statutory requirement required in establishing an establishment

8/3/2019 Statutory Requirement Required in Establishing an Establishment

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By : Bhoopendra kumar sahu

Dharmvir singh choudhary



company Act 1956• Different steps before start project

The Factories act,1948•

The Employment provident fun &miscellaneous act,1952• The Employment state insuranceact, 1948.

• The Contract labour (regulation&abolition) act,1960



The industrial employment (standing order)act,1946

The Payment of bones act,1965.

The Minimum wages act, 1948.

The payment of wages act, 1936.



There are many forms in which a businesscan be organized. Usually , the followingmodels are popular:

Sole proprietorship

Partnership firm, including limited liability

Company- public or private



File an application in form no.1A with the registrar

of company of the state.

The application is signed by one of the promoterand must contain the following details -

minimum 2 alternative names for the proposed

company. Justification for the name needs to be specified

along with application.

Name of the address of the member (minimum 7

for public company and 2 for private company). Authorized capital of the company ( minimum rs5

lacs for public limited and 1 lacs for privatecompany)



After getting the name following documentsare prepared :

1. Memorandum of Association2. Articles of Association

3. Letter of authority to a person for carrying

out corrections4. Declaration by the Promoter Directors

5. Form 18 for registered office address

6. Demand Draft in favour of Registrar of

companies for the prescribed amounttowards registration fee.



On the receipt of the documents ROC willscrutinize the papers and if any modificationis required he will direct to make suchchanges accordingly.

Once ROC is satisfied and scrutiny iscompleted he will issue certificate of Incorporation. The company would come intoexistence from the date of certificate of incorporation.



Consult with different consultants. Location

Legal aspects of the site location

Water resources DPR

Financial approval

Land acquisition

Stake height clearance from AAI Approval from Water resource dept.



Clearance from MOEF. Such as TOR (Terms of Reference)

EIA ( Environment Impact Assessment).

Public hearing Consent to establishment.

Consent to operate. By state environmentconservation board.



Factory´ is defined in Section 2(m) of the Act.

Where on ten or more workersare working, or were working on any day of thepreceding twelve months, and in any part of which

a manufacturing process is being carried on withthe aid of power, or is ordinarily so carried on.

Whereon twenty or more workers are working,or were working on any day of the precedingtwelve months, and in any part of which amanufacturing process is being carried on without

the aid of power, or is ordinarily so carried on.



But does not include a mine subject to theoperation of the MinesAct,1952 or a mobileunit belonging to the Armed forces of theUnion, a railway running shed or a hotel,

restaurant or eating place.



It extends to the whole of India It shall come into force on the 1st day of

April, 1949



Washing facilities. Facilities for storing and drying clothing.

Facilities for sitting.

First-aid appliances. Canteens,

Shelters, rest rooms and lunch rooms

Creches



Cleanliness Disposal of wastes and effluents.

Ventilation and temperature.

Dust and fume. Lighting

Drinking water.

Spittoons



Section 6 of this act. Approval, licensing and registration of

factories.

Form no.4 – application for registration andgrant or renewal of licenece and notice of occupation.



Form no.1 - Application to the site appraisalcommittee.

Form .no.1A – application for approval plansand for permission to construct or take in touse any building as a factory.

Form no.2&3 – approval , license &registration of factory under factory act.



Form no 27- annual return( in every calendar year submitted to chief inspector of factory by 15 January of everyyear)

Form no 28- half yearly ( to be sent for theperiod jan- june to chief inspector by 15th of

july)



Form no.4 – application for registration andgrant or renewal of licenece and notice of occupation.

Form no.4A – factory manger( change )

Form no.22 – notice of accidents ( to chief inspector)



APPLICABILITY:

• EVERY ESTABLISHMENT WHICH IS A FACTORYENGAGED IN ANY INDUSTRY SPECIFIED IN SCHEDULE1 AND IN WHICH 20 OR MORE PERSON ARE

EMPLOYED.

• ANY OTHER ESTABLISHMENT EMPLOYING 20 ORMORE PERSONS WHICH CENTRAL GOVERNMENT MAYBY NOTIFICATION, SPECIFY IN THIS BEHALF.

• ANY ESTABLISHMENT EMPLOYING EVEN LESS THAN20 PERSONS CAN BE COVERED VOLUNATARILYUNDER SECTION 1 (4) OF THE ACT.



ELIGIBILITYANY PERSON WHO IS EMPLOYED FOR WORK

OF AN ESTABLISHMENT OR EMPLOYEDTHROUGH CONTRACTOR IN OR INCONNECTION WITH THE WORK OF ANESTABLISHMENT.



• EMPLOYEES COVERED ENJOY A BENEFIT OF SOCIAL

SECURITY IN THE FORM OF AN ATTACHABLE ANDUNWITHDRAWABLE (EXCEPT I SEVERLY RESTRICTEDCIRCUMSTANCES LIKE BUYING HOUSE, MARRIAGE,

EDUCATION etc.). FINANCIAL NEST EGG TO WHICHEMPLOYEES AND EMPLOYERS CONTRIBUTE EQUALLYTHROUGHOUT THE COVERED PERSONSEMPLOYMENT.

• THIS SUM IS PAYBLE NORMALLY ON RETIREMENT ORDEATH. OTHER BENEFITS INCLUDE EMPLOYEESPENSION SCHEME AND EMPLOYEES DEPOSITE LINKEDINSURANCE SCHEME.



Empoyer contribution EPF EMPLOYERS - 12% + EPF ADMIN

CHARGES 1.10% + EDLI 0.50 % + EDLI ADMINCHARGES 0.01% = 13.6%

EMPLOYEES contribution:

EPS - 8.33 %, EPF – 3.67%

total = 12%



1.COMBINED CHALLAN A/C – 1,2,10,21 & 222.12 A (Employees Strength and paid)

3.Form 5 - New Joining (Name, Father’s Name,DOJ, DOB, Gender.

4.Form 10 – Left Employees (Name, Father’sName, DOJ, DOL, Reason.



• Note : Above all contribution count onEmployees Basic Earnings. THE ABOVECLARIFICATION IS GIVEN BY TAKING WAGESUPTO A MAXIMUM OF Rs.6500 TOWARDS WAGE(BASIC+DA).

• Nomination : Form – 2 (Revised)

•

Nominee Change : Form – 8

• For Withdrawal : Form 19 & 10 c



3 A : Employees individual detail month wise(Period 1st April to 31st March)

6 A : All Employees combined detailmonthwise



ApplicabilityThe ESI Act, 1948 in the first instance, applies

to:

Factories using power in the manufacturingprocess and employing 10 or more persons

Non-power using factories or establishmentsemploying 20 or more persons for wages.



ESI scheme is financed by contribution raisedfrom employees covered under this schemeand their employers as a fixed percentage of wages. Rates of contribution are as follows:

• Employees contribution 1.75% of wages (Employees earning up to Rs. 50 per day areexempted from payment of their contribu-tion)

• Employer’s contribution 4.75% of wages.



Wage Ceiling Employees of covered units and estab-

lishments drawing wages upto Rs. 15,000 permonth come under the purview of the ESI Act

1948.



• Various benefits that the insured employeesand their dependents are entitled to are asfollows

• Medical Benefits

• Sickness Benefits

• Maternity Benefits

• Disablement Benefits

• Dependent Benefits• Other Benefits



An employer shall apply in Form-01 forcoverage under the ESI Act, within 15 daysafter the Act becomes applicable to a factoryor establishment.

The employer shall deposit both employees’and employers’ contribution as per specifiedrates within 21 days of the following month.



• The Employer shall maintain all such recordsand registers as are required under the Actand produce them for verification /inspection before the authorised officers of

the Corporation.• The employer shall submit half-yearly Return

of Contributions (RC) by12th May/11th November every year with allcolumns properly filled.



Form no.01 – employer registration form. Form no.1- declaration form ( employee)

Form no.- 12- accident form



Monthly return – challan ( on before 21st of every month).

Form no.5 – half yearly return ( contributionstatement of the members within 30 days of

contribution period.



Object of the act: To regulate the employment of Contract

Labour in certain establishments and toprovide for its abolition in certain

circumstances and for matters connected.,

The main objective of this act is to regulatethe contract labour and abolish it in certaincases



Every industry engaging 20 or more workerson contract basis.

Every contractor engaging 20 or moreworkers.



Apply in form I for registration in triplicatecopy along with prescribed fees.

Apply in form IV for license in triplicate copy

along with license & security fees.

For license form V is given by Principalemployer to contractor.



The licence granted is subject to suchconditions as to hours of work, fixation of wages and other essential amenities inrespect of contract labour as laid down in the

rules.



For work of immediate nature Principalemployer/ Contractor can apply fortemporary registration/ license which is validup to 15 days only.



Register of contractors Form XII

Annual return FormXXV (on or before 15th Feb)

Notice of Commencement/ Form VI BCompletion



Canteen Section 16 Rest rooms Section 17 Urinals, Latrines

Drinking Facilities Section 18 First Aid Facilities Section 19

Principal employer will have to provide thesefacilities if not provided by contractor



Object of the Act:• To require employers to define the

conditions of work.• To brig about uniformity in terms and

conditions of employment• To minimise industrial conflicts.• To foster harmonious relations between

employers and employees.• To provide statutory sanctity and importance

to standing orders



• Extends to the whole of India• To every establishment wherein 100 or more

workmen are employed• On any day preceding twelve months• Once applicable to the establishment then it

continuous if the no. of workmen employedgets reduced to less than 100

• The appropriate Govt. can exempt any

establishment from any of the provisions of the Act



Standing Orders• The term ‘Standing Orders’ means rules

relating to matters set out in the Schedule of

the Act.



• Classification of the workmen : temporary,casual, apprentices• Manner of intimating to workmen• Shift working• Attendance and late coming•

Conditions of, procedure in applying for, and theauthority which may grant leave and holidays• Requirements to enter premises by certain gates

and liability to search• Closing and reopening of sections of the

establishments, temporary stoppages• Suspension or dismissal for misconduct• Acts and omissions which constitute misconduct



• Obligatory on the part of an employer or agroup of employers to furnish 5 copies of thedraft standing orders

• Within 6 months of the application of the Actthe employer shall submit the draft standing

orders• Copies to be given to the certifying officer• Draft has to enclose the prescribed

particulars of the workmen• The status and name of the trade unions to

be given.• It has to take all matters set out in the

Schedule.



• Copy of draft standing orders to be sent totrade union/workmen• Opportunity of hearing to trade

union/workmen to be provided• Certification• Certified standing orders have the force of law and the violation of any provision shall

be taken action• Standing orders to be applicable to all

present and future workmen• Standing orders must confirm the model

standing order



On the expiry of 30 days of the certificationgiven by certifying officer

OrAfter the expiry of 7 days of the decision given

by appellate authority.



Any employer fails to submit draft standingorders or modifies it, shall be punishable withfine which may extend to Rs. 5000.

In case of continuance of the above offence,

fine up to Rs.200 per every day. Any contravention of Standing Orders is

punishable by Rs. 100 fine



eligilibility: -Every employee shall be entitled to be paid

by his employer in an accounting year, bonus,in accordance with the provisions of this Act,

provided he has worked in the establishmentfor not less than thirty working days in thatyear.



Minimum 8.33% or Rs. 3500 which ever isless

Maximum 20%

wages (Basic & DA) up to 10000/=p.m. orBelow employees get bonus as per the act.



Within eight (8) months of the next financialyear (Before Nov).



- An employee shall be disqualified fromreceiving bonus under this Act, if he isdismissed from service for-

(a)Fraud

(b)Riotous or violent behaviour while on thepremises of the establishment.

(c)Theft, misappropriation or sabotage of anyproperty of the establishment.



"wages" means all remuneration, capable of being expressed in terms of money, whichwould, if the terms of the contract of employment, express or implied, were

fulfilled, be payable to a person employed inrespect of his employment or of work done insuch employment



(a) a minimum rate of wages for time work(hereinafter referred to as "a minimum timerate");

(b) a minimum rate of wages for piece work(hereinafter referred to as "a minimum piece

rate"); (c) a minimum rate of remuneration to apply in

the case of employees employed on piece workfor the purpose of securing to such employees a

minimum rate of wages on a time work basis(hereinafter referred to as "a guaranteed timerate");



(c) a minimum rate of remuneration to applyin the case of employees employed on piecework for the purpose of securing to suchemployees a minimum rate of wages on a

time work basis (hereinafter referred to as "aguaranteed time rate")



(1) The appropriate Government shall, in themanner hereinafter provided,-

(a) fix the minimum rates of wages payable toemployees employed in an employment

specified in Part I or Part II of the Schedule and in an

employment added to either Part bynotification under section 27:



In respect of employees employed in anemployment specified in Part II of theSchedule, instead of fixing minimum rates of wages under this clause for the whole State,

fix such rates for a part of the State or for anyspecified class or classes of such employmentin the whole State or part thereof.



(A) different minimum rates of wages may befixed for-

(i) different scheduled employments;

(ii) different classes of work in the same

scheduled employment;

(iii) adults, adolescents, children andapprentices;

(iv) different localities



(b) minimum rates of wages may be fixed byany one or more of the following wageperiods, namely:-

(i) by the hour,

(ii) by the day,

(iii) by the month,



The Act contains list of all theseemployments for which minimum wages areto be fixed by the appropriate Governments.

There are two parts of the Schedule. Part I has

non-agricultural employments whereas Part-II relates to employment in agriculture.



Appropriate Government to fix the minimumrates of wages in the scheduledemployments.

Revise the Minimum rates at an appropriateinterval not exceeding five years.

Minimum Wages Act, 1948, two methodshave been provided for fixation/revision of minimum wages. They are Committeemethod and Notification method.



Under this method, committees and sub-committees are set up by the appropriateGovernments to hold enquiries and makerecommendations with regard to fixation and

revision of minimum wages,



In this method, Government proposals arepublished in the Official Gazette forinformation of the persons likely to beaffected thereby and specify a date not less

than two months from the date of thenotification on which the proposals will betaken into consideration.



Current minimum wages:

Skilled: Rs.196.07

Semiskilled: Rs.187.07

Unskilled: Rs.179.07

statutory requirement required in establishing an establishment

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