Section:3 :Determination Of Establishments Covered
Obligation : To determine the list of Separate Establishments for the purpose of computation of Bonus
Type:Preventive Compliance
Frequency: Annual
Action to be taken:
Obtain legal opinion on separation of establishment for the purpose of bonus if separate balance sheets and P&L Accounts are maintained for any department, undertaking or branch
Audit Requirement: If separate accounts are maintained for a department, undertaking or branch, is a legal opinion available on treating it as a separate establishment for computation of Bonus ?
Supporting Documents: Legal Opinion on Separation of Establishment
Related Sections:
Payment of Bonus Act, 1965 3:Establishments to include departments, undertakings and branches:
Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act :
Provided that where for any accounting year a separate balance-sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then, such department or undertaking or branches shall be treated as a separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was, immediately before the commencement of that accounting year treated as part of establishment for the purpose of computation of bonus.
Payment of Bonus Act, 1965 
