The Employee State Insurance (ESI) scheme in India is a comprehensive welfare program for employees engaged in the organised sector. Introduced by the government in 1952, its primary goal is to offer socio-economic protection to employees when they face adversity, particularly in terms of health and financial challenges.
In addition to extending financial support, the ESI scheme extends medical insurance coverage to employees enrolled in the program. Notably, this insurance also covers the employees’ families. The major portion of the scheme’s funding is derived from contributions made by both the employees and their employers within the company. In this blog, we shall see the documents required for ESI registration in India.
What are the Essential Documents Required for ESI Registration in India?
ESI registration is a crucial process for employers to ensure the well-being of their employees. To initiate this process, documents required for ESI registration in India include:
1. Registration Certificates under Applicable Acts
One of the important documents required for ESI registration in India is the registration certificate issued under the Shops & Establishment Act or Factories Act.
In the case of an LLP, company, or partnership, the relevant registration certification and partnership deed must be furnished.
Article of association and Memorandum of association should also be provided.
2. Employee Details
Another one of the important documents required for ESI registration in India is a comprehensive list of all active employees working within the organisation. This list should include:
- Name
- Guardian’s name
- Contact number
- Date of Birth (DOB)
- Date of appointment
- Salary details
- Address
- Nominee’s details
- Job position
- Identification proof (e.g., Aadhaar or PAN)
- Bank account number
3. Employees Register
A record of employee attendance, duly maintained.
4. Company PAN Card
Copy of the Permanent Account Number card of the company.
5. GST Registration
A scanned copy of the Goods and Services Tax (GST) registration licence also forms part of the documents required for ESI registration in India.
6. Banking Information
A cancelled cheque from the company’s bank account.
7. Digital Signature
Digital signatures of the relevant partner, director, or proprietor, as applicable to the organisation’s structure.
8. Director Information
A list of all active directors currently working within the company.
9. Shareholder Information
Details of existing shareholders is another important one of the documents required for ESI registration in India.
10. Address Proof
Address proof for core members, such as partners and directors.
11. Contact Information
Contact numbers and email addresses of the partner, or directors of the organisation.
Article of Association and Memorandum of Association
Article of Association and Memorandum of Association are fundamental statutory documents required for ESI registration in India. These documents provide comprehensive information about the company’s rules, objectives, and operational scope. Understanding the significance of these documents required for ESI registration in India is crucial, as they are essential for obtaining an incorporation certificate from the Ministry of Corporate Affairs and play a pivotal role in securing various government licenses and registrations.
Memorandum of Association
The MoA is one of the important documents required for ESI registration in India and it primarily outlines the fundamental data of the company, including its objectives and essential details. It serves as the foundational document that enables the company to obtain an incorporation certificate from the MCA. The MoA typically includes:
1. Objective and Purpose: Clearly defines the company’s objectives and the scope of its operations.
2. Registered Office: Specifies the registered office address, which is a crucial piece of information for legal identification.
3. Authorised Capital: States the maximum amount of capital the company can raise through the issuance of shares.
4. Name Clause: Contains the company’s official name, ensuring uniqueness and compliance with regulations.
Articles of Association
The AoA is yet another one of documents required for ESI registration in India and it focuses on the internal affairs and governance of the company and lays out a set of rules and regulations for the company’s internal operations. Key aspects covered in the AoA include:
1. Management Structure: Defines the roles, and powers of directors, and officers within the company.
2. Shareholders’ Rights: Outlines the rights and privileges of shareholders.
3. Dividend Distribution: Sets forth guidelines for the distribution of profits to shareholders.
4. Borrowing Powers: Limits and conditions for the company to borrow funds.
5. Amendment Procedures: Describes the process for making changes to the AoA, ensuring transparency and legal compliance.
Both the Memorandum of Association and the Articles of Association are indispensable documents required for ESI registration in India. The MoA defines the company’s fundamental objectives and details, while the AoA establishes the internal rules and regulations governing its operations.
Factory Registration in India under the Factories Act 1948
Factory Registration in India is a crucial legal requirement overseen by the provisions outlined in the Factories Act of 1948. This act is dedicated to ensuring the well-being of employees within workplace environments. It establishes a comprehensive framework for regulating the working conditions within companies and factories. The Factories Act addresses a range of vital issues, including safety, health, and the overall efficiency of individuals engaged in providing services within the workplace.
Key Highlights of the Factories Act 1948:
1. Welfare of Employees: The primary objective of the Factories Act is to safeguard the welfare of employees by imposing specific obligations on employers to maintain a safe and healthy working environment.
2. Working Conditions: It sets stringent stipulations governing working hours, rest intervals, and overtime provisions to protect workers from exploitation.
3. Safety Measures: The Act mandates the implementation of safety measures to prevent accidents and ensure the overall well-bein. Inspectors:g of workers.
4. Health Provisions: It outlines guidelines for maintaining hygiene, sanitation, and medical facilities within the workplace to protect the health of employees.
5. Regulation of Hazardous Processes: The Factories Act regulates activities involving hazardous processes to minimise risks to workers and the surrounding environment.
6. Child and Female Labour: It places restrictions on the employment of children and regulates the employment of female workers to ensure their safety and welfare.
7. Annual Factory Registration: Under the Act, factories are required to register annually, providing details about their operations and compliance with statutory requirements.
8 The Act empowers government-appointed inspectors to assess and enforce compliance with its provisions.
Entities Eligible for ESI Registration
Employee State Insurance (ESI) registration is a mandatory requirement in India aimed at providing social security benefits to employees. Along with the documents required for ESI registration in India, various entities are required to seek ESI registration to ensure the well-being of their employees. The entities that should apply for ESI registration include, among others:
1. Shops: Any establishment categorised as a shop, which typically involves retail trade or the sale of goods, is eligible for ESI registration.
2. Hotels or Restaurants Engaged in Manufacturing and Sales: Hotels or restaurants involved in both manufacturing and sales activities fall under the purview of ESI registration. This includes hotels and restaurants that produce their own food products for sale.
3. Cinemas and Road Transport Companies: Cinemas, as well as road transport companies, are obligated to obtain ESI registration to provide social security benefits to their employees.
4. Medical Institutions: Medical institutions such as private hospitals, pathological labs, and nursing homes must register under ESI to offer social security coverage to their healthcare professionals and support staff.
ESI Scheme Eligibility Criteria (Wage Limit)
The Employee State Insurance (ESI) Scheme in India extends health benefits to eligible employees. To determine eligibility, the following wage-related criteria apply:
1. Monthly Salary Limit: Employees whose monthly salary does not exceed Rs 21,000 are eligible for the ESI Scheme. In simpler terms, employees working in establishments with more than ten individuals, whose monthly salary is up to Rs 21,000, qualify for health benefits provided by the ESI Act. For eligible employees within this wage range, a fixed percentage of their wages is deducted monthly as a contribution towards the ESI Scheme.
2. Exemption from Employee Contributions: Some employees are not required to contribute to the ESI Scheme from their wages paid by the employer. This category includes workers whose daily wage does not exceed Rs 137.
Procedure for ESI Registration in India for Employers
After fulfilling the documents required for ESI registration in India, one can move on to the process of registration. The procedure for ESI registration in India from employers’ perspective is as follows:
1. Access the ESI Official Website:
Go to the official Employee State Insurance website.
2. Select ‘Sign-Up’:
On the website’s homepage, click on the ‘Sign-Up’ or ‘Register’ option.
3. Fill in the Required Information:
Fill in the following details:
- Company Name
- Principal Employer Name
- State
- Region
- Email Address
- Contact Number
4. Checkbox and Submit:
After filling in the required information, check the acknowledgment box to confirm your agreement with the terms and conditions. Finally, click on the ‘Submit’ button to proceed.
5. Confirmation Email:
The portal will send a confirmation email to the registered mobile number and email address of the applicant. This confirmation email will contain important details, including your username and password.
6. Access Your Account:
Use the provided username and password to access your ESI account. You can now complete the registration process, submit required documents, and manage your ESI contributions online.
Final Thoughts
The Employee State Insurance Scheme in India is a vital social security program aimed at safeguarding the welfare of employees. This scheme provides access to essential healthcare and financial benefits for eligible workers and their families. ESI registration is mandatory for employers in specified sectors, and the eligibility criteria are based on monthly salary limits.
The documents required for ESI registration in India and the online registration process, as outlined, streamlines the onboarding of employers into the scheme. ESI plays a crucial role in promoting a healthier and more secure work environment, ensuring that employees receive necessary medical care and financial support during challenging times.
