ESI APPLICABILITY TO NON MANUFACTURING COMPANIES OR FACTORIES

Labour & Industrial 165 views 2 replies
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58 Points Joined March 2009

 

esi act applies only manufacturing companies or factories or specified establishments. is it correct ?

The word establishment only covers specified establishments under the act, and not any or every commercial business undertaking or private limited company .. 

 
so if a private limited company does not engage in manufacturing but only in sales and trading, will ESI act applied to that company for registration ?
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On 25 September 2024 at 15:21 Report
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27922 Points Joined May 2017
Cbic.gov.in
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On 25 September 2024 at 17:02
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Master in Accounts & high court Advocate
9045 Points Joined December 2011

The Employees' State Insurance (ESI) Act, 1948, applies to: .

1. *Manufacturing units*: Factories using power and employing 10 or more persons, and non-power using factories employing 20 or more persons.

2. *Specified establishments*: Certain establishments, such as: - Hotels - Restaurants - Cinemas - Road transport undertakings - News agencies - Educational institutions (with certain conditions)

The term "establishment" in the ESI Act specifically refers to these specified establishments and not any or every commercial business undertaking or private limited company. Applicability to Private Limited Companies If a private limited company is engaged only in sales and trading, and does not fall under the specified establishments or manufacturing units, the ESI Act may not be applicable for registration. However, it's essential to note that:

 1. *Employee count*: If the company has 10 or more employees, it may still be required to register under the ESI Act, even if it's not a manufacturing unit or specified establishment.

 2. *State-specific regulations*: Some states in India may have extended the ESI Act to cover additional establishments or classes of establishments. To confirm whether the ESI Act applies to a specific private limited company, it's recommended to: 1. Consult the ESI Act, 1948, and relevant state-specific regulations. 2. Verify the company's employee count and business activities. 3. Seek guidance from a labor law expert or a chartered accountant.

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On 09 January 2025 at 10:31


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