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GUNAPALAN (properiter)     25 September 2013

Applicability of epf/pf

A restaurant was started in the year 1977 as a properitery business. A similar restaurant was started in the year 1985 at another place as a partnership venture between the properiter of the earlier firm and his wife. After 27 years the partnership was firm was shifted to the first floor of the properitery firm in 2013.Both the firms have seperate PAN no.,TIN no., Corporation License,Labour License, Food safety license, bank accounts,EB meters,and have been filing their retuns seperately. The properitery firm employs 12 persons and the partnership firm employs 9 persons and all of them receive more than 6500/-(basic plus dearness allowance) per month. Recently, the EPFO Enforcement Officer visited the premise and advised that the geographical proximity of both the firms will be taken into account and as there are more than 20 employees in both the firms put together, we should get registered under EPFO mentioning the geographical proximity.

1.Is his advice correct?

2.If we register one firm as advised, how do we file returns for both the firms and segregate the accounts?

3.He uses the words geographical proximity and financial proximity. What do they mean under EPFO Act/

Please, help us with clarification.





 7 Replies

Vishal (Asstt. Manager)     26 September 2013

in your case they  (PF authorites) can not force you to get registered under EPF.

1 Like

Sudhir Kumar, Advocate (Advocate)     26 September 2013

you can be forced as the establishments are liable to be clubbed.

GUNAPALAN (properiter)     26 September 2013

Thanks. But, i am confused. Can a proprietery  and a partnership firm can be clubbed only for epf and if, so how do we segregate the accounts? Because of geographical proximity can the two different identities  clubbed as one? Your clarification will be highly valued.

Sudhir Kumar, Advocate (Advocate)     28 September 2013


GUNAPALAN (properiter)     28 September 2013

Dear Mr. Sudhir Kumar,

Thanks. But, pl. clarify under which section  the two firms can be clubbed when they have different pan, tin, eb meters, service tax no.s, labour  license,etc.  Is it that clubbing will be done by threat or do they have valid legal provision to do that? I need clarity because i have been receiving contrary advices. 

Sudhir Kumar, Advocate (Advocate)     29 September 2013

instead of finding grounds to avoid PF why do not you think positive. Deposit PF. Your employees will become pensionable. They will feel pride in being your employees.

Sudhir Kumar, Advocate (Advocate)     29 September 2013

a few years back there was a judgment of Delhi High court wherein court passed strictures against EPFO officials and recommended disciplinary action who failed to enforce clubbing of establishments run  under different  names in same premises same business and proprietorship rotating amongst relatives


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