Factory License Registration in India — Complete 2026 Guide Under the Factories Act & New OSH Code
Every manufacturing unit in India needs a factory license before starting production. But in 2026, the rules have fundamentally changed — some states still operate under the Factories Act, 1948, while others have moved to the new OSH Code, 2020. This guide walks you through everything: applicability, documents, fees, process, timelines, and penalties — with the exact framework that applies to your state.
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Section 6 plan approval, structural stability QC, & portal submission.
What is a Factory License?
A Factory License is a mandatory legal authorization issued by the state Chief Inspector of Factories (DISH) under Section 6 of the Factories Act, 1948 (and upcoming OSH Code 2020). It certifies that your manufacturing unit meets prescribed standards of workplace safety, structural stability, health amenities, and operational compliance.
The 2026 Legal Framework — Factories Act, 1948 vs. OSH Code, 2020
This is where most consultants get it wrong in 2026. India's factory licensing law is currently in a transition phase, and the framework that applies to your factory depends entirely on your state.
The Old Framework — Factories Act, 1948
The Factories Act, 1948 (Central Act 63 of 1948) is the primary legislation governing factory licensing in India. While the Act is a central law, its administration is a State subject under Entry 22 of the Concurrent List of the Constitution. Each state frames its own Factory Rules — for example, the Maharashtra Factories Rules, 1963 or the Tamil Nadu Factories Rules, 1950 — prescribing specific forms, fees, and procedures.
Under this framework, applications are filed in Form 2 with the state's Chief Inspector of Factories, and licenses are issued for 1, 5, or 10-year validity depending on the state.
The New Framework — OSH Code, 2020
The Occupational Safety, Health and Working Conditions Code, 2020, notified by Parliament on 29 September 2020, consolidates and replaces 13 central labour laws including the Factories Act, 1948, the Mines Act 1952, and the Contract Labour Act 1970.
The four Labour Codes came into effect from 21 November 2025, but implementation is state-led. Each state must notify its own OSH Code Rules before transitioning.
Real-world example — Maharashtra:
Maharashtra has gazetted the Maharashtra Occupational Safety, Health and Working Conditions (Factories and Other Ports) Rules, 2026, spanning 335 pages. These rules replace the Maharashtra Factories Rules, 1963 — a landmark change for over 33,000 registered factories in Maharashtra. New registrations now apply electronically on the government portal in Form 1, with fees paid via e-payment only.
Which Framework Applies to Your Factory in 2026?
As of 2026, several states have notified draft or final OSH Code rules while others continue under the Factories Act, 1948. The practical implication for new factory applications is that the applicable framework depends on the state of registration and its OSH Code transition status — a factor that must be verified before drafting the application.
Here's the current status for the 9 states we serve:
| State | Current Framework (2026) | Application Form | Portal |
|---|---|---|---|
| Maharashtra | OSH Code Rules 2026 (gazetted) | Form 1 | MAITRI |
| Gujarat | Factories Act (OSH draft under review) | Form 2 | XGN Portal |
| Uttar Pradesh | Factories Act (transition pending) | Form 2 | Nivesh Mitra |
| Haryana | Factories Act (transition pending) | Form 2 | HEPC |
| Delhi | Factories Act | Form 2 | Delhi Labour Portal |
| Bihar | Factories Act | Form 2 | Single Window |
| West Bengal | Factories Act | Form 2 | Silpasathi |
| Uttarakhand | Factories Act | Form 2 | SWP Portal |
| Himachal Pradesh | Factories Act | Form 2 | HP Single Window |
Critical for existing factories:
Under the new OSH Rules, establishments already registered under the Factories Act, 1948 must apply in Form 1 electronically within 6 months of the Code coming into force. This is not automatic — a fresh application is mandatory.
If your factory was registered before 2025 in a state that has transitioned, you likely need to re-register. Most factory owners don't know this yet. We do this re-registration as a fixed-scope service.
Who Needs a Factory License? — Applicability Under Section 2(m)
Under Section 2(m) of the Factories Act, 1948, a "factory" is any premises where a manufacturing process is carried on with the aid of power and 10 or more workers are employed, or without the aid of power where 20 or more workers are employed. This includes workers currently employed or those who have worked on any day within the previous 12 months.
✓In plain terms, you need a factory license if:
- You run any manufacturing, processing, assembly, packaging, or industrial activity
- You employ 10+ workers using electricity, diesel generators, steam, gas, or any mechanical power
- OR you employ 20+ workers without any power source (purely manual manufacturing)
- Your premises meet the state's building safety and layout norms
✕You do NOT need a factory license if:
- Your unit qualifies only as a shop or commercial establishment (register under Shop & Establishment Act instead)
- You're purely a trading, warehousing, or service business without manufacturing
- Your workforce is permanently below the threshold — but note that seasonal spikes can trigger applicability retroactively
Special categories:
The OSH Code has expanded coverage to include hazardous processes regardless of worker count, and specific industries like mines, ports, plantations, and construction have their own thresholds.
Not sure if your unit qualifies?
Book a free applicability check →Documents Required for Factory License Registration
The exact document set varies by state and OSH Code notification status, but this is the master checklist we use for all applications:
Business & Ownership Documents
- PAN card of the company / proprietor / LLP
- Certificate of Incorporation / Partnership Deed / GST Certificate
- KYC of Directors / Partners / Occupier (PAN + Aadhaar + address proof)
- Board resolution appointing the Occupier and Manager (for companies)
- Nomination letter for the Occupier under Section 7 of the Factories Act
Premises & Site Documents
- Registered sale deed OR notarized lease/rent agreement
- Latest property tax receipt / land revenue record
- NOC from landlord (if rented)
- Land use conversion certificate (if converted from agricultural)
- Location map and site plan
Building & Structural Documents
- Approved building plan from the local municipal / development authority
- Site plan and building layout signed by a licensed architect or civil engineer (mandatory under Section 6)
- Certificate of Structural Stability from a chartered structural engineer
- Fire NOC from the State Fire Department (mandatory for premises above prescribed area)
- Electrical safety certificate from a licensed electrical contractor
Manufacturing & Operational Documents
- Detailed manufacturing process flowchart
- List of machinery with make, model, capacity, and installed horsepower (HP)
- Load sanction letter from the electricity board (total connected load in KW/HP)
- List of raw materials, chemicals, and finished products
- Hazardous process declaration (if applicable, under Section 2(cb))
- Effluent, emissions, and waste disposal plan
Workforce & Compliance Documents
- Estimated number of workers (permanent, contract, migrant, women, and workers under 18)
- Shift pattern and working hours declaration
- Contractor details (if using contract labour, CLRA registration required separately)
- Welfare facility plan — canteen, restrooms, drinking water, creche (if applicable)
Fee & Application Documents
- State-prescribed application form (Form 1 or Form 2)
- Fee payment challan / e-payment receipt
- Affidavit / self-declaration on prescribed format
State-Specific Document Checklist
We provide a state-specific checklist PDF during onboarding so nothing is missed. Missing even one document restarts the entire timeline.
Step-by-Step Factory License Registration Process
The process has two distinct stages that most guides confuse. Here's the actual flow.
Section 6 Approval (Pre-Construction / Pre-Setup)
Before you build or set up your factory, you must get approval for the building plan and site layout. This is called Section 6 approval under the Factories Act, and it's often skipped by first-time applicants — leading to rejection at the license stage.
- 1Step 1: Prepare site plan, building layout, and machinery layout drawings signed by a licensed architect
- 2Step 2: Submit these to the Chief Inspector of Factories along with the Section 6 application form
- 3Step 3: Departmental review of layouts against safety, ventilation, exit, and machinery norms
- 4Step 4: Site visit by the Deputy Chief Inspector or Assistant Director
- 5Step 5: Written approval issued — this is your permission to construct or install machinery
Factory License Application (Post-Setup)
Once construction is complete and machinery is installed, you apply for the actual factory license.
- 1Step 1: Register on the state's single-window portal or Labour Department portal
- 2Step 2: Fill Form 1 (OSH states) or Form 2 (Factories Act states) with complete business, worker, and machinery details
- 3Step 3: Upload all documents in the prescribed format (typically PDF, under 5 MB per file)
- 4Step 4: Pay the state application fee + additional fee based on installed HP and worker count via e-payment
- 5Step 5: Physical or virtual inspection by the Factory Inspector
- 6Step 6: Query resolution round (if any deficiencies noted)
- 7Step 7: License grant and issuance in Form 4 (or state equivalent)
Factory License Fees in India — State-Wise Breakdown
Government fees are calculated using three variables: number of workers, total installed horsepower (HP), and license validity period.
The application fee ranges from ₹500 to ₹10,000+, but total fees can go up to ₹1,00,000+ for large factories with high HP loads.
| State | Base Fee Range | HP-based Variable | Validity |
|---|---|---|---|
| Maharashtra | ₹1,000 – ₹80,000 | Slab-wise on HP | 1 year / 5 year / 10 year |
| Gujarat | ₹500 – ₹60,000 | Slab-wise on HP | 1 year / 5 year |
| Uttar Pradesh | ₹500 – ₹40,000 | Fixed slabs by workers | 1 year / 5 year |
| Haryana | ₹700 – ₹50,000 | HP + workers slabs | 1 year / 5 year |
| Delhi | ₹1,000 – ₹40,000 | HP-based | 1 year / 5 year |
| West Bengal | ₹500 – ₹35,000 | Worker-based slabs | 1 year / 5 year |
| Bihar | ₹500 – ₹25,000 | Worker + HP | 1 year |
| Uttarakhand | ₹700 – ₹30,000 | HP-based | 1 year / 5 year |
| Himachal Pradesh | ₹500 – ₹30,000 | HP + workers | 1 year / 5 year |
Important: Ancillary Costs Breakdown
These are only application fees. Ancillary costs typically include:
- Fire NOC: ₹5,000 – ₹50,000
- Pollution NOC (CTE + CTO): ₹10,000 – ₹1,00,000+ (based on Red/Orange/Green category)
- Structural stability certificate: ₹15,000 – ₹40,000
- Electrical safety certificate: ₹5,000 – ₹15,000
Ask us for a complete cost sheet during discovery — no hidden numbers halfway through the project.
Need Immediate Factory License Verification in Your State?
Avoid Section 6 layout rejections and Form 1 errors. Talk to our senior compliance expert for a 1-on-1 document and portal audit.
Validity and Renewal of Factory License
Factory licenses in India are typically issued for 1, 5, or 10 years depending on the state and the fee slab you choose. Longer validity means higher upfront fees but lower long-term renewal overhead.
Renewal Timeline & Late Fees:
Renewal must be initiated at least 60 days before expiry. Late renewals attract:
- !25% additional fee if renewed within 2 months of expiry
- !50% additional fee if renewed within 3-6 months
- !Fresh application required (with full documentation) if lapsed beyond 6 months
Amendments — Triggers requiring fresh filing:
Any change in the following requires an amendment application:
We handle renewals and amendments as a monthly retainer or per-project basis.
Penalties for Operating Without a Valid Factory License
Under Section 92 of the Factories Act, 1948, running an unlicensed factory or violating license conditions can attract:
- Fine up to ₹1,00,000, or
- Imprisonment up to 2 years, or
- Both
- Additional fine of ₹1,000 per day for continuing offence
Beyond fines, operating without a license means:
- ✕Immediate shutdown notice from the Labour Department
- ✕Sealing of premises
- ✕Disqualification from government tenders and export benefits
- ✕GST cancellation risk
- ✕Personal liability of Directors and the Occupier
Our compliance calendar system prevents every one of these situations.
Top 5 Reasons Factory License Applications Get Rejected
Based on our internal data and state department feedback:
Building plan not approved before license application
— Section 6 approval is skipped
Structural stability certificate from unauthorized professional
— must be a chartered structural engineer
Mismatched HP declaration
— between electricity load sanction and machinery list
Missing Fire NOC
— for premises above the state's prescribed area threshold
Incomplete Occupier documentation
— appointment letter, nomination, and Section 7 declaration missing
Why Choose Factory Compliance India for Your License
End-to-End Filing
From building plan approval to final license delivery, our in-house team handles everything. No sub-contracting.
OSH Code Transition Ready
We track OSH Rules notification in every state you operate in and handle both Factories Act and OSH Code applications correctly.
State Portal Expertise
MAITRI, XGN, Nivesh Mitra, HEPC, Silpasathi — we know every single-window portal's quirks and bug patterns.
Fixed-Scope Pricing
One quote, all inclusive. No mid-project surprises.
Inspector Handling
Our team accompanies site visits (where permitted) and manages all clarifications and queries directly.
Post-License Compliance Bundle
Renewals, returns, amendments, and full statutory compliance available as a retainer.
Frequently Asked Questions
Get Your Factory License Filed in 15-25 Working Days
Talk to our senior compliance expert today. We'll audit your current setup, identify the exact framework applicable to your state, and give you a fixed-scope quote and timeline — no obligation.