Factory License Registration Under the New OSH Code

A factory license is the state's written permission to run a manufacturing unit at a named place, with a set number of workers and a set amount of installed power. The state factories directorate issues it. In many states this office is called the Directorate of Industrial Safety and Health, or the Department of Factories and Boilers.

For 77 years the licence came from Section 6 of the Factories Act, 1948. That changed on 21 November 2025. On that date the four Labour Codes came into force, as the Labour Ministry release of 21 November 2025 confirms. The Factories Act is one of the thirteen laws repealed by Section 143 of the Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code).

Where the licence sits in the new law

• Section 2(1)(w): defines a factory, with new worker limits.
• Section 3: registration of establishments, applied for electronically.
• Section 79: lets the state make rules for plan approval, site permission, and licensing with fees.
• Section 119: a common licence for factories, contractors and certain industrial premises, issued electronically.
• Section 143(3): things done under the old Acts are treated as done under the Code.

So the old name stays in daily use. People still say "factory licence", "factory act license" or "factory license registration". The legal base is now the OSH Code and the state rules made under it. Where a state has not yet notified final rules, its old Factories Rules still run the forms and fees. The Labour Ministry's FAQs say old rules stay in force until new rules are notified.

The licence is held by the occupier. That is the person with final control over the factory's affairs. In a company, a director is named as the occupier. The licence is tied to one address. A second plant needs its own licence.

A place is a factory under the OSH Code if a manufacturing process runs there and the worker count crosses a limit. The limits doubled from the Factories Act.

The text of Section 2(1)(w) says "twenty or more workers are working, or were working on any day of the preceding twelve months" where power is used, and forty or more where it is not. You can read it in the OSH Code, 2020 (India Code).

Three words that decide the answer

• Manufacturing process: making, altering, repairing, finishing, packing, oiling, washing, cleaning or otherwise treating an article for use, sale, transport or disposal. Printing, pumping and generating power are covered too.
• Power: the Code does not define it. The old Factories Act meant electrical or other energy that is mechanically transmitted and not made by people or animals, and that meaning is still the usual guide.
• Worker: under the Code, a person employed for hire to do manual, skilled, technical, operational, clerical or supervisory work. Managers, and supervisors earning above the wage limit (₹18,000 a month, as the Labour Ministry's FAQs explain), are left out. Ask us before you leave contract workers out of the count.

Peak day, not average

The test looks at any single day in the last twelve months. A unit with 15 workers most of the year and 22 on one festive-season day is a factory, if it uses power.

Places that may be covered even below the limit

Section 81 lets the state apply the factory provisions to any place where a manufacturing process runs, whatever the headcount. States use this for risky trades. Hazardous processes listed in the First Schedule, such as foundries and metal smelting, also face extra rules under the Code.

The definition leaves out mobile units of the armed forces, railway running sheds, and hotels, restaurants and eating places. Mines are dealt with under their own provisions of the Code.

Crossing the factory limit means you need a factory licence. Staying below it does not mean you need nothing. The OSH Code also covers smaller "establishments", and those need registration under Section 3.

Decision table for a manufacturing unit

Worked example: a 25-worker unit in Ghaziabad

Ravi plans a plastic moulding unit in an industrial area of Ghaziabad. He will run four moulding machines and employ 25 workers. Here is how we would plan his approvals:

1. He uses power and has 25 workers, so it is a factory under Section 2(1)(w).
2. Plan approval comes first, before construction or machine installation.
3. Plastic moulding usually needs pollution consent, so consent to establish is applied for in parallel.
4. Fire safety approval is checked against the building's size and height.
5. Once the shed is ready, consent to operate and the factory licence follow.
6. With 25 workers, he must also register for PF (20 or more employees) and ESI (10 or more).

Had Ravi kept 18 workers, he would not need a factory licence. He would still need Section 3 registration and ESI. That is why the worker count you plan for matters more than any other number.

Is it mandatory for MSMEs?

Yes, if the unit crosses the limit. Udyam registration does not replace a factory licence. The test is workers and power, not turnover or investment.

Four different papers are often confused. They come from different laws and different offices.

Delhi has two factory licences

Delhi is the clearest case. The Delhi Labour Department issues the factory licence under the factory law. The Municipal Corporation of Delhi (MCD) separately licenses factories under Sections 416 and 417 of the Delhi Municipal Corporation Act, 1957. The MCD factory licence portal says all applicants must apply for the MCD factory licence through that portal only. It also says:

• The MCD licence runs up to 31 March of the current financial year.
• Late renewal penalties apply after 30 April each year.
• Fire NOC is not needed for the household category, or for other categories on land under 250 square metres.

In July 2025, as widely reported, MCD stopped asking for a separate factory licence from units in industrial areas notified by the Delhi government or set up by DSIIDC. The allotment letter or lease deed, or the Udyam certificate for MSMEs, acts as a deemed licence. A fee of 5% of annual property tax is paid with the property tax. This is a municipal change. It does not replace the Labour Department licence for units above the factory limit.

Outside Delhi, most cities issue a trade license for industrial trades. It deals with nuisance, health and zoning. It does not replace the factory licence.

Plan approval is the first step for a new factory, and it comes before construction or extension. Section 79(1) of the OSH Code lets the state make rules on submitting plans, permission for the site, and permission to build or extend.

What the plan approval file usually holds

• Site plan showing the plot, roads, open spaces and nearby buildings
• Building plans: floor plans, elevations and cross sections, drawn to scale
• Machinery layout with aisles, exits and working space
• Flow chart of the manufacturing process
• List of raw materials, products and any hazardous substances
• Ventilation, lighting, fire exits, toilets, drinking water and effluent arrangements
• Ownership or lease papers for the land

Deemed permission and appeals

Section 79(2) says that if no order is sent within the period set by the rules, up to thirty days, the permission is treated as granted. Section 79(3) gives a right of appeal within thirty days if the site or licence is refused.

Replacing or adding machinery is not an "extension" if it does not cut the minimum clear working space or worsen environmental conditions. That is the Explanation to Section 79. So swapping an old machine for a similar new one does not need fresh plan approval in that case.

Stability certificate

Before the licence is granted, most states ask for a stability certificate for the building. A competent person recognised by the state signs it after checking the structure and its load. Most state portals ask for it with the licence application. If you add floors, heavy machines or new sheds, expect a fresh certificate.

Hazardous processes

For a hazardous process, Section 83 gives a site appraisal committee the job of recommending on the first location or expansion of the factory, within thirty days. Plan review is stricter and takes longer.

Our tip: get the architect, the competent person and the factory consultant talking before the drawings are frozen. Most plan queries come from exits, aisle widths and toilets that were not planned for the real worker count.

Keep these documents ready. States ask for slightly different lists, so we send you your state's exact list on the first call.

Business and occupier documents

• PAN of the business
• Certificate of incorporation, MoA and AoA, LLP agreement or partnership deed
• Board resolution or authority letter naming the occupier and the manager
• ID and address proof and photographs of the occupier and the manager
• List of directors or partners with addresses
• GST and Udyam certificates, if you have them

Premises documents

• Sale deed, lease deed or allotment letter from the industrial authority
• Rent agreement and owner's NOC, if rented
• Approved building plan and the plan approval letter from the factories office
• Stability certificate from a competent person
• Local body building permission or completion certificate, where the state asks for it

Plant and process documents

• Latest electricity bill or sanctioned load letter, to show installed power
• List of machinery with horsepower or kilowatt rating
• Manufacturing process flow chart
• List of raw materials, products and by-products
• Expected maximum number of workers, men and women

Clearance copies to attach

• Consent to establish or consent to operate from the State Pollution Control Board, if your category needs it
• Fire NOC, where the building or activity needs one
• Boiler registration, if a boiler is used
• Fee payment receipt

Scan every document as a clear PDF. The Delhi Labour Department's factory licence FAQ, for example, asks for the existing building plan under Rule 3A of the Delhi Factories Rules, 1950, along with the process flow chart, raw material list and machinery list.

You apply online on your state's labour or single window portal. Here is how TaxCaller handles it, from first call to licence.

1. Applicability check (day 1): we count workers and installed power, look at your process, and confirm whether you need a licence, only Section 3 registration, or both.
2. Approval map: we list every approval in the right order: plan approval, pollution consent, fire NOC, licence, and labour registrations.
3. Plan approval: we check the drawings against the state rules for space, exits, ventilation and toilets, then file the plan approval application.
4. Portal account: we help you create the occupier's login on the state portal, such as Nivesh Mitra in Uttar Pradesh.
5. Licence application: once the building is ready and the stability certificate is signed, we fill the licence form with workers, power, process and occupier details.
6. Fee payment: the portal works out the fee from your workers and power. You pay it online, directly to the state.
7. Queries and inspection: we reply to queries. If an Inspector-cum-Facilitator visits, we give you a checklist of what will be checked.
8. Licence issued: you download the digitally signed licence. We share its expiry date and set a renewal reminder.

Under the new Code: one application where the state allows it

Section 119 of the OSH Code allows one common licence covering a factory, contract labour and certain industrial premises. It is applied for electronically. If the authority does not issue it within forty-five days, Section 119(4) says it is treated as issued and auto generated. States are bringing this into their portals at different speeds.

What you do and what we do

You sign as occupier, approve the form and pay the state fee. We prepare, check, file and follow up. Nothing is submitted until you have seen it. You can also look up approvals for your state on the National Single Window System.

The factory licence is a state process, so the portal depends on where your unit is. Under the OSH Code, the state is the appropriate government for most factories.

Uttar Pradesh (Noida, Greater Noida, Ghaziabad, Lucknow, Kanpur)

UP's industrial approvals run through Nivesh Mitra, the state's online single window, along with the UP Labour Department portal. The usual flow is:

1. Register on Nivesh Mitra with mobile and email OTP.
2. Choose the Labour Department service for factory plan approval or licence.
3. Fill in the unit details: workers, power, process and occupier.
4. Upload documents and pay the fee online.
5. Track the application on the dashboard and attend any inspection.
6. Download the licence once approved.

Nivesh Mitra's own reform page says UP extended factory licence validity up to 10 years. UP notified its final Occupational Safety, Health and Working Conditions Rules on 27 August 2026 (Notification No. 962/XXXVI-03-2026-1903305, as reported in legal updates). Forms and screens are moving to the new rules, so we check the live portal before every filing.

Delhi

The Labour Department's factory licence is applied for on the e-District Delhi portal, as the department's FAQ explains. You may choose a licence for one, five or ten years. The MCD municipal licence is separate and goes through the MCD portal.

Haryana

Haryana's Labour Department handles factory plan approval and licences. As in most states, expect to give the approved plan and a stability certificate. Haryana also runs a self-certification scheme for some units.

Telangana

Applications go through the Telangana Factories Department portal. The portal offers online plan approval, licence grant, amendment and transfer, and payment of licence fees for up to 10 years. New units can also use the state's TG-iPASS single window.

Maharashtra, Madhya Pradesh and other states

Maharashtra routes many industrial approvals through its MAITRI single window. Madhya Pradesh and other states run labour services on their own portals. Forms are still named under the old Factories Rules in states that have not notified final OSH rules.

There are two separate costs. The government fee goes to the state. Our professional fee covers the work we do. They are never mixed.

1. Government fee (paid to the state at actual)

Every state charges a licence fee based on two things: installed power (horsepower or kilowatts) and the maximum number of workers on any day of the year. Plan approval may carry its own scrutiny fee. As an official example, here is part of the Delhi Labour Department fee schedule for a one-year factory licence, in force since 1 January 2001 and used for grant and renewal:

The full Delhi table also has bands for 251 to 500, 501 to 750 and 751 to 1,000 workers. Other states set their own amounts. If you choose a longer licence period, the portal shows the fee for the full period. The portal calculates the exact fee before you pay, and we show it to you first.

Other government costs you may meet

• Plan approval or scrutiny fee, where the state charges one
• Pollution consent fee to the State Pollution Control Board
• Fire NOC fee to the state fire service
• Registration fee for the establishment under Section 3, where the state charges one
• Competent person's charges for the stability certificate, paid to that person

2. TaxCaller's professional fee

TaxCaller's fee starts at ₹6,999 + GST for a factory licence application in one state. Government fees, such as the licence fee, scrutiny fee and consent fees, are paid separately at actual. The plans below show what each level covers. You see the full quote before we start.

A clean application usually takes a few weeks from plan approval to licence. The real time depends on your state, your building and how fast queries are answered.

State rules set their own timelines within these limits. Some states, such as Haryana, also run self-certification schemes that reduce inspections for eligible units.

What slows a file down

• Building not finished, or built differently from the approved plan
• Stability certificate missing or signed by someone the state does not recognise
• Pollution consent still pending
• Occupier details that do not match the company's records
• Late replies to queries

Do not start production on the strength of a pending application unless the state's rules treat it as deemed granted. If in doubt, ask us on the first call.

Validity depends on your state and on the period you choose and pay for. Some states issue licences for one year at a time. Others allow up to ten years.

What happens to old Factories Act licences

Section 119(5) of the OSH Code treats licences obtained under the earlier central labour laws as obtained under the Code. They stay valid for their original period. After that, you renew under the Code and the state's new rules. So a licence that runs to December 2027 stays good till then.

How renewal works

1. Start at least 30 days before expiry, or earlier if your state requires it.
2. Log in to the same portal and open the renewal service.
3. Update workers, power, machinery and occupier details if they changed.
4. Upload fresh consent, fire NOC or stability papers if those have expired.
5. Pay the renewal fee and download the renewed licence.

When to amend instead

Changes in the occupier, manager, name, workers or power above the licensed level need an amendment. Do not wait for renewal. Running above your licensed workers or power can lead to penalties, so amend first.

The licence is the start. Running a factory brings records, returns and notices every year.

Registers and records

Section 33 asks every employer to keep registers in the prescribed form, electronically or otherwise. It also asks for wage slips to workers, electronically or otherwise. States set the actual registers: workers, attendance, wages, overtime, leave, accidents and so on.

Annual return

Section 133(2)(v) lets the government make rules on returns and the periods for filing them. Each state's rules set the form and the due date, so we confirm both for your state. Section 33 asks for returns to be filed with the Inspector-cum-Facilitator, and new rules are moving this filing online.

Notices you must give

• Commencement and closure: Section 5 asks the employer to give notice of starting and stopping operations, electronically.
• Accidents and dangerous occurrences: must be reported as the Code and state rules require.
• Changes: occupier, manager, ownership and address changes are updated on the portal within the state's time limit.

Yearly working calendar

Section 96 sets a penalty of ₹50,000 to ₹1 lakh for not keeping registers or not filing returns.

As your workforce grows, the OSH Code adds staff and facilities you must provide. Here are the thresholds from the Code itself.

Daily duties for every factory

• Safe machines with guards, safe floors and exits
• Clean premises, ventilation, lighting, drinking water and toilets
• Yearly health check-ups at no cost to workers above the age set by rules
• Appointment letters to every worker
• Training in safe work and use of protective equipment

Women at work

Section 43 lets women work before 6 a.m. and after 7 p.m. with their consent, subject to safety, holiday and working-hour conditions set by the government. The employer must arrange safe transport and other conditions under state rules.

The licence application asks for your expected maximum workforce. Plan facilities for that number, not today's headcount.

Penalties under the OSH Code are higher than under the Factories Act. The old Act's Section 92 allowed up to two years' prison, a fine up to ₹1 lakh, or both. Here is the new scale.

Chance to comply before prosecution

Section 110 gives the employer an opportunity to comply within 30 days before prosecution starts. This does not apply to accidents, or to the same violation repeated within three years. Courts take cognizance only on a complaint filed within six months of the inspector learning of the offence.

Compounding

Section 114 allows many offences to be settled by paying an amount. For a penalty, it is 50% of the maximum. For an offence with a fine, it is 75% of the maximum fine. Compounding is not available for a repeat within three years.

Directors are liable too

Under Section 109, persons in charge of a company's business can be proceeded against, unless they show they did not know or used due diligence. The occupier is the first person the inspector looks at.

A factory licence is rarely the only approval. Most units also need pollution consent and fire approval, and the factories office often asks for them.

Pollution consent: CTE and CTO

Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 and Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 need the State Pollution Control Board's consent for many industries. There are two stages:

• Consent to Establish (CTE): before you build or install machines.
• Consent to Operate (CTO): before you start production.

Industries are grouped as red, orange, green or white by pollution potential. White category units generally do not need consent, but they may need to inform the board. Red and orange units face longer review.

Fire NOC

The state fire service issues fire approval based on building height, area and the materials stored. A unit storing solvents, plastics or gas cylinders usually needs it. Read our fire NOC guide for the process. In Delhi, the MCD portal says fire NOC is not needed for its household category, or for units on land under 250 square metres.

The right order

Other approvals by industry

• Boiler registration with the state boilers inspectorate, if you use a boiler
• FSSAI licence for food factories
• Drug manufacturing licence for medicines
• BIS licence for products under compulsory certification
• Electricity load sanction from the discom

These are the problems we see most often. Each one can delay the licence by weeks.

1. Counting workers on an average day. The law looks at any day in the last twelve months. A busy season can push you over 20.
2. Building first, approval later. Plan approval is meant to come before construction. Fixing a built shed costs far more than fixing a drawing.
3. Wrong occupier. For a company, a director must be the occupier. Naming a plant manager alone leads to a query.
4. Power mismatch. The power in the form must match the electricity bill and the machinery list. Inspectors check all three.
5. Old forms after the new rules. In states that notified OSH rules in 2026, filing on old Factories Rules forms can lead to queries. Check the portal's current form.
6. Industrial land rules ignored. Units in residential or non-conforming areas may be refused. Delhi, for example, needs the factory to be in a conforming industrial area, with a few exceptions.
7. Consent missing. Applying for the licence with CTO still pending leads to queries in many states.
8. Expired stability certificate. Adding floors or heavy machines without a fresh certificate.
9. Missed renewal. In Delhi's MCD licence, late penalties start after 30 April. Other states may charge a late fee too.
10. Ignoring Section 3 registration. Units below the factory limit often assume no labour filing is needed. Many still need registration as an establishment.

Fee paid on the Delhi portal is not refunded, as the Labour Department's FAQ says. So a rejected file can mean paying twice. A check before filing saves money.

The biggest change in decades came in November 2025. These are the changes we could confirm. Check your state's portal for anything newer.

1. The OSH Code replaced the Factories Act (21 November 2025)

The four Labour Codes took effect on 21 November 2025, as the Labour Ministry release of 21 November 2025 says. The release promises one registration, one licence and one return for safety and working conditions. It also says existing provisions, rules and notifications continue during the transition.

2. Factory limits doubled

The factory definition moved from 10 to 20 workers with power, and from 20 to 40 without power, under Section 2(1)(w).

3. Old rules continue until new rules arrive

The Labour Ministry FAQs on the Labour Codes say old rules stay in force until final new rules are notified under the Code. So in states without final rules, the old Factories Rules forms and fees still apply.

4. Central rules notified (May 2026)

The Occupational Safety, Health and Working Conditions (Central) Rules, 2026 were notified on 8 May 2026, as legal updates report. They set a single electronic registration on the Shram Suvidha portal for establishments where the central government is the appropriate government. Factories in the state sphere follow state rules.

5. States notified final OSH rules (2026)

By October 2026, legal updates reported final OSH rules in Andhra Pradesh, Arunachal Pradesh, Bihar, Gujarat, Jammu and Kashmir, Ladakh, Lakshadweep, Rajasthan and Uttar Pradesh. Uttar Pradesh notified its rules on 27 August 2026. Delhi, Haryana and Maharashtra were not on that list, so their old Factories Rules still apply.

6. Rest interval rule (May 2026)

Under Section 25(1)(b), the Labour Ministry notified on 13 May 2026 (S.O. 2517(E)) that no worker shall work continuously for more than five hours without a rest interval of at least 30 minutes, as reported in legal updates. It was issued by the central government, so check your state's notification for factories in the state sphere.

7. Shop Act overlap removed in some states

Haryana, Maharashtra and Karnataka were reported to exempt establishments registered under the OSH Code from separate Shops and Establishments registration. In Maharashtra and Karnataka this covers units with 10 or more workers.

8. Delhi MCD deemed licence (July 2025)

Units in notified industrial areas and DSIIDC estates no longer need a separate MCD factory licence. They pay 5% of annual property tax as the licence fee, as reported in July 2025. In September 2025 MCD was reported to link this fee to its property tax portal.

A factory licence answers one question: can you run this manufacturing unit, with these workers and this power, at this address? Your business will need other registrations too. Our business licences guide shows the full set. In short:

• Below the factory limit? You may need only Section 3 registration and a trade license from your city.
• 20 or more employees? Add PF registration.
• 10 or more employees? Add ESI registration for health cover.
• Large building or risky materials? Plan your fire NOC with the building plans.
• Small or medium unit? Get MSME (Udyam) registration for priority lending and scheme benefits. It does not replace the factory licence.
• Selling goods? Check GST registration before your first invoice.

Starting from scratch? Set up the entity first with company registration, so the licence is in the right name from day one.

TaxCaller has worked on tax and business compliance since 2018. We are based in Ghaziabad, close to the industrial areas of Ghaziabad and Noida, and serve clients online across India.

• Applicability first: we tell you whether you need a licence, only registration, or both, before you pay for anything.
• Old Act and new Code: we check whether your state is on final OSH rules or still on the old Factories Rules forms.
• Clear costs: our fee and the state fee are shown separately.
• You approve first: nothing is filed until you see it.
• Reviewed content: this page is reviewed by Abhinay Rai, Advocate.

Contact us to book your free first call. Tell us your state, workers and installed power, and we will tell you the licence you need.