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PF/ESI Registration

Starting a new company in India can be an exciting and challenging experience. It involves a lot of planning, preparation and compliance with various government regulations. One such important compliance requirement is the compulsory registration EPF / ESI for new company with effect from February 23, 2020, mandatory EPF/ESI registration for companies/organizations is required at the time of incorporation when a company has 20 or more employees. A company that reaches the minimum barrier of 20 employees must register within one month of reaching that level. Failure to comply with this requirement can result in legal penalties and fines. The registration process helps to ensure legal compliance, improve employee benefits, reduce tax liability, and improve record keeping. By registering for EPF/ESI, new companies can take a step towards ensuring the financial security and well-being of their employees.

The provident fund is a major fund collection scheme by the government of India to support and assist the working class in their future needs. The government also provides higher interest rates in return to maintain the funds in the government treasury and give individuals a higher sense of security. Here in this post, we will be looking at some of the processes related to the Employee’s PF and ESI registrations.

Eligibility

Who is eligible to obtain ESI registration in India?

To be eligible for ESI registration is to have more than 10 workers. In some regions, ESI registration is possible for establishments only if there are more than 20 employees. Here are some other criteria that need to be satisfied for obtaining ESI registration.

1. An employee whose gross salary is up to Rs. 21,000 per month can avail of this with the help of the employer.

2. The establishment is registered with the EPFO.

3. The total contribution to ESI is 6.5% of the gross salary and it can be further divided as:

4. 4.75% by the employer

5. 1.75% of the employee

6. For industrial units where there are chances of occurrence of injury or health issues all the employees with a salary less than Rs.21,000 compulsorily need to get ESI registration.

Documents required for obtaining ESI registration

For obtaining ESI registration in India here is the list of documents that is to be submitted by the employer along with the application:

1. Registration Certificate of the Shops and Establishment Acts.

2. Factories Act

3. Address proof of Principal place of business

4. Copy of PAN Card

5. Bank statement (Latest)

6. Memorandum and Articles of Association or the partnership deed or trust deed depending on the nature / constitution of the entity.

7. Certificate of Commencement registration no

8. The monthly pay sheet is also required for computing the contribution amount for each employee for ESI filings.

Benefits of PF and ESI Registration:

PF and ESI registration provide numerous benefits to both employers and employees. Some of the benefits are:

1. Retirement Benefits: PF provides a lump sum amount to employees on retirement, which can be used to support their post-retirement lives. ESI provides medical benefits to employees and their dependents, which can help in times of medical emergencies.

2. Employee Security: PF and ESI registration ensure the financial security of employees. In cases of sickness, maternity, or employment injury, employees can claim benefits from the ESI.

3. Tax Benefits: Both PF and ESI contributions are eligible for tax deductions under the Income Tax Act, of 1961. Employers can claim deductions on their contributions, and employees can claim deductions on their contributions and interest earned.

4. Legal Compliance: PF and ESI registration are mandatory for establishments employing a certain number of persons. Non-compliance can result in penalties and legal action.

5. Improved Employee Retention: Providing PF and ESI benefits to employees can improve their job satisfaction and retention. It can also help in attracting new talent to the organization.

Process of Registration of PF/ESI

PF Registration:

The PF registration process is mandatory for all establishments employing 20 or more people. The registration is done through the Employees’ Provident Fund Organization (EPFO). The process of registration is as follows:

Step 1: Visit the EPFO portal and select the “Establishment Registration” option.

Step 2: Fill in the required details, such as the name of the establishment, address, type of establishment, and contact details.

Step 3: Upload the necessary documents, such as the PAN card, address proof, and bank account details.

Step 4: Once the application is submitted, the EPFO will verify the details and issue a PF registration number.

ESI Registration:

The ESI registration process is mandatory for all establishments employing 10 or more people. The registration is done through the Employees’ State Insurance Corporation (ESIC). The process of registration is as follows:

Step 1: Visit the ESIC portal and select the “New Employer Registration” option.

Step 2: Fill in the required details, such as the name of the establishment, address, type of establishment, and contact details.

Step 3: Upload the necessary documents, such as the PAN card, address proof, and bank account details.

Step 4: Once the application is submitted, the ESIC will verify the details and issue an ESI registration number.

Conclusion:

PF and ESI registration are essential for all establishments employing a certain number of people. The registration process is simple and can be done online through the EPFO and ESIC portals. The benefits of registration include retirement benefits, employee security, tax benefits, legal compliance, and improved employee retention. The Startup Trends can help startups and small businesses in India with PF ESI registration and other legal compliance. Registering for PF and ESI can provide numerous benefits to employees and help build a strong and secure workforce.

The Startup Trends is a leading consulting firm that specializes in providing legal, financial, and business-related services to startups and small businesses in India. Our team of experts can assist startups and small businesses in registering for PF and ESI and ensuring that all legal compliance are met.

PF/ESI Registration

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