Get clear answers to frequently asked questions about proprietorship setup, benefits, legal formalities, and compliance—so you can start your business in India with clarity and confidence.
India Company Setup offers expert support for two of the most critical labor law compliances in India — Provident Fund (PF) Registration and Employee State Insurance (ESI) Registration. These processes ensure businesses provide their employees with social security, retirement benefits, and medical coverage as mandated under Indian law.
Provident Fund (PF) registration is the formal process through which an employer registers with the Employees’ Provident Fund Organisation (EPFO). By doing so, the establishment becomes part of the Employees’ Provident Fund (EPF) Scheme — a retirement benefits program that helps employees accumulate a financial corpus for post-retirement life, health-related exigencies, or other personal emergencies.
The Employees’ Provident Fund Scheme is a government-backed initiative aimed at building a long-term savings buffer for salaried workers. Both the employer and employee contribute equally toward this fund every month, ensuring that the employee builds a retirement corpus steadily.
Businesses in India are required to obtain EPF registration once they meet particular employee count thresholds or specific regulatory criteria. Below are the key circumstances when EPFO registration becomes mandatory:
EPF Withdrawals Are Permitted Under These Conditions:
Retirement at 58 years of age.
Unemployment for more than two months.
Medical emergencies or life-altering situations, subject to EPFO approval.
In case of an employee’s death, the corpus is disbursed to their nominated family members.
Employers must register for PF under the following circumstances:
Mandatory Registration: Businesses employing 20 or more individuals (including permanent, contractual, or temporary staff) must register with EPFO.
Voluntary Registration: Companies with fewer than 20 employees can also choose to register voluntarily. This is often done to offer additional employee welfare and improve retention.
Registration Timeline:
Employers must complete the registration process within one month of reaching the 20-employee mark. Non-compliance may lead to penalties.
Special Provisions:
The government may mandate PF registration for businesses with fewer than 20 employees with a minimum two months’ notice.
If the majority of employees and the employer mutually agree, the company can opt into the PF scheme regardless of its employee count.
Employers are responsible for enrolling employees in the PF scheme from the very first day of employment.
Employee Share: 12% of basic salary.
Employer Share: 12% of basic salary, of which 3.67% goes to EPF and 8.33% to the Employees’ Pension Scheme (EPS).
EPF registration offers various benefits, both for employers and employees:
Regulatory Compliance: Ensures that the employer is compliant with labor laws and tax deductions (TDS).
Employee Financial Security: Provides long-term savings and emergency financial relief.
Portability: EPF accounts are transferable between employers.
Retirement Pension: Employees are automatically enrolled in EPS, securing post-retirement income.
Use for Life Goals: EPF funds can be used for education, weddings, or emergencies.
Employee State Insurance (ESI) registration is another key requirement for Indian employers. Administered by the Employee State Insurance Corporation (ESIC) under the ESI Act of 1948, this scheme offers social security and health insurance to employees earning below a certain wage threshold.
Applicability of the ESI Act
The ESI Act applies to the following:
Entities with 10 or more employees earning less than ₹21,000 per month (₹25,000 for persons with disabilities).
For certain states and businesses, the employee threshold may be 20.
Includes retail shops, hotels, cinema halls, transportation services, healthcare facilities, education institutions, and NBFCs.
Mandatory Registration for the Following Establishments:
Under Section 1(5) of the ESI Act, the following establishments must register if they meet the employee count and salary thresholds:
Restaurants, hotels, cinemas (including previews)
Retail stores and commercial shops
Transportation businesses
Private hospitals, schools, and colleges
Insurance companies, NBFCs, port trusts, and warehousing units
All employees drawing wages up to ₹21,000 (₹25,000 for PwDs) per month are eligible. ESI benefits cover them and their dependents.
Sickness Benefits: 70% of wages for up to 91 days.
Extended Sickness Benefit: 80% of wages for two years for major diseases.
Enhanced Sickness Benefit: 100% wage replacement for sterilization procedures.
Medical Care: Full medical care for employees and families.
Maternity Benefits: Full wages for 26 weeks (extendable to 1 month).
Dependent’s Benefit: 90% of wages to dependents if death occurs due to job injury.
Temporary/Permanent Disablement: 90% of wages during disability period or lifelong, depending on severity.
Retired Medical Benefit: Retired employees and their spouses can continue receiving care with a nominal premium.
Funeral Expenses: ₹15,000 offered for last rites.
These social security benefits make ESI registration a vital responsibility for employers.
To complete EPFO registration, the following documents are needed:
Business Proof: Certificate of Incorporation, GST registration, partnership deed, etc.
Identity Proof: PAN card of business and owners/directors.
Address Proof: Utility bills, rent agreement, or property tax receipt.
Bank Information: Cancelled cheque and bank statement.
Digital Signature: DSC of the authorized signatory.
Employee Details: List of employees with PAN, Aadhaar, and joining dates.
Salary Structure: Monthly breakdown for each employee.
Consent Letters: Signed employee declarations for PF deductions.
Ownership Structure: MOA, AOA, or Form 5A.
Commencement Proof: Initial invoices, contracts, or GST returns.
The ESI registration process is online, requiring digital uploads of the following:
Business Registration Documents: GST registration, incorporation certificate, Factory/Shop Act certificate.
MOA & AOA (if applicable).
Establishment Address Proof: Utility bill or rent/property documents.
Employee Information: Detailed list with personal and salary details.
PAN: Of the entity and employees.
Banking Info: Cancelled company cheque.
Leadership Details: Names of directors and shareholders.
Attendance Records.
Once registered, businesses must ensure ongoing compliance through:
Monthly ESI Returns: To be filed within the first 15 days of the following month.
EPF Returns: Regular filing to ensure statutory compliance.
Registers: Maintain an attendance register, wage register, inspection book, and accident register.
Payment of Contributions: Employers must ensure timely remittance of ESI and EPF contributions via the online portals.
EPF Registration:
Employers can apply on the official EPFO website. Once verified, an EPF code is issued to the establishment, enabling the employer to manage monthly contributions and file returns.
ESI Registration:
The ESIC registration process is fully online via the ESIC portal. After submission and document verification, the business receives a unique employer code used for future filings.
India Company Setup provides full support for both processes, ensuring accurate form submission, document preparation, and portal navigation.
India Company Setup streamlines your PF and ESI registration process through:
Expert Consultants: Our team of compliance experts and legal professionals assist you at every step.
End-to-End Support: From documentation and application to post-registration filing and compliance.
Transparent Services: We ensure you stay informed throughout the process with regular updates.
Affordable Pricing: Competitive and clear pricing with no hidden costs.
Customer-First Approach: Our client support team is always ready to assist with questions, clarifications, or follow-ups.
At India Company Setup, we deliver a complete suite of business services to help you start, grow, and manage your company with ease. From registration to regulatory compliance, our expert support ensures your business stays legally sound and financially organized.
Our expert bookkeeping ensures every transaction is correctly recorded, reducing compliance errors and giving you a clear picture of your company’s financial health — crucial for GST, Income Tax, and MCA filings.
Focus on growing your business while we manage your books. By outsourcing to us, you eliminate the burden of paperwork, reconciliations, and regulatory upkeep — saving you both time and effort.
We help you monitor income and expenses in real time, so you maintain a healthy cash position, make informed decisions, and avoid last-minute cash crunches or missed tax deadlines.
PF (Provident Fund) and ESI (Employees' State Insurance) are social security schemes regulated by the EPFO and ESIC, respectively. Registration is mandatory for eligible employers to provide retirement savings (PF) and medical benefits (ESI) to their employees. These ensure financial and health security for the workforce.
PF Registration is mandatory for establishments employing 20 or more employees.
ESI Registration is mandatory for establishments employing 10 or more employees (in some states, 20) and where employee salaries are ₹21,000/month or less.
Commonly required documents include:
PAN card of the company
Certificate of Incorporation or partnership deed
Address proof of the business (utility bills, rent agreement)
ID & address proof of directors/partners/proprietor
Bank account details
Employee details (name, salary, joining date)
PF and ESI registration can typically be completed within 7 to 10 working days, provided all documents are correctly submitted and verified.
Failure to register or comply with PF and ESI laws may result in penalties, interest on delayed payments, and even prosecution. Timely registration ensures legal compliance and builds trust with employees.
Get clear answers to frequently asked questions about proprietorship setup, benefits, legal formalities, and compliance—so you can start your business in India with clarity and confidence.
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At India Company Setup, we simplify the process of starting your proprietorship. Our expert team ensures hassle-free registration, timely support, and personalized guidance to help you launch with confidence.
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