Applicability of ESIC On Companies

DIVESH GOYAL Mob: +918130757966
Practicing Company Secretary csdiveshgoyal@gmail.com

GOYAL DIVESH& ASSOCIATES
Editorial 810
Applicability of ESIC
Compliance on New Companies
Date: 29.12.2022
SHORT SUMMARY:
In this editorial author shall discuss about the compliance to de done by every
“Newly Incorporated Company with AGILE” with ESI Act. Many questions
asked by Companies and Professional in respect of ESIC Compliances like:
1. Whether every New company is required to comply with

compliances of ESI Act in relation to ESIC?
2. Even if the employee is below the limit of ESI Act. Whether
Companies required to comply with ESIC Compliances?
What is ESI and ESIC:
ESI stands for Employee State Insurance managed by the Employee State
Insurance Corporation (ESIC) which is an autonomous body created by the law
under the Ministry of Labour and Employment, Government of India.
The ESI scheme was started for Indian workers. The workers are provided with
a huge variety of medical, monetary and other benefits under the ESI Act from
the contributions made by both the employer and employee towards the ESI
Scheme.
1 #Bornforcs #Proudcs
Consistently working for Profession Since Decade
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. irrespective of no. of employees in the Company.
Therefore, every company incorporated in India having ESIC registration no

from the date of Incorporation.
QUESTION:
Now the question arise that ESIC compliances are applicable on the Company
when its crossed the threshold limit of minimum 10 employees. If the Company
having less than 10 employees. Whether such company need to comply with
the regular returns/ compliances of ESI Act?
As per the latest circular issued by the ESIC they have mentioned that:
❖ W.e.f. 15th February, 2022 ESIC has stopped the Registration of New
OPC, Private and Public Company on Shram Suvidha Portal of ESIC.
❖ W.e.f. 15th February, 2022 New Companies shall get the ESIC
registration through AGILE PRO form along with Incorporation of
Company.
Note: 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:
I. 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
Whichever is earlier.
DORMANT STATUS:
II. If Company doesn’t reach the threshold in 6 months, it has to login on the
ESIC website to further extend the ‘Dormant’ mode.
III. In case, it does not extend the same, the registration will automatically activate
and the company has to start compliances under the ESIC Act.
IV. If it is not followed by the respective employers, necessary actions under the
existing provisions of ESI Act may be taken against the defaulting units.
ACTION TO BE TAKEN BY NEWLY INCORPORATED COMPANIES:
1. Initially the status of registration shall be activate. Company have to start compliance
with ESI Act within 6 months of Incorporation.
2. Within 6 months Company can make registration number dormant by logging in the
system in case they are not immidiately coverable under ESI act to avoid defaulter
action.
** In one go maximum period it ca choose is 6 month.
3. 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.
Screenshot of the Screen:
The screen which will appear at the time of initial login, employer have to tick
appropriate box option 1 will appear only on the first login. In the below case the date
will be editable and employer can extend the dormant status of the filing of registration.
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).
Disclaimer: The entire contents of this document have been prepared based on relevant
provisions and as per the information existing at the time of the preparation. Although
care has been taken to ensure the accuracy, completeness, and reliability of the
information provided, I assume no responsibility, therefore. Users of this information
are expected to refer to the relevant existing provisions of applicable Laws. The user of
the information agrees that the information is not professional advice and is subject to
change without notice. I assume no responsibility for the consequences of the use of
such information.
IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,

SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR
IN CONNECTION WITH THE USE OF THE INFORMATION

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DIVESH GOYAL Mob: +918130757966

Practicing Company Secretary csdiveshgoyal@gmail.com

1. Whether every New company is required to comply with

What is ESI and ESIC:

The ESI scheme is applicable to all factories and other establishments as

Company Law Provisions:

If any new company getting incorporated on MCA Portal (OPC, Private or

Therefore, Every Company getting incorporate in India shall be allotted ESIC

Therefore, every company incorporated in India having ESIC registration no

Latest Clarification by ESIC:

Screenshot of the Screen:

Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in

IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT,

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