If a Sole Proprietor have more than one firm and each firm employs 18 employees, do he need to start EPF and ESI ?
Thanks in advance,
I am not sure about ESI rules, but if employee strength is 20 or more than that, then the company will comes under EPF Act. However, if the strength is less than 20, and if employer willing to provide this facility to employees, then they can opt this facility.
Thanks Basunivesh for answering. Actually in this case both of his businesses are proprietary firms not companies, but strength in each firm is less than 20. Is it fine if he do not start EPF in current scenario ? He is confused because some people says that in proprietary business every financial activity is tied to the proprietor and both of his firms can be considered as single entity by the EPF department.
I highly appreciate your answer. I have Googled it a lot and didn’t find anything similar. It may also be helpful to lots of other people in similar situation.
Whether it is company or proprietary, rules are same. However, if the single proprietary handling more than 20 employees ( in different businesses), then he must start EPF.
I am really thankful to you and I highly appreciate your time, but I am still confused by a bit after reading your reply.
Let’s discuss the situation practically: A person named Suraj is running two Information Technology proprietary firms named “DigSoft” and “JetInfoTech”. “DigSoft” has developed an inventory management software for chemist shops and sell its licenses globally and have strength of 17 developers. “JetInfoTech” do freelancing Website Development work for global clients and have strength of 18 employees.
Suraj have two current accounts, one for each of his firm, he get remittance and disperse salaries from respective bank account of a firm. Both firms have separate business verticals but are running from a same building.
Now based on practical situation please suggest if both will be considered as separate firms or not ?
That is what I pointed, ownership is same. Hence, if employee strength is more than 20, then the organization (s) will come under EPF rules.