within the time notified under the Uttar Pradesh Janhit Guarantee Adhiniyam, 2011, the licence is deemed renewed (rule 117(5)).
Why trust Corpseed with your queries?
Corpseed is one of the top consulting firms, offering comprehensive assistance in the factory and labour-related services, guiding businesses through the necessary processes. We help enterprises in obtaining, renewing, and amending factory licenses by managing documentation, ensuring compliance, and coordinating with authorities for smooth and hassle-free approvals. How Corpseed Can Help with Factory License:
- Documentation Support: We prepare and file accurate documents required for the license application.
- Layout Plan Approval: We assist in getting layout plans approved by authorities.
- Safety Standards Guidance: We guide businesses in meeting workplace safety and health standards.
- Authority Coordination: We coordinate with state departments to speed up approvals.
- License Renewal: We provide complete assistance in the timely renewal of factory licenses.
- License Amendments: We help in making amendments whenever there are changes in factory operations.
- End-to-End Support: We will help from the first step of the process till the last, so that you don’t suffer from any issues.
Connect With Corpseed
Connect with the Corpseed team to discuss your requirements at IVR: 7558640644 or hello@corpseed.com. It takes 20–25 minutes to discuss the requirement.
Dedicated Manager
Once you discuss the requirement, we will align a dedicated Account Manager to understand your business needs and assist throughout the process.
Real Time Update
Track the progress of your application and always know what’s in progress and what’s done.
Job Completed
Once the job is completed, you will receive registrations & certifications directly to your email ID and at your doorstep.
Frequently Asked Questions
Quick answers to common questions about this service.
What is the Process involved in the Licensing of factories act?
Factory licensing is now done under the Occupational Safety, Health and Working Conditions Code, 2020, which replaced the Factories Act, 1948 from 21 November 2025. The licence is granted by the authority the State Government designates, under the State's rules made under sections 79 and 119 of the Code.
The usual steps are approval of the site and factory plans, an online licence application with the prescribed fee, and issue of the licence. Under section 119(4), the authority must issue the licence electronically within 45 days of the application, or it is treated as issued.
Who requires the factory license?
Premises that are a "factory" under section 2(1)(w) of the OSH Code, 2020: a manufacturing process with 20 or more workers using power, or 40 or more workers without power. Hotels, restaurants and eating places are excluded. A State's own pre-Code worker numbers can still apply in that State, and the State can extend the factory provisions to smaller premises (section 81).
What are the benefits of a factory license?
The benefits of a factory license centre around, factors such as adherence to safety rules, competitive advantage and legal compliance.
What are the essential documents required for obtaining a factory license?
The essential documents needed for obtaining a factory license, are as follows-
- Proof of ownership or lease agreement of the factory premises.
- Layout plans of the factory showing the location of machinery, storage areas, and other facilities.
- Fire NOC with safety measures, including fire extinguishers, fire alarms, and emergency exits.
- Environmental clearances and pollution control measures.
- Certificates of compliance with health and safety regulations.
- Employee records, including their qualifications and training certificates.
What are the consequences of not operating with a factory license?
There would be serious consequences in case of non-compliance, which include heavy fines, imprisonment and followed by destroying the reputation of your company in the eyes of customers.
Is obtaining a factory license mandatory?
Yes, for premises that are a factory under the Occupational Safety, Health and Working Conditions Code, 2020. As of November 2026 the thresholds in section 2(1)(w) are 20 or more workers where the manufacturing process uses power and 40 or more where it does not. The old limits of 10 and 20 workers came from the Factories Act, 1948, which was repealed on 21 November 2025. Check your State's rules, because a State's earlier numbers can continue (proviso to section 2(1)(w)).
What is a factory certificate?
It usually means the factory licence issued by the State authority. For example, in Uttar Pradesh the licence is issued electronically in Form-46 by the Chief Inspector-cum-Facilitator once the site plan is approved and the factory complies with the Code and the rules (rule 116, Uttar Pradesh Occupational Safety, Health and Working Conditions Rules, 2026).
What is the validity period of a factory license in Uttar Pradesh, and how can it be renewed?
Under rule 117 of the Uttar Pradesh Occupational Safety, Health and Working Conditions Rules, 2026, a factory licence stays in force for one year. You can apply online in Form-45 to renew it for up to ten years, at least 30 days before it expires, with a stability certificate in Form-43 and the fee for each year. A late application needs an extra fee of 25% of the licence fee.
How do I start my factory?
For starting a factory, you can contact Corpseed to help you streamline the process, i.e. from helping you in legal compliances to establishing a factory, we have it all.
Are there any legal rules in place?
Yes. Since 21 November 2025, factories are governed by the Occupational Safety, Health and Working Conditions Code, 2020, which repealed the Factories Act, 1948. Each State makes its own rules under the Code for plan approval, licensing and renewal (section 79). Rules made under the old Acts continue during the transition where they are not contrary to the Code (section 143(3)).
What necessary papers are required for the factory license renewal process?
The necessary documents required include the factory license renewal form, the previous factory license, relevant NOCs, and many other items.
How is factory license applicability determined?
By the number of workers and whether the manufacturing process uses power: 20 or more workers with power, or 40 or more without power, under section 2(1)(w) of the OSH Code, 2020. A State's earlier numbers can continue in that State, and the State can extend the provisions to smaller premises (section 81).
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