Get Factory License explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Factory License is one of the most common registrations Indian businesses ask us about. This complete guide covers what it is, who needs it, the documents, the exact process, fees, validity and the penalties for non-compliance — everything in one place.
What is Factory License?
Factory License is granted by the Directorate/Chief Inspector of Factories of the State (Department of Labour) under the Factories Act, 1948. It is the legal authorisation that lets an eligible person or business operate in compliance with the applicable rules.
Who needs Factory License?
- Any premises with 10+ workers using power, or 20+ workers without power, engaged in manufacturing
- Manufacturers required to register before commencing operations
- Existing factories renewing or amending their licence
Benefits of Factory License
- Legal authorisation to operate a manufacturing unit
- Ensures worker safety, health and welfare compliance
- Prerequisite for other approvals and tenders
- Avoids prosecution for running an unlicensed factory
Documents required
- Application in the prescribed Form (Form 1/2/4 as per state)
- Building plan approval and factory layout drawing
- Details of manufacturing process and machinery
- List of directors/partners/occupier and manager
- Proof of ownership/tenancy of the premises
- Stability certificate for the factory building
- Details of number of workers and installed power (HP)
Factory License process — step by step
- Get building plans approved — Obtain approval of the factory building plan and layout from the Chief Inspector of Factories.
- File the licence application — Submit the prescribed form with occupier and manager details.
- Upload documents & pay fee — Attach plans, stability certificate and machinery list; pay the fee based on workers/HP.
- Inspection — A Factory Inspector inspects safety, sanitation and building compliance.
- Resolve observations — Address any deficiencies noted during inspection.
- Grant of licence — The licence to run the factory is issued with registration of the occupier.
Fees, timeline and validity
| Particular | Details |
|---|---|
| Government fee | Fees are prescribed by each State on the basis of the number of workers and installed horsepower — commonly ₹1,500 to ₹30,000+ depending on scale. |
| Professional fee (typical) | ₹8,000 – ₹30,000 (professional fee, higher for plan approval and larger units) |
| Processing time | Typically 30–60 days including building/plan approval and inspection. |
| Validity | Usually valid for 1 year (renewable) or up to 5–10 years in some states depending on the fee paid. |
Penalty for non-compliance
Operating without a factory licence can attract imprisonment and fines under the Factories Act, and the occupier and manager may be held personally liable.
Related guides on Factory License
- Documents Required for Factory License
- Factory License Eligibility Criteria
- Factory License Fees & Government Charges
- Factory License Process Step by Step
- Benefits of Factory License
- Factory License Renewal: Process and Validity
- How to Cancel or Surrender Factory License
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Talk to an expert →Frequently Asked Questions
What is Factory License and who issues it?
Factory License is issued by the Directorate/Chief Inspector of Factories of the State (Department of Labour) under the Factories Act, 1948. Any premises with 10+ workers using power, or 20+ workers without power, engaged in manufacturing.
What documents are required for Factory License?
Key documents include: Application in the prescribed Form (Form 1/2/4 as per state); Building plan approval and factory layout drawing; Details of manufacturing process and machinery; List of directors/partners/occupier and manager.
What are the fees for Factory License?
Fees are prescribed by each State on the basis of the number of workers and installed horsepower — commonly ₹1,500 to ₹30,000+ depending on scale. Professional assistance typically costs ₹8,000 – ₹30,000 (professional fee, higher for plan approval and larger units).
How long does Factory License take and how long is it valid?
Typically 30–60 days including building/plan approval and inspection. Usually valid for 1 year (renewable) or up to 5–10 years in some states depending on the fee paid.
What happens if I don't get Factory License?
Operating without a factory licence can attract imprisonment and fines under the Factories Act, and the occupier and manager may be held personally liable.