In this editorial author shall discuss about the process for applying dormant status “Newly Incorporated Company with AGILE” with ESI Act.
Applicability of ESIC:
The ESI scheme is applicable to all factories and other establishments as defined in the Act with 10 or more persons employed in such establishment. The threshold for coverage of establishment is 20 employees in Maharastra.
The scheme under the act also supports restaurants, motor road transports, newspaper establishments and undertakings, movies and purview theatres, hotels, shops.
Company Law Provisions:
If any new company getting incorporated on MCA Portal (OPC, Private or Public) such company needs to file web form AGILE PRO. In AGILE PRO company have to mandatory apply for ESIC registration.
Therefore, Every Company getting incorporate in India shall be allotted ESIC registration no. from the date of incorporation irrespective of no. of employees in the Company.
Practically the new incorporated Companies will have to comply with the provisions of ESI Act, 1948 when they reach the threshold limit of employment under the ESI Act.
Latest Clarification by ESIC:
- In case, the companies registered through the MCA portal are found not coverable as per the statutory provisions of the ESI Act, they need not to make compliance
- For the next 6 months OR
- Till they reach the threshold ESIC coverage
DORMANT STATUS:
- If Company doesn’t reach the threshold in 6 months, it has to login on the ESIC website to further extend the ‘Dormant’ mode. In one go maximum period it can choose is 6 months.
- In case, it does not extend the same, the registration will automatically activate, and the company has to start compliances under the ESIC Act.
- Before expiry of 180 days from the application of dormant status, Company has to login on the ESIC website to further extend the ‘dormant’ mode.
Steps for Applying Dormant Status:
1- Go to esic.gov.in and click on Employer Login:
2-Login to ESic Portal:
3-Tab open for selecting whether company wishes to opt for Dormant Status:
4-when you opted for No in the first option that provision of ESI Act, 148 are not applicable on the company with immediate effect and system ask you to mention grace period till that period dormant status remain valid:
CONCLUSION:
After reading of the Circular of ESIC one can opine that it is mandatory for every company incorporated by AGILE PRO to comply with the compliances of ESIC Act until unless company has applied for Dormant Status of the same every 6 month.
Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
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