ESI compliances by companies registered through MCA in case of non applicability of ESI

Under new process of registration of Companies on MCA portal, companies are also getting registered under ESI and PF irrespective of the applicability such laws. This has been causing problem both for the companies not covered under ESI to do the compliances and the department to identify the actual defaulting entities.

In order to solve this problem, Department of Employees State Insurance has issued communication No. P – lL / 14 / t9 lMisc/02i2022-Rev. II dated 2nd November, 2022 to provide opportunity to companies having default registration on MCA to change their status to dormat company for ESI compliances.

Guidance issued by the Competent Authority is as under:-

• MCA registered companies under ESI for starting the compliance of various provisions of ESI Act from the date of reaching the threshold limit of employees i.e. 10 or more employees.
• In case, the companies registered through MCA portal are found not coverable as per the Statutory Provisions of the ESI Act, then they can login on ESI website to change the status to “Dormat” mode.
• Such companies need not make compliance for next 6 months or till they reach the threshold of ESIC coverage, whichever is earlier.
• If the company does not reach the threshold in six months, it has to login on the ESIC website to further extend the ‘dormant mode.
• In case, it does not extend the same, the registration will automatically activate and company has to start compliance under ESIC Act (copy of the note attached for ready reference).
• If it is not followed by the respective employers, necessary actions under the existing provisions of ESI Act may be taken against the defaulting companies.

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