Provident Fund Registration

Employees Provident Fund implemented by the Employees Provident Fund Organization (EPFO), being one of the main medium for savings for working class people whether in Government, Private or Public sector organizations.

Firms or Companies having employee capacity of not less than 20 are required to be registered with the Provident Fund Department. The strength of 20 also includes contract based employees like security, housekeeping or other contractual workers required for the business entity. Companies not having the mentioned capacity of employees but are willing to register owing to the benefits of Provident Fund for their employees can register voluntarily with the Regional Provident Fund Office. Registration has to be done within thirty days from the date of hiring 20 employees. Delay might result into a penalty.

The schemes framed by Employees Provident Fund Organization (EPFO) provide for three types of benefits – 
    1. Contributory Provident Fund.
    2. Pensioner benefits to the employees and their family members.
    3. Provides insurance cover to the members of the Fund.

It serves as a social security benefit to the employees. During an employee’s productive lifecycle; along with his employer, an employee contributes monthly to the PF Fund which then serves on retirement.

ELIGIBILITY

An employee at the time of joining the employment, receiving salary up to Rs. 6,500 is required to become a member. According to this act, salary means and includes BASIC SALARY + DEARNESS ALLOWANCES (DA), value of food concessions (cash) and retaining allowances (if any). He is thus, eligible for the membership of PF from the very first date of joining a business establishment.

EMPLOYEE CONTRIBUTION

Provident fund (PF) contribution is recovered @ 12% of salary or wages from employees who do not earn less than a wage of Rs.15,000 p.m. However, employees can contribute more than this statutory maximum limit which is then, considered as a voluntary contribution.

VOLUNTARY CONTRIBUTION

An employee can voluntarily contribute above the stipulated rate of Provident Fund contribution by opting for the voluntary scheme at any rate so desired, also up to 100% of Wages.

The contribution to VPF should not be a fixed amount, but should be a certain % of wages. However, the employer is not legally bound to contribute at the enhanced (increased) rate.

EMPLOYER CONTRIBUTION

Employer is required to contribute towards the provident fund; the deduction rate for the employer is the same as employee’s contribution (12% of the wages).
Out of this 12%, 3.67% goes to the Provident Fund and the balance of 12% that is; 8.33% to the Pension Fund.
The employer must deposit the contribution recovered from employees to the provident fund account on or before 15th of the following month.

DOCUMENTS REQUIRED

1. Certificate of Incorporation (private limited company) and Certificate of Registration of the Firm (partnership Firm).
2. MOA & AOA (private limited company) and Partnership Deed (partnership firm).
3. Rental Agreement or Lease Agreement.
4. PAN Card of Company or Firm.
5. Address Proof.
6. ID Proof – Pan Card/Election Card/Passport/Driving License (Directors/ Partners).
7. List of Directors/Partners.
8. Registration copies with other Departments-VAT, PT; etc.
9. First Invoice raised by the company.
10. True copy of Board resolution.

Once documents are filed the authorities will verify all the original documents and carry out a physical inspection on the premises of the company. The business entity will be then granted with a PF allotment letter.

PROCEDURE FOR PROVIDENT FUND REGISTRATION

The forms to be filed for registering an establishment are below;

One detailed application termed as “PERFORMA FOR COVERAGE”.
Form 5 A having Annexure I.