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Manufacturing under shops and establishment act?

Rajendra (CA) (46 Points)

08 January 2025

Under which act should a manufacturing company with less than 5 employees register Shops and establishment act or factories act?

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Rama chary Rachakonda (Master in Accounts & high court Advocate) (8423 Points)
Replied 09 January 2025

In India, the registration requirements for a manufacturing company depend on the number of employees and the type of manufacturing activity.

Shops and Establishment Act The Shops and Establishment Act applies to shops, commercial establishments, and small manufacturing units with less than 10 employees.

If your manufacturing company has: - Less than 5 employees - A small manufacturing unit - Primarily an administrative or office-based setup Then, registration under the Shops and Establishment Act might be applicable.

Factories Act The Factories Act applies to manufacturing units with: - 10 or more workers (with power) or 20 or more workers (without power)

- A manufacturing process that involves hazardous activities or uses heavy machinery If your manufacturing company has: - 5 or more employees (although this is not the sole criterion) -

A manufacturing process that involves hazardous activities or uses heavy machinery Then, registration under the Factories Act might be applicable. Determining the Appropriate Act To determine which act is applicable, consider the following factors:

1. Number of employees: If you have less than 10 employees, the Shops and Establishment Act might apply. If you have 10 or more employees, the Factories Act might apply.

2. Type of manufacturing activity: If your manufacturing process involves hazardous activities or uses heavy machinery, the Factories Act might apply.

3. State-specific regulations: Some states in India have their own shops and establishment acts or factories acts, which may

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